Trademark Squatters Are Coming for Your Supply Chain in Swarms Now
For years, trademark squatters followed the same general script. They would identify a foreign brand that had not yet registered its trademark in China, the United States, or another key market. Then they would file first and wait. Eventually, the legitimate brand owner would discover the problem, usually when it tried to register the mark, manufacture products, enter the market, stop counterfeiters, or enforce its rights. At that point, the squatter would demand payment.
It was annoying and expensive, but usually manageable. That manageable annoyance is now giving way to something more corrosive: a generation of squatters who are not waiting for a payday, but actively creating one.
Bad-faith trademark filings are applications made not to protect a genuine commercial interest, but to gain leverage over the legitimate brand owner. They have been part of trademark practice for decades. What is different now is how aggressively they are being used. Today’s trademark squatters are not merely trying to own registrations. They are looking for pressure points: supply chains, China Customs recordals, online marketplaces, licensing narratives, and trademark office procedures.
Sometimes the goal is not to win. It is to make the fight expensive enough that the brand owner will pay to end it. The squatter does not need a strong legal position to profit. It needs a vulnerable pressure point and a brand owner who waited too long.
If you have not registered your trademark yet, do it now. I can guarantee you that will cost considerably less than the fight you may face if you don’t.
China Remains the Most Dangerous Trademark Squatting Jurisdiction
China is a first-to-file trademark jurisdiction. This means that if someone registers your trademark in China before you do, you can face serious problems even if you created the brand, used the brand elsewhere, and built the brand’s reputation outside China.
For years, the classic China trademark squatter would register a foreign company’s mark and wait for a payday. The squatter might contact the brand owner directly, or it might wait for the brand owner to discover the registration on its own. The dispute would then usually become a question of whether to oppose, cancel, invalidate, negotiate, rebrand, or pay.
That is still true, but the current generation of squatters is doing something worse. They have stopped waiting. They are interfering with shipments, creating platform problems, manufacturing false records of legitimacy, and forcing brand owners to fight on the squatter’s terms.
China Customs Recordals Are Becoming a Trademark Squatting Weapon
One of the most troubling tactics involves China Customs. China Customs trademark recordal is a registration process through which a trademark owner puts its mark on file with China Customs, enabling Customs officers to flag shipments bearing the mark and notify the rights holder when suspect goods are identified. When used by the legitimate trademark owner, recordal can be a powerful anti-counterfeiting tool. It can help stop counterfeit goods from entering or leaving China. See Safeguarding Your Intellectual Property in China: A Guide to China Customs IP Recordation.
When used by a bad-faith registrant, the same tool can become a powerful weapon. A recorded registrant can submit complaints to China Customs requesting that goods bearing the contested mark be detained for inspection. Even when the matter is ultimately resolved in the legitimate brand owner’s favor, the process can delay shipments, create uncertainty, and force a company into emergency legal work under commercial pressure. Most importantly, it costs the legitimate brand owner substantial time and money.
Once exports can be threatened or delayed, trademark protection bleeds directly into supply chain operations. Companies that manufacture in China need China trademarks even if they do not sell to a single Chinese consumer. This includes companies whose products are made by Chinese contract manufacturers they may not fully control or even fully understand. If the factory is in China and your brand name is on the product, your China trademark exposure is real. See Manufacturing in China: China Trademark Registration Should be the FIRST Thing You Do.
A U.S. trademark registration does not protect you in China. A domain name does not protect you in China. And years of use outside China usually will not save you from a bad China filing. Once the wrong party owns the China trademark registration of “your” brand, the problem can move from annoying to operational very quickly.
Squatters Are Working Harder to Look Legitimate
We are also seeing squatters work harder to legitimize their registrations after the fact. Some try to license the mark to distributors or retailers, creating a record of supposed commercial use. Others create documentation, such as use agreements, invoices, distributor records, and product photographs, designed to support a claim of genuine use before a Trademark Office examiner or court. Some add the legitimate brand owner to the squatter’s own Customs recordal as an “authorized” party, as though the squatter had the right to manage the brand’s import and export rights.
