This is Part II to all the posts we have written stressing the importance of registering your trademarks in China, including the following:
A client recently sent us an email asking us a slew of good questions on China Trademark Basics. We received this email after we had sent the client the certificate of registration from China’s Trademark Office showing that it now had a registered trademark in China.
Their questions and our answers were as follows:
QUESTION: Is there a specific trademark symbol we should use in China, other than ® on our literature or on our equipment?
ANSWER: China uses the same symbols as the United States and those symbols have essentially the same meaning in China as they do in the United States.
QUESTION: If our Agent Representatives in China generate sales/technical literature about [Company Name] equipment will it them make sense for us to “assign” our trademark?
ANSWER: If someone will use your mark on a product in China AND pay you a royalty in return, you must do a formal trademark license agreement or you are at real risk of losing your China trademark. Not only must you have such a formal trademark license agreement, but you also must register that license with the PRC Trademark Office and, in many cases, with the local authorities as well. However, if you are granting a royalty free license, formal registration is not required. Nonetheless, you should still enter into an agreement with any party that will be using your trademark as such an agreement makes sense to ensure that you can control the manner and use of your trademark.
QUESTION: What is the difference between a trademark assignment contract and trademark license contract?
ANSWER: A trademark assignment occurs when you allow a Chinese party to make full use of your trademark in China in exchange for a payment of some type of royalty. Under a trademark assignment, you lose ownership and control of the trademark because you have assigned those over to the Chinese party. In a license agreement, you allow a third party to make use of the trademark but you retain ownership and control over it. This license arrangement can be a royalty based license or a royalty free license, as discussed above. Very roughly, think of an assignment as a sale and a license as a lease.
QUESTION: I don’t understand the non-use revocation possibility. What proof is needed to show that we are using our trademark?
ANSWER: Chinese law requires that all marks be used in commerce and if a mark is not used in commerce, another party can demand that the trademark registration be revoked. The requirement that the mark be used in commerce means that it must be used with a product or a service in a commercial context. To date, the PRC Trademark Office has not been very strict about this standard, generally accepting virtually anything as a commercial use. China’s courts tend to be considerably stricter regarding this requirement so for this reason, it is a good idea to get out there and use your trademark.
Any more trademark questions, readers?