TRADEMARK LICENSE
1． Is a trademark license agreement required to be recorded with the Trademark Office? What are the consequences of having an unrecorded license agreement?
The Trademark Law provides that trademark license agreements should be recorded with the Trademark Office. An application for recordation of the license agreement should be filed within three months from the date of signature. The TMO will publish the recorded license in the Trademark Gazette.
Once the trademark license agreement enters into effect in accordance with the prescribed dates and conditions, it shall be legally binding between the parties. Whether or not the license is recorded with the CTMO will not effect the parties’ obligations unless they have otherwise agreed. The recordal of a license agreement provides public notice of the terms of the license agreement for the registered trademark. This is effective in guaranteeing honest trading. In practice, the recorded license agreement may help the licensee prove that its use of the registered trademark is legal. An unrecorded license agreement is not strong enough to be against the third party’s use of the registered trademark from good will.
2． What points should the parties concerned should pay attention when entering into a trademark license agreement:
The following points should be considered when entering into a trademark license agreement:
1） The licensee must be qualified as a trademark applicant as provided in the Trademark Law.
2） The licensed trademark should be registered.
3） The licensed trademark should be the same as the registered trademark.
4） The designated goods/services used in connection with the licensed trademark should not exceed those for the registered trademark.
5） The duration of the trademark license agreement should not exceed that of the period of validity of the registered trademark.
6） Without the agreement of the licensor, the licensee cannot sublicense other parties to use the licensed trademark.
7） The licensor should supervise the quality of the goods manufactured under the license agreement, the licensee should retain the quality of the goods.
8） The license agreement should indicate how the licensed trademark prints will be lawfully printed and provided.
9） The licensee has the responsibility of indicating its name and the origin of the goods on the goods bearing the registered mark.
3． What documents should be provided for recordation of a trademark license agreement?
Documents to be provided for recordation of a trademark license agreement should include:
1） The original trademark license agreement jointly signed by both the licensor and the licensee, if it is in a foreign language, a copy of Chinese translation is required;
2） The application documents signed by both the licensor and the licensee;
3） Power of Attorney signed by the licensor;
4） A copy of the Certificate of Trademark Registration.
4. Is it necessary to record the trademark license if the trademark registrant licenses its trademarks to subsidiaries or joint-ventures?
The subsidiaries or joint-ventures and the trademark registrant are different legal entities. Thus, if the trademark registrant licenses its subsidiaries or joint-ventures of distribution agencies to use its registered trademark, a trademark license agreement must be executed and recorded with the Chinese Trademark Office.
5. What measures should be taken if the interested parties decide to change the terms of the license agreement within the validity period or terminate the license agreement before its termination date?
During the term of the license, in any of the following situations, the licensor should re-file an application for recordal of trademark license agreement with the CTMO:
1. A change of the scope of the goods as licensed;
2. A change of the license period;
3. A transfer of ownership of the licensed mark has occurred;
During the term of license, in any of the following situations, the licensor should file applications with the CTMO to modify the license agreement and notify the local AIC at or above the county level in writing:
1. A modification of the licensor’s name;
2. A modification of the licensee’s name.
If the parties terminate the license agreement before its expiration, the licensor should file an application to terminate the license agreement with the CTMO.
6. Shall the licensor be responsible for any acts in violation of the laws by the licensee in the licensee’s use of the licensed trademark?
7. Can a trademark applicant file an application to record the license against its pending trademark application with the CTMO?
No. The Chinese Trademark Office only records license agreements for registered trademarks that have been granted by the CTMO. License agreements for pending trademark applications cannot be recorded.
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