When it comes to trademarks, many people think that transactions such as trademark transfer and licensing are easy to handle, but in fact we will encounter many risks in the process of trademark sales. Only by understanding these risks can we to be effectively avoided.

As an important part of intellectual property transactions, trademarks have various transaction forms. In addition to trademark transfer, licensing, and pledge, in business activities such as corporate mergers and acquisitions, OEM/ODM, joint ventures, cooperation, and franchising, There may be trademark transactions. Different forms of trademark transactions have their own different risk issues, but they also have some similarities. From the perspective of risk investigation, the manager lists some common risks that may exist in trademark transactions to remind companies to prevent regrettable or even regrettable results, or to minimize the impact of negligence.

01 Whether the trademark has been approved for registration

If the trademark traded is not registered at all, or the registration is not renewed in time when it expires, or has been revoked or invalid according to law, there is no legal There is no exclusive right to a trademark on the Internet. Anyone has the opportunity to use the trademark, and it may even be registered by others, thus hindering the ownership or use rights obtained from the trademark transaction. Of course, assuming that the unregistered or unrenewed trademark is a well-known trademark or the unique name or appearance (packaging, decoration) of a well-known product, it can still enjoy the protection of the Trademark Law or the Anti-Unfair Competition Law. However, it must It is not easy to claim a well-known trademark or the unique name or appearance of a well-known product.

02 Is the trademark still under application for registration?

This is a continuation of the previous question. In some cases, although a trademark has not been approved for registration, a formal application for registration may have been filed. However, such a trademark may not be approved for registration due to legal obstacles such as lack of distinctiveness and infringement of prior rights.

The Supreme People's Court held that laws and regulations do not prohibit the licensing of others to use unregistered trademarks, and the parties to a trademark licensing contract have no special agreement on whether the trademark should be registered. Claims that the license contract is invalid on the grounds that failure to obtain registration constitutes fraud will not be supported. In fact, many courts have recognized that unregistered trademarks can be transferred and licensed. However, the legal and commercial risks of the transferee and licensee will be extremely huge. Therefore, you must check the other party’s trademark registration status. Of course, It should also be made clear when signing the contract that the trade mark must be a valid registered trademark. Because even if the trademark is finally approved for registration, trademark objections may be issued during the process from trademark application to trademark approval and registration, leaving you exhausted.

03 Whether the other party has the right to dispose of the trademark right

After finding out the authenticity of the trademark registration, you also need to find out whether the person you are dealing with has the right to dispose of the registered trademark. The right holder of this registered trademark (registrant or owner), or an agent specifically authorized by the right holder, or a licensee who allows sub-licensing. If the trademark is owned by the owner, has it been approved by the owner? You can check the trademark registration certificate, trademark transfer contract, transaction authorization letter, or check the trademark announcement or trademark website to find out who the real rights holder of the traded trademark is and who currently has the right to transfer, license or pledge the trademark.

04 Where is the trademark registration valid?

The validity of trademark rights is regional. Trademarks registered in France are only valid within the country, and trademarks registered in France are only valid within France. If you want to obtain the ownership or right to use a domestic trademark, you must confirm that the trademark has been approved for registration. If you want to use this trademark to manufacture goods and export them to Europe, then in addition to needing to register this trademark, you also need to obtain trademark registration in relevant European countries, otherwise you may encounter trademark infringement trouble when exporting. .

05 When does trademark registration expire?

Trademark registration has a time limit. The validity period under my country’s Trademark Law is 10 years. However, the registration can be renewed upon expiration. The key issue is that if the trademark registration is about to expire, the relevant transaction parties must urge the trademark registrant to complete the renewal procedures. Especially before the transfer (the extension after the transfer is the transferee's own business), or during the licensing and pledge period, it is necessary to ensure that the trademark registrant renews the registration to avoid damaging his or her commercial rights and interests.

06 Is the trademark being traded consistent with the registered trademark?

Although the other party’s trademark has been approved for registration, is the trademark being traded consistent with the approved registered trademark? According to Article 56 of the Trademark Law, “the exclusive right of a registered trademark is limited to the trademark approved for registration and the goods approved for use.” Trademarks that are inconsistent with the registered trademark (especially those that are significantly different) may not enjoy exclusive use of the trademark. right. If you accidentally use a registered trademark after buying it, it may also constitute an illegal act of changing the registered trademark on your own or passing off a registered trademark.

07 What are the goods or services designated for use by the trademark?

The exclusive right of a registered trademark is limited to the goods or services designated for use. It is necessary to find out whether the right holder has exceeded the approved scope of use, issued a license or engaged in transfer, because this may cause problems such as trademark infringement, if others have registered the same or similar trademarks on those goods or services that the right holder has exceeded the approved scope of use. . In addition, you should also check whether the products or business scope you need to use are consistent with the goods or services specified in the other party's trademark registration. Checking the compatibility of the other party's trademark registration with your own business is also a very important part of the investigation.

Who owns the copyright of the 08 trademark?

Currently, trademarks are composed of rich elements, including text, graphics, letters, numbers, three-dimensional logos, color combinations and sounds, as well as the above combination of elements. The graphics, three-dimensional logos, sounds and texts (such as slogans) may meet the originality requirements of the work and enjoy copyright protection. However, the copyrights of these trademarks may not be in the hands of the trademark owners. For example, according to the provisions of the Copyright Law, the copyright of a work entrusted to others to create, in the absence of an agreement, belongs to the creator. Therefore, if the trademark owner’s trademark is created by someone else, and there is no agreed ownership agreement, even if the trademark enjoys copyright, it is still the copyright of “someone else”. Although the trademark owner can continue to use the copyright according to the purpose of the commissioned creation. The trademark is used legally, but after all, the rights are not fulfilled and troubles arise.

