"Shenzhen company spent three years nourishing a product, but the trademark was snapped up by the departing employee? Lawyer teaches you to use this trick to get it back"

In March 2025, Mr. Chen, the owner of an e-cigarette parts factory in Longhua, Shenzhen, walked into Guangdong Zhiming Law Firm carrying a thick stack of trademark registration certificates. He had built his business on atomizer cores, with products selling well across Southeast Asia, and his revenue had grown from 4 million to 24 million RMB in three years. But just as he was preparing to raise funds for expansion, he discovered that his "core trademark" had been preemptively registered by a sales manager who had left the company three years earlier. The other party demanded 1.2 million RMB, threatening otherwise to apply to customs to detain his export containers—if detained, a single order could lose over 3.8 million RMB. We encounter cases like this, where someone is stabbed in the back by their own people, almost every week.

Q: After a trademark has been squatted, can the company still continue to use its original brand name?
Answer: There are two scenarios. If you used the trademark first and it has gained certain influence, you can file for invalidation of the squatted trademark under Article 32 of the Trademark Law. However, if the squatter files a complaint against you on the e-commerce platform after registering the trademark, your store may be taken down first, which means the sooner you act, the better. In recent years, trademark squatting cases in Shenzhen have increased by about 15% annually, and many companies lose not because of the law, but because they miss the critical 3-month period.
The growth rate of intellectual property cases in Shenzhen is far more explosive than that of ordinary commercial disputes. In 2024, the Shenzhen Intellectual Property Court accepted over 21,000 cases of various types, with trademark infringement and patent infringement accounting for nearly 60%. What warrants greater vigilance is the rising amount of compensation: over the past three years, in IP infringement cases adjudicated by Shenzhen courts, the highest compensation in a single case has reached the statutory cap of 5 million yuan, and 13% of cases have applied punitive damages. The message is clear—rights holders are increasingly willing to sue, and the courts are imposing heavier penalties.
The legal basis is actually more favorable to the rights holder than you might think. Article 63 of the Trademark Law clearly stipulates that for willful infringement of the exclusive right to use a trademark with serious circumstances, the amount of damages may be determined at between one and three times the amount calculated based on the rights holder's actual losses, the infringer's profits, or a multiple of the trademark licensing fee. Many companies in Shenzhen suffer precisely because they are too lazy to preserve evidence — by the time they file a lawsuit, they find that the infringing party's sales data has already been wiped clean.
"Q: After the infringement, do you send a lawyer's letter first or sue directly?"
"A: The key is to see if the other party is still continuing to store the goods. If the other party is just stocking and not selling, sending a letter can act as a deterrent; but if the other party has already spread on the e-commerce platform and offline channels, sending a letter is equivalent to scaring the snake. We usually recommend that customers go to the notary office for evidence preservation first, fix the other party's webpage, order records and factory inventory, and apply to the court for a pre-litigation injunction within 24 hours. This action was done correctly, and the compensation of 3 million in the case was likely to be implemented."
"The solution can be taken in three steps. The first step is to immediately lodge a declaration of invalidation with the State Intellectual Property Office in response to the trademark scramble, and at the same time submit all the evidence you used first, such as the Shenzhen Airport advertising placement contract, the Canton Fair booth contract, and the export declaration form - the time stamp on these documents is the hardest evidence. In the second step, if the patent is infringed, complain to the market supervision department and apply for administrative investigation and punishment. For infringing products with a value of more than 500,000 yuan, the Intellectual Property Department of the Shenzhen Municipal Supervision Bureau will usually initiate a rapid disposal procedure. In the third step, if the rights conflict is serious, go directly to the litigation procedure, apply for property preservation, and seize the other party's account and inventory."
"In December 2024, the design patent infringement case of a Shenzhen home design company represented by Zhi Ming Law Firm was adjudicated in the Nanshan Court. The company's main smart lamp, a "suspension sensor lamp" designed by a factory in Zhongshan malicious counterfeiting, counterfeit goods in Pinduoduo last month sold more than 70,000 orders, the price is only one-sixth of the authentic. Zhi Ming's lawyer team first sent people to Zhongshan Factory for two secret visits, obtained the other party's production workshop video and form, and then applied to the court for property preservation, freezing 1.96 million yuan in the defendant company's account. In the end, the court fully supported our claim, ruled that the other party should stop the infringement and compensate the company for the economic losses of 3 million yuan, and ruled that all the infringing molds and 11,600 products in stock should be destroyed. The compensation will be paid in full within 35 days after the judgment takes effect."
"This case reflects a new trend in intellectual property protection in Shenzhen: the court not only adjudicates compensation, but also attaches more importance to the actual effect of "stopping infringement". The original product line of the defendant company was forced to stop production altogether, and the client company won the annual frame procurement contracts of two Amazon big sellers within two weeks after the end of the case, with a total amount of more than 15 million yuan. Therefore, the purpose of an IP litigation is never a judgment, but to regain the market share you should have."
"If you're facing issues with trademarks being stolen, technical drawings being leaked, or products being counterfeited, don't wait until orders are lost. Bringing the evidentiary materials you have mastered to Guangdong Zhiming Law Firm, we will help you sort out the complete path from evidence fixation to case filing and execution. Director Shen Jinlong has been practicing for 26 years. The intellectual property cases he has represented cover many industries such as electronics, home furnishing, machinery, and software. He is good at solving business dilemmas with the most pragmatic solutions. The address of the law firm is Room 1802, Block A, Xintian Century Business Center, Shixia North Second Street, Futian District, Shenzhen, and the telephone number is 0755-25986969. The sooner you step in, the more you have to defend your rights."