That last move is especially galling because it can make the real brand owner look like a party operating under the squatter’s permission, rather than the other way around. It also creates confusion over who actually controls the mark, which is often the point.
These tactics matter because they can complicate non-use cancellation actions. In China, a trademark can generally be cancelled if it has not been put to genuine use for three consecutive years. Genuine use typically requires evidence of actual commercial transactions, not merely internal paperwork, promotional samples, or token activity. A squatter who can muddy the record with licenses, invoices, or supposed distribution activity may make the fight harder and more expensive.
The squatter’s goal is not always to win cleanly. Often, their goal is to make the factual record messy enoug that the legitimate brand owner chooses to pay them a lot of money rather than pay even more money fighting against the problems the squatter has created.
Be Careful With Settlements and “Licenses”
Some brand owners panic when they discover a squatter and rush into a settlement. Sometimes settlement is the right answer. But informal agreements, poorly drafted licenses, or vague coexistence arrangements often just create new problems.
A badly handled settlement may make the squatter look legitimate, create evidence of consent, complicate future cancellation efforts, undermine platform enforcement, or encourage future bad-faith filings.
If you are dealing with a squatter, do not just ask, “How much will it cost to make this go away?” Ask a lawyer familiar with Chinese trademark law “What will this agreement do to our long-term trademark position?” That question matters because the wrong settlement can make tomorrow’s problem worse.
The Bad Actor Is Not Always a Stranger
Many companies still imagine the trademark squatter as some random person on the other side of the world who found their brand online. Sometimes that is exactly what happened, but not always.
The bad-faith registrant may be a former employee, a distributor, a manufacturing partner, a licensee, a supplier, or a competitor who recognized the gap before the brand owner did. In some cases, the squatter is a former or current manufacturer that had direct access to the brand, the packaging, the product specifications, and the company’s expansion plans.
A company shares its brand assets with a factory, distributor, or potential partner before it has filed for trademark protection. The relationship deteriorates, the other side sees an opportunity, and one day the brand owner discovers that someone it trusted has filed first. “We trust our factory” is not a trademark strategy. You should file your China trademark application before you reveal your brand name to anyone, especially anyone in China.
The United States Is No Longer Immune
Many companies assume trademark squatting is mostly a China problem. That assumption is both outdated and dangerous.
Historically, the United States was not considered fertile ground for classic trademark squatting because U.S. trademark rights are tied heavily to use. The first party to use a mark in commerce generally has stronger rights than a later filer. But “we used it first” is not a complete defense to business disruption.
In U.S. proceedings, a senior user can challenge a junior registrant’s rights, but only if the senior user can document continuous use in commerce. Many small and midsize companies do not keep those records carefully. Even when they do, a bad filing can still create cost, delay, and procedural obstacles.
A weak or fraudulent U.S. trademark application can force the legitimate brand owner to monitor filings, submit a letter of protest, oppose an application, seek cancellation, or respond to office actions. A letter of protest, for example, can be a relatively low-cost way to put evidence of bad faith in front of a USPTO examiner while an application is still being examined. But that only helps if the brand owner is watching closely enough to act in time.
USPTO Swarm Attacks Are a New Bad-Faith Filing Strategy
We are now seeing trademark swarm attacks at the USPTO. A brand owner discovers multiple applications for the same mark, similar marks, misspellings, logo variations, related goods, or adjacent trademark classes. The filings come from different entities. They appear within a short period of time. They may involve applicants with no obvious legitimate connection to the brand.
Frequently, these filings involve foreign applicants, often from China. Proving coordination is difficult, and in many cases, you do not need to prove it. What matters for opposition and cancellation purposes is usually each application on its own merits, not whether you can demonstrate a conspiracy. But from the brand owner’s perspective, the practical effect is unmistakable.
The filings create procedural obstacles that must be addressed one by one, each with its own deadlines, fees, and strategic considerations. Many swarm filings are ultimately refused by the USPTO or abandoned, but the damage is already done. The cost is the monitoring, the response strategy, the opposition work, the distraction, and the business uncertainty.
