By Seven Liu
In recent years, China has significantly strengthened its supervision of trademark agencies, particularly in response to practices designed to circumvent statutory restrictions. A recent invalidation decision involving the “YUNNIAN” trademark illustrates how regulators are addressing attempts by agencies to register trademarks through affiliated entities.
The Legal Background: Clear Limits on Agencies’ own Filings
Under Article 19(4) of China’s Trademark Law, trademark agencies are prohibited from applying for trademarks for themselves, except where such marks relate directly to their agency services. The purpose of this rule is to prevent agencies from abusing their professional knowledge and procedural advantages for speculative or improper registration activities.
To reinforce this principle, the Trademark Agency Supervision Regulations, effective from December 2022, further prohibit agencies from registering trademarks indirectly through shareholders, executives, employees, affiliated companies, or newly established entities. These rules reflect regulators’ intent to eliminate “shadow applicants” and disguised registrations.
The YUNNIAN Case: Holding Trademarks through an “Affiliated Company”
In the YUNNIAN case, the disputed trademark was nominally applied for and registered by a technology company. However, this company was highly affiliated with a registered trademark agency: both entities shared the same legal representative, and many of the applicant’s trademarks were filed through this agency.
Meanwhile, regulatory authorities found that the applicant had, over a long period of time, filed a large number of trademarks similar to well-known brands, such as “喜力熊HEINEKEN BEAR and Device,” “ULYSSE NARDIN,” and “CHRISTIAN LOUBOUTIN,” which were identical or highly similar to others’ brands. Some of these trademarks had already been challenged through invalidation proceedings.
In addition, multiple trademarks under the applicant’s name were publicly offered for sale on online trading platforms and transferred to various different entities.
Regulatory Findings: Circumvention will not be Tolerated
The trademark authorities concluded that the applicant and the agency had acted in concert to bypass legal restrictions. Although the trademark was formally filed under a different company name, the economic and managerial links between the two entities demonstrated coordinated behavior.
As a result, the registration was found to violate Article 19(4) of the Trademark Law. More importantly, the authorities held that the conduct also constituted registration by “other improper means” under Article 44(1), due to its disruptive impact on market order and fair competition.
The trademark was therefore declared invalid.
Key Message: Substance Over Form
This case highlights a central principle in China’s current trademark enforcement policy: regulators will focus on the real relationship and intent behind an application, rather than its formal structure.
Using related companies, shareholders, or employees as nominal applicants will not shield agencies from liability if the underlying purpose is to evade statutory restrictions. When coordinated behavior and bad-faith intent can be established, the registration may be invalidated regardless of how it is formally presented.
Implications for Trademark Agencies
For trademark agencies, this decision reinforces several compliance obligations:
Agencies must not engage in trademark speculation, directly or indirectly.
Internal controls should prevent staff, shareholders, or affiliates from acting as proxy applicants.
Filing strategies must be grounded in genuine commercial intent.
Failure to observe these principles may result not only in invalidation, but also administrative penalties and reputational damage.
Implications for Brand Owners
For brand owners, especially foreign companies operating in China, this case offers reassurance that regulatory authorities are increasingly proactive in addressing bad-faith registrations.
At the same time, it highlights the importance of conducting due diligence when selecting trademark agents. Working with non-compliant agencies can expose clients to legal risks and undermine portfolio stability.
A Broader Trend: Strengthening Market Integrity
The YUNNIAN decision reflects a broader shift in China’s trademark system from a volume-driven registration environment toward one focused on integrity, transparency, and fair competition.
By closing loopholes involving affiliated entities and proxy filings, regulators are sending a clear signal: professional intermediaries are expected to uphold higher ethical and legal standards.
Conclusion
This case demonstrates that attempts to disguise agency-controlled trademark filings through related companies are no longer viable in China’s regulatory environment. Authorities are increasingly willing to “look through” corporate structures and focus on actual control and intent.
For agencies, compliance is no longer optional. For brand owners, early protection and careful partner selection remain essential, along with regular monitoring of their trademarks to promptly detect any unfair copying of their brand by others. In an increasingly mature trademark system, credibility and good faith are becoming as important as registration itself.