CHANG TSI
Insights
The start of 2026 has brought many noteworthy IP developments in China. These changes are part of a broader evolution in China’s approach toward a more transparent, credible, and sophisticated legal environment, and will directly impact the way IP portfolios are managed, disputes are resolved, and compliance strategies are executed in China. We see these changes not merely as isolated news items, but as part of a broader effort to improve trust in the rule of law and raise the sophistication of China’s legal framework in areas where innovation, commerce, and dispute resolution intersect.
Notably, the Draft Amendment to China's Trademark Law has entered the NPC's substantive legislative stage. The draft emphasizes “genuine use" for trademark registration, recognizes dynamic marks, shortens the opposition period, strengthens protection for well‑known marks, and clarifies the liability for malicious litigation. This reflects lawmakers’ focus on practical implementation, limiting speculative filings and ensuring stability in judicial practice.
The Chang Tsi Strategic Research Institute has published articles offering analysis of the revision priorities and core changes.
In parallel, the Shanghai High Court issued typical cases on trademark prosecution and enforcement, addressing challenges such as malicious litigation, punitive damages, “pre-sale” confusion, and clarifying the boundary of descriptive fair use. These cases, combined with the legislative reforms, signal a more robust framework for both prosecution and enforcement.
Beyond trademarks, patent movements also shape the new landscape. The Supreme Court issued the Draft Interpretation of Disputes over Infringement of Patent Rights (III) for public comments, aiming to unify adjudication standards and improve procedural efficiency. It directly targets abusive tactics, strengthens the coordination between judicial and administrative procedures, and narrows the interpretation of “place of sale” to prevent forum shopping. The draft also enumerates scenarios that constitute malicious litigation, providing a concrete basis for courts to curb rights abuse. This draft draws on years of judicial experience within the IP Court of the Supreme Court and signals a stronger resolve to balance enforcement with the need to deter obstructionist conduct.
At the administrative level, the revised Patent Examination Guidelines came into effect on 1 January 2026, with a clear emphasis on emerging technologies and the practical optimization of examination procedures. Notably, the Guidelines introduce a dedicated chapter on AI and big data inventions, acknowledging their unique technical characteristics and initiating the incorporation of ethical considerations into the examination framework. This development indicates that patent examination in China will increasingly take into account the broader societal context in which innovation occurs.
Competition regulation is also undergoing significant developments. Shanghai’s newly issued 2026 Action Plan introduces heightened reviews targeting monopolistic practices and so‑called “rat race” competition that erodes productivity and market health. At the national level, the Conference of Presidents of High Courts has reported a marked increase in civil cases involving misappropriation of trade secrets and collusive bidding, calling for more robust judicial strategies to curb market‑distorting conduct. This alignment between local administrative oversight and judicial policy signals that competitive tactics—regardless of their legal ingenuity—will face greater scrutiny when they threaten market order.
Data security also remains a priority. The Shanghai Cyberspace Administration’s Annual Enforcement Report lists cases involving failures to safeguard data, unlawful cross-border transfers, and personal information rights violations across industries from logistics and IoT to hospitality and retail. Similar disclosures from other regions show that data governance and security are now embedded priorities in China’s regulatory landscape.
In a landmark software copyright case, the Supreme Court increased punitive damages from RMB 15 million (USD 2.1 million) to over RMB 55 million (USD 7.9 million) on appeal, citing deliberate infringement, concealment, and evidentiary hardship as grounds for applying a higher multiplier1.
In a trademark case, the Supreme Court emphasized that, to defend against a non-use cancellation, the registrant must show genuine and public use in commerce—token or purely symbolic use will not suffice2.
In another significant decision, the Beijing IP Court held that product similarity should be assessed based on actual market perception, rather than limited by registration classifications, and imposed joint liability on a producer who failed to verify the legitimacy of a commissioned product3.
China's first AIGC commercial defamation case concluded that publishers using AI also bear verification obligations. The court rejects the “tool exemption” argument and reinforces that that responsibility follows publication and benefit4.
The first "AI hallucination" infringement case found that misleading outputs and AI-made promises cannot be treated as binding statements by service providers.
The Hangzhou Intermediate Court made the first copyright and unfair competition case involving an AI app’s targeted content generation, holding that exploiting another platform’s market results may constitute unfair competition5.
Another notable development was ByteDance and ZTE's launch of the "Doubao AI Phone", which triggered debate over privacy, system access, and potential unfair competition risks.
Taken as a whole, the developments of January 2026 signal a maturing legal ecosystem in China—one where credibility, consistent enforcement, and market integrity converge. Legislative reforms, judicial precedents, and regulatory measures now operate as an integrated framework that discourages opportunistic conduct and rewards lawful, substantive engagement. China's legal environment is moving decisively toward a regime rooted in credibility, stability, and responsiveness.
Across trademarks, patents, and competition law, as well as in data governance, the message is consistent: long‑term success in China will increasingly rely on proactive adaptation—aligning IP use with genuine commercial activity, building resilient competitive strategies, and embedding robust data governance into business operations.
If you are interested in exploring these developments in greater detail, we invite you to reach out to us for further discussion.