Last week alone, I took on two new trademark swarming matters involving clusters of suspicious filings against legitimate brand owners that had not registered their marks in the United States. In each matter, five applications were filed on the same day for marks identical or highly similar to the client’s brand, each by a different entity.
A cluster of five same-day filings by five different entities can make the activity look less coordinated than it really is: five separate companies, five separate applications, nothing obviously connected. The practical effect is the same either way: five deadlines, five sets of goods and services to analyze, and five potential procedural problems to address simultaneously.
In both matters, the first thing we did was not panic. We counseled against throwing money at the filers and instructed our clients not to respond to each of the five applications as though it existed in isolation. The first thing we did was map out the attack.
That meant identifying every related filing, every applicant, every variation of the mark, every covered class of goods and services, every filing date, and every potential connection among the applicants. Only after mapping the attack did we start assessing the right mix of USPTO strategy, marketplace strategy, enforcement options, and business risk.
With swarm attacks, the danger lies in the pattern. If you respond to each application in isolation, you may miss the broader strategy and waste money fighting the wrong battle first.
Before responding to any individual filing, you need to understand the full picture: how many filings exist, who filed them, whether the applicants are connected, what goods and services are covered, which filings create the most immediate commercial risk, which deadlines matter, and what the fastest path to neutralizing the threat looks like.
In both of last week’s matters, the filing clusters were not trademark office clutter. They were potential business disruptions. By the time most companies figure this out, they are already fighting on multiple fronts.
Filing early in the United States is becoming nearly as important as filing early in China.
Amazon Makes Trademark Problems More Urgent
For many companies, the most immediate damage from trademark squatting happens on Amazon. Amazon is the most common flashpoint, but the same dynamics can arise on Alibaba, Temu, Walmart Marketplace, eBay, Etsy, and wherever platform enforcement systems rely heavily on trademark data.
A bad-faith applicant may use a trademark filing or registration to interfere with Amazon Brand Registry, challenge legitimate listings, submit takedown complaints, or pressure sellers and distributors. None of it requires winning a formal legal proceeding.
The distinction between a pending application and a registration matters. Amazon Brand Registry generally requires a registered trademark, not merely a pending application, though Amazon’s rules and practices can change and vary by jurisdiction and program. A squatter who reaches registration before the real brand owner does may gain platform enforcement rights the legitimate brand owner does not yet have.
A red flag on Amazon is a Brand Registry complaint or trademark-based claim filed by an entity you do not recognize. That can be the first sign that someone has used a trademark filing to gain platform standing.
For a company whose Amazon channel drives half its revenue, a two-week listing disruption during Q4 can cost more than the entire underlying trademark dispute. Companies need to make sure they have sufficient trademark protection to stay in control of their own brand.
Why This Is Getting Worse
Several things are driving this. Brand owners who have been paying attention know they should register early in key markets, which makes the old passive squatting model less reliable. If sitting on a registration no longer guarantees a payday, squatters need better pressure points, and they have found them in supply chains, online marketplaces, Customs recordals, and USPTO filings.
Online marketplaces have also made trademarks more operationally valuable. Trademarks now determine who can control listings, submit takedown requests, access anti-counterfeiting tools, and get taken seriously by platform enforcement systems.
Global supply chains create additional pressure. If a squatter can threaten exports from China, interfere with Amazon listings in the United States, and create procedural problems at the USPTO, it can pressure the brand owner from several directions at once.
None of this would matter as much if brand owners were filing earlier, but they’re not. The explanations are familiar. Companies say they are only manufacturing in China, not selling there. Or that they will file once their product “gains more traction.” Or that they already own the domain name, and that ought to count for something. Or that they have used the brand for years, so they should be fine. Or that their Amazon listings prove the brand is theirs.
