Stricter Penalties Proposed against Misleading Trademark Use under New Trademark Law Draft

The second draft of the revised Trademark Law was submitted to the Standing Committee of the National People’s Congress for deliberation recently. The draft targets so-called “deceptive trademarks”, which are worded or designed to mislead consumers about product ingredients, production techniques and quality conditions. Many merchants register marks such as “zero-addition” and “naturally ripe” and use them as factual descriptions to confuse buyers, which has long disturbed market order.

The draft significantly raises administrative penalties. If a registered trademark is used in a misleading manner, violators will first be ordered to make corrections. Where the illegal business volume exceeds 50,000 yuan, fines up to five times the illegal turnover may be imposed. For smaller operations without substantial illegal gains, the maximum fine can reach 250,000 yuan. Regulators will also tighten oversight over trademark agencies to block malicious registration services.

This legislative upgrade shifts China’s trademark governance from mere registration review to strict post-registration supervision. It creates clearer compliance rules for domestic and foreign brand owners. Companies should carefully audit their existing trademarks and packaging statements to avoid being penalized for deceptive use. The stricter rules will effectively combat free-riding and safeguard fair competition in consumer goods markets.