09 Whether trademark registration meets authorization conditions

Trademark registration needs to meet a series of authorization conditions such as distinctiveness, non-functionality, not being a prohibited sign, and not infringing the rights of others. Therefore, Trademarks should be evaluated to avoid being declared invalid in the future because they violate legal regulations or infringe on the rights of others. For example, the weak distinctiveness of a trademark has a huge impact on trademark protection. A trademark with weak distinctiveness is easy to be reasonably used by others (including competitors) and is difficult to prevent. It can be seen that the distinctiveness of a trademark has a great impact on the scope of trademark protection or exclusivity.

10 Whether the trademark has become a common name

According to Article 49, Paragraph 2, of the 2013 New Trademark Law, if a registered trademark becomes a common name for the goods approved for use, any Any entity or individual may apply to the Trademark Office to cancel the registered trademark.

11 Whether there are identical or similar trademarks

If you acquire the ownership of the other party’s trademark through trademark transfer, corporate mergers and acquisitions, etc., in order to avoid market confusion caused by the existence of relevant commercial marks in the future, or even If you violate the mandatory provisions of the law, you need to review whether the other party has commercial marks that are similar to the traded trademarks, and further consider whether it is necessary to transfer these related defensive trademarks, joint trademarks and other commercial marks.

According to the provisions of Article 42, Paragraph 2 of the Trademark Law, “When a registered trademark is transferred, the trademark registrant shall transfer a similar trademark registered on the same kind of goods, or a trademark registered on similar goods. Identical or similar trademarks shall be transferred together.” Paragraph 3 of this article stipulates: “For transfers that are likely to cause confusion or have other adverse effects, the Trademark Office will not approve the transfer and notify the applicant in writing and explain the reasons.” Trade marks, similar trademarks registered on the same or similar goods, and identical trademarks registered on similar goods shall be transferred together. This is a mandatory requirement under trademark law, otherwise the transfer will encounter legal obstacles.

12. Whether to tolerate cross-class registration of identical or similar trademarks

The Trademark Law does not require that identical or similar trademarks be registered on different or dissimilar goods as trading trademarks. However, from the perspective of commercial prudence, it is still necessary to evaluate which categories of identical or similar trademarks should be acquired together to avoid business confusion in the future.

For example, if the right holder has a trademark registered in Category 12 cars and Category 28 toys, it is best to acquire the trademark on the toys together with the trademark on the car. Do not split it into two companies after the acquisition, otherwise the trademark will be owned by two companies in the future. The toy car will conflict with your real car's trademark use.

13. Is there a trade name or domain name that is the same as the trading trademark?

In order to effectively protect trademarks, some companies not only register defensive trademarks and joint trademarks, but also combine the trademark with the trade name (company name) ), the domain name remains the same. Although you bought the trademark, but they still retain the same font size or domain name as the trademark, you need to consider whether this is an acceptable result for you? If Shanghai Mickey Toys Co., Ltd. sells you the "Michi" toy trademark, but the other party is still called Mickey Toys Company after the trademark is sold, it is an ambush bomb after all. Imagine that if the other party is still making toys, although it does not use the "Michi" trademark, it still clearly displays "Michi Toys Company" on the toy products or its packaging. Will consumers be able to tell the difference clearly?

14. Are there any restrictions on pledges of trademarks?

Assuming that a registered trademark has been pledged and then transferred to you, obviously this is not a good thing. Because once the debt guaranteed by the trademark cannot be paid off, the pledgee (creditor) has the right to use the exclusive right to the trademark at a discount, or to receive priority in repayment with the price from the auction or sale of the exclusive right to the trademark. As a result, the trademark you paid for will eventually fly into the arms of others.

15. Whether the trademark is subject to licensing restrictions

In addition to the pledge of trademark rights, there are also restrictions on trademarks such as existing licensing agreements, especially exclusive licenses. According to the characteristics of an exclusive license, except for the licensee, the trademark owner is not allowed to issue licenses to third parties, nor can it use the trademark itself. If there is already an exclusive license, you are not allowed to obtain a second trademark license from the right holder. Otherwise, you will get an unstable license, and the licensee who enjoys the exclusive license will soon come to interfere. If the transferred trademark has been licensed to others, according to the similar rules of "sales do not violate leases", the transferee will still be bound by the previous license, and there may even be a situation where the transferee enjoys ownership but cannot use it (such as third party has an exclusive license).

16 Is there any dispute over the trademark?

Is there any dispute over the trademark being traded, such as ownership dispute, cancellation of registration or declaration of invalidity? If these disputes exist, the other party may lose ownership of the trade mark in the future, and even the registration of the trade mark may cease to exist due to cancellation or invalidity. It is worth noting that in some trademark contract dispute cases, if there is no explicit agreement, even if the trademark registrant does not disclose the facts of the trademark dispute, he does not need to bear liability for breach of contract.

The above content mainly introduces you to the risks of trademark trading. I hope it can be helpful to you. In order to better avoid risks, everyone must be cautious when buying and selling trademarks. After all, this is directly related to our own interests, so we should not underestimate it! Trademark sales