Trademark squatting is the registration of someone else’s brand in a country where the real owner has not yet filed, usually to block its entry or to sell the mark back. Because registration is territorial and most offices are first-to-file, a squatter in Mexico, Brazil, Cuba or China can stop a European or Latin American brand at the border even when the brand is well known at home. The remedies exist, but they differ by country and most of them have deadlines.
Key takeaways
- The best defence is still to file first in every market where you sell, manufacture or negotiate with distributors.
- Spain, Mexico and Cuba allow a bad-faith registration to be cancelled at any time; the Andean Community and Brazil set five-year limits for most actions.
- China’s amended Trademark Law, in force on 1 January 2027, lets anyone oppose filings made without intent to use and allows fines of up to 100,000 yuan.
- In a WIPO survey, 44.9% of responding users said they had been affected by bad-faith filings at national or regional level, and most of them had challenged those filings successfully.
- The Madrid System has no bad-faith procedure of its own; the issue is handled office by office and through “central attack”.
What is trademark squatting and why does it work?
A squatter files your mark, or a close variant, in a territory where you have no registration. Typical squatters are former distributors, agents, local manufacturers or opportunistic filers who monitor foreign brands. The tactic works for three reasons:
- Territoriality: a registration in Spain or at the EUIPO (the European Union Intellectual Property Office) has no effect in Mexico, Brazil or China.
- First-to-file: in most systems, the earlier application wins unless the owner proves bad faith, a well-known mark or a prior relationship.
- Cost asymmetry: filing costs the squatter little, while cancelling the registration costs the owner time, evidence and legal fees.
The WIPO survey on bad faith in the Madrid System (document MM/LD/WG/23/5, 18 July 2025) collected answers from 38 offices and 216 users. Of those users, 97 (44.9%) reported being affected by bad-faith filings outside Madrid. The offices they named most often were China (45 mentions), Türkiye (7), the European Union (7) and Brazil (5). The same survey shows the other side: 82 affected users had successfully challenged such filings, most often in China (38). Bad-faith filings are a known risk, and in many offices they can be challenged successfully.
How do bad-faith remedies compare across the EU, Latin America and China?
Each office uses different tools: refusal at examination, opposition, invalidation, a claim to transfer the mark or administrative fines. The table summarises the main provisions we work with in the triangle.
| Jurisdiction | Main tool against bad faith | Time limit | Agent or distributor filings |
|---|---|---|---|
| European Union (EUIPO) | Invalidity for bad faith, art. 59(1)(b) EUTMR; bad faith is not an opposition ground | Opposition (relative grounds only) within 3 months of publication | Opposition under art. 8(3) and assignment claim under art. 21 |
| Spain (OEPM) | Absolute nullity, art. 51.1(b) Ley 17/2001 | No limitation (art. 51.2) | Art. 10; ownership claim (acción reivindicatoria) within 5 years, art. 2.2 |
| Mexico (IMPI) | Bad-faith filings are unregistrable, art. 173(XXII) LFPPI; nullity, art. 258(VI) | Nullity for bad faith at any time | Nullity at any time, art. 258(V) |
| Andean Community (Colombia, Peru, Ecuador, Bolivia) | Refusal where unfair competition is suspected, art. 137; relative nullity for bad faith, art. 172 Decision 486 | Opposition within 30 days; nullity within 5 years of grant | Refusal, art. 136(d) |
| Brazil (INPI) | Refusal of marks the applicant “could not ignore”, art. 124(XXIII) Law 9,279 | Opposition 60 days; administrative nullity 180 days from grant; court nullity 5 years | Court action for adjudication of the registration, art. 166 |
| Cuba (OCPI) | Absolute nullity for bad faith, art. 66(c) Decree-Law 103/2025 | At any time; opposition within 60 days | Relative prohibition, art. 17.1(i) |
| China (CNIPA), from 1 Jan 2027 | Filings without intent to use or by improper means barred, art. 19; fines, art. 54 | Opposition within 2 months, open to anyone on art. 19 grounds | Refusal on the principal’s opposition, art. 22 |
Points that change the strategy
- Brazil: an opposition or nullity based on art. 124(XXIII) or on a well-known mark is not heard unless the owner files its own application within 60 days (art. 158 §2 of Law 9,279/1996).
- Andean Community: the ownership claim under art. 237 of Decision 486 allows the owner to be recognised as co-applicant or co-owner, and the claim does not lapse if the registrant acted in bad faith.
- Mexico: the reform published on 3 April 2026 defines bad faith as filing to obtain an undue benefit to the detriment of the legitimate owner (LFPPI, consolidated text).
- Cuba: the new law, published in the Gaceta Oficial of 9 June 2026, took effect 60 days later. Companies with a US nexus should check the sanctions position with an adviser before acting in Cuba.
- China: the amended law published by the CNIPA on 26 June 2026 also allows invalidation of registrations obtained in breach of art. 19 (art. 50). It shortens the opposition window from three months to two, so watch services need to report more quickly.
What does the Madrid System do about bad faith?
