TRADEMARK LICENSE IN CHINA
When you want to have a trademark for your business, the first thing in your mind might be to register a trademark. But it is also available to acquire the trademark by trademark assignment and trademark license.
What is a trademark license?
The registered trademark owner (the “licensor”) allows others (the “licensee”) to use his trademark on all or parts goods/services items by giving a written agreement. It is also a profitable business for some companies. When it comes to the brand “南极人”, it will remind the underwear of Chinese people. It was a famous underwear brand in China. But nowadays, the company doesn’t have real industry but charges for royalty to license the use of their trademarks.
Different from the trademark transfer which is obligate to file a request before the trademark office to get the trademark rights. The trademark license is not obligate to file a record request before but can achieve by an agreement or contract between two parties. However, it is recommended to record the trademark license.
Why do licensors or licensees need to record a trademark license in time?
According to Paragraph 3, Article 43 of the Trademark law, a licensor who licenses others to use his registered trademark shall submit the trademark licensing to the trademark office for file, and the trademark office shall announce the trademark licensing. Without filing, the trademark licensing shall not be used against a bona fide third party. At present, the types of trademark license generally include exclusive license, sole license and non-exclusive license. In practice, it occasionally happened that the owner licenses different parties to use his trademark at the same time, which results in disputes. For example, for an exclusive license, if the owner gives his consent to the second party but without record the license agreement, and authorizes the third party to use this trademark also. Once the third party record the license before CNIPA, the second party cannot use the trademark even if he has an agreement with the owner. Hence, it is recommended to file a record request for a trademark license agreement as soon as possible.
How to file a request to record the trademark license?
A simple request to CNIPA with the following document is enough to record the trademark license, in consideration of the confidential of the agreement, CNIPA doesn’t request for a copy of the agreement, but the contracted parties shall preserve the agreement.
· Request form of recording the trademark license;
· Identification documents of the licensor or licensee;
· A soft copy of the executed power of attorney.
How much to record the trademark license?
The fee for recording the trademark license depends on the classes of the trademark. The current official fee for the trademark license is 150 CNY. But in practice, you may need to entrust an agency to do this if you are not a Chinese citizen, the attorney fee is an extra cost.
Tips for the trademark license agreement
· To specify that if sub-license is allowed for a licensee;
· The licensed trademark should be a registered trademark and still valid;
· The term of the license agreement should come within the validity period of the registered trademark.