None of it holds up. A domain name is not a trademark registration. A company name is not necessarily a trademark registration. A U.S. trademark does not protect you in China. Use in one country usually does not give you automatic rights in another. Amazon success does not guarantee trademark ownership.
The more successful your brand becomes, the more attractive it is to squatters, and the more gaps in your protection will be exploited. The cost difference is brutal. Fighting a squatter or settling with one typically costs at least ten times as much as registering the trademark in the first place. Sometimes the cost is a failed business.
The question for most brand owners is what to do. The answer starts with filing earlier than feels necessary.
File Early, File Correctly, and Monitor What Happens Next
The starting point is registering your core marks early, before you manufacture, launch, approach distributors, attend trade shows, or build public momentum around a new brand.
In China, that means getting a filing on file before your brand becomes visible anywhere. China trademark applications typically take 12 to 18 months to proceed to registration. Filing early is not just about beating a squatter. It is about having a registration in hand by the time you need to use it.
During the period between filing and registration, you may have some procedural advantages, but your strongest enforcement tools usually depend on having a registration. That is another reason to file before you need protection.
Filing correctly matters as much as filing early. A registered U.S. trademark does not automatically help you in China, and a China registration does not protect you at the USPTO. But a coordinated filing strategy in both jurisdictions can make it much harder for a squatter to create problems on multiple fronts at the same time.
A weak filing strategy can create a false sense of security. China follows the Nice Classification system but further divides each class into subclasses. Protection within a class does not automatically extend across every subclass. A company that files in the right class but the wrong subclass for its actual goods can discover later that a squatter has registered the same mark in an adjacent subclass and obtained rights the company assumed it had.
A clothing company that files only in Class 25 may discover, too late, that someone else has registered its mark in Class 18 for bags and accessories. Whether that creates a serious problem depends on the facts, but the gap is real, and squatters know how to exploit gaps.
The same general principle applies in the United States. Your filing should match your actual and planned commercial use, but it should also account for realistic expansion and enforcement needs. Filing in the wrong classes is almost as bad as not filing at all.
If you own a valid China trademark and your products are manufactured in or move through China, Customs recordal is worth evaluating early. For legitimate brand owners, China Customs recordal can be a useful anti-counterfeiting and supply chain protection tool. It can help prevent counterfeit goods from leaving China and entering other markets.
It also has defensive value. If you do not record your legitimate rights, and a bad-faith registrant records conflicting rights, you may find yourself fighting uphill. Not every company needs Customs recordal. But companies with China manufacturing, high counterfeiting risk, valuable brands, or export-sensitive supply chains should evaluate it early.
Companies should monitor filings in key jurisdictions, including China and the United States. Monitoring services that automatically flag relevant filings are relatively inexpensive and should be standard practice for any brand with meaningful public exposure.
Start with exact matches and Chinese-language versions of your mark. Those are often the filings most likely to cause immediate commercial damage. From there, you have to look for the messier filings: near-miss misspellings, Chinese-language transliterations, logo tweaks, and applications tucked into adjacent trademark classes. Adjacent classes are goods or services related to but not identical to the brand’s core products, and squatters often use them to exploit coverage gaps the brand owner did not anticipate.
You should also monitor filings by former distributors, manufacturers, suppliers, licensees, employees, and business partners. These are the parties most likely to have had access to your brand assets, product plans, packaging, or market entry strategy.
Detection matters less if you do not know what to do next. If the filing is still pending, you may be able to oppose it or, in the United States, submit a letter of protest in appropriate circumstances. If the squatter has already obtained a registration, the options shift. You are typically looking at invalidation on bad-faith grounds, a non-use cancellation, or some combination of administrative and commercial strategy. Those options usually require more time and evidence than an opposition during examination.
Ignoring it is the wrong response in almost every case. Trademark opposition periods and cancellation deadlines are real, and missing them narrows your options significantly.
I have never had a client who regretted registering early. I have had plenty who regretted waiting.
If you are dealing with a suspicious filing in China or the United States, or if you are not sure whether your trademark protection is adequate, reach out. We can help you assess the risk and decide what to do next.