The Madrid Protocol does not examine bad faith centrally. Each designated office applies its own law. The EU reported 334 provisional refusals based on bad faith in the survey period, while Spain and Colombia noted that bad faith is not a ground for provisional refusal in their systems.
The tool that Madrid does offer is central attack: during the five-year dependency period, if the basic mark falls, the international registration falls with it. The WIPO survey found it is rarely used for bad faith specifically: only 17 users (7.9%) had cancelled an international registration that way. At the Madrid Union Assembly in July 2026, delegations agreed to continue discussing dependency and the possible evolution of the system at the next Working Group session (MM/A/60/3 Prov., 14 August 2026). In practice, a squatter’s national filing still has to be fought in the national office.
What this means for your business
- Map exposure: list every country where you sell, manufacture, source components or are negotiating with distributors. Countries where you manufacture often matter as much as sales markets.
- File before you talk: apply before sharing samples, catalogues or price lists with local partners. Include local-script or transliterated versions where consumers will use them.
- Fix it in the contract: distribution and manufacturing agreements should state who owns the marks, prohibit local filings and require assignment of any filing made in breach.
- Watch the gazettes: opposition windows run from 30 days in the Andean Community to three months at the EUIPO. A watch service only helps if alerts arrive in time.
- Keep an evidence file: first use, launch dates, correspondence with partners and press coverage. Bad faith is proved with documents, not assertions.
If you need these filings and watch alerts run across several offices, our international trademark registration and watch team can align them with a single calendar.
Where companies get trademark squatting wrong
- Assuming reputation at home is enough: a well-known-mark argument requires proof of reputation in the country concerned, which a new entrant rarely has.
- Missing the short windows: 30 days in the Andean Community and 60 days in Brazil and Cuba pass quickly if nobody is watching.
- Forgetting the Brazilian filing requirement: an opposition based on art. 124(XXIII) is not heard without your own application on file.
- Negotiating to buy the mark back without a strategy: payment may encourage new filings. Compare the cost with invalidation or a transfer claim first.
- Letting the distributor file “to help”: a mark registered in a partner’s name is the hardest kind to recover.
When different advisers handle each country, deadlines and evidence get lost between them. A single coordinated team keeps one evidence file and one calendar for every office. Where a dispute escalates, our IP disputes and enforcement team takes it forward.
Frequently asked questions
Can I cancel a trademark registered in bad faith by my former distributor?
Usually yes, but the route depends on the country. Spain, Mexico and Cuba allow nullity for bad faith at any time. The EU and Spain also have specific rules for agents and representatives. In Brazil and the Andean Community, time limits apply to most actions, so act as soon as you learn of the filing.
What changes in China on 1 January 2027?
The amended Trademark Law bars filings made without intent to use or by deception, lets any person oppose them within two months of publication and allows warnings and fines of up to 100,000 yuan. Registrations made before 2027 remain valid, so existing squatted marks still need to be challenged.
Does the Madrid System protect me against squatters?
Only indirectly. A Madrid designation gives you an early filing date in the countries you designate, which prevents later squatting there. It does not cancel filings made by others. Central attack works only against international registrations whose basic mark falls within five years.
Can IP Global Guard handle a bad-faith case in several countries?
Yes. We map your filings, prepare oppositions and invalidity actions before the EUIPO and the OEPM directly when our professionals are qualified and otherwise through qualified representatives, and coordinate local correspondents in Latin America, Africa and China from a single point of contact.
How IP Global Guard protects your brand against squatters
IP Global Guard, the intellectual property line of META Channel Corporation Limited, manages trademark portfolios across more than 25 jurisdictions in Europe, Latin America and Africa with one strategy and one billing relationship. For China and other markets outside the corridor, we extend protection through the Madrid System and qualified local agents whom we coordinate.
Tell us where you sell, manufacture and negotiate, and send us any filing you suspect is a squat. We will check the registers, set the deadlines and recommend whether to oppose, seek invalidation or claim the mark back. Contact our team with your list of markets.
This article is general information, not legal advice, and reflects the law as of its publication date.
Sources
- WIPO, MM/LD/WG/23/5, Findings of the survey on the incidence of bad faith in the Madrid System (18 July 2025)
- WIPO, MM/LD/WG/23/6, Report on intersessional consultations on dependency (7 August 2025)
- WIPO, Madrid Union Assembly, MM/A/60/3 Prov., draft report (14 August 2026)
- WIPO Lex, Regulation (EU) 2017/1001 on the European Union trade mark (14 June 2017)
- BOE, Ley 17/2001 de Marcas, consolidated text
- Mexican Chamber of Deputies, LFPPI, consolidated text (last amended 3 April 2026)
- Andean Community, Decision 486 (in force since 1 December 2000)
- Planalto, Law 9,279 of 14 May 1996 (Brazil)
- Gaceta Oficial de Cuba No. 50, Decree-Law 103/2025 (9 June 2026)
- CNIPA, Trademark Law of the PRC as amended (26 June 2026)
