(1) Understand the legal nature and function of the deposit agreement

Understanding the legal nature and role of the deposit agreement and its role in the trademark registration process is the key to entering into a ***The basis of the deposit agreement. A deposit agreement is a contract entered into by the parties to determine the corresponding rights and obligations, and is governed by contract law. Its basic functions are twofold: first, it clarifies the rights and obligations enjoyed by both parties regarding trademark deposit; one party shall bear legal liability when it breaches the contract. The second is to prove to the trademark authority or the people's court that the owner of the cited trademark agrees not to raise objections to the trademark application; and both parties believe that through the performance of the agreement, consumer groups can be clearly distinguished to prevent misleading consumers. ***The specific terms of the deposit agreement should be based on the above. Logically speaking, no consumer group is more concerned about whether their goods or services will be confused by applying for trademark registration than the trademark owner. In other words, citing facts recognized by the trademark owner should have a more factual basis than the subjective thinking of the examiner or judge. If the examiner or judge does not accept the facts cited by the trademark owner, he must provide more convincing evidence or factual basis.

(2) Basic terms and functions of the deposit agreement

1. Statement of facts or “whereas clauses”

This type of clause is often used in the preamble of international contracts; but it is more practical in existing agreements. Because it can clearly show the background of the parties entering into the deposit agreement. If the two parties are in a parent-subsidiary or joint venture relationship, stating such facts should enable the competent authority or court to understand the economic basis for the parties to enter into the agreement, and then use this as a premise to examine the possibility that the trademark may cause consumer confusion. If the parties enter into a survival agreement for historical reasons, the parties to the dispute must first prove the fact that the parties to the dispute have reached a settlement of past disputes under the agreed conditions. The competent authority or court should respect the decisions of the parties as much as possible, which will in turn help stabilize the economic relationship between the parties.

2. "No objection" clause

Since the primary purpose of the parties entering into a deposit agreement is to help the applied for trademark be approved for registration, it is necessary to clearly agree on the rights holder of the cited trademark. They have the obligation not to raise objections to applications for trademark registration. However, since the contract talks about a "consideration" relationship, it should be clearly cited that the trademark right holder must fulfill its "no objection" obligation and that the trademark applicant strictly abide by the terms of the agreement. If the trademark applicant fails to perform its obligations under the agreement, the cited trademark right holder may choose to deal with the following methods:

(1) Directly stipulate in such terms, if the trademark applicant fails to perform the agreed obligations, or perform the obligations If the agreement is not met, the deposit agreement will be automatically terminated; thus making the deposit agreement a "contract with conditions for rescission" in the contract law. Of course, whether the deposit agreement continues to be valid will not have a substantial impact on the hearing of cases related to trademark registration applications by the competent authorities or courts; however, the owner of the cited trademark can at least object to the trademark application on this basis and will not be held responsible for it. Liability for breach of contract. In addition, the citation trademark owner can also provide corresponding evidence to prove that the trademark applicant's use of the trademark in violation of the agreement is an important factor that may cause confusion among consumers; etc.

(2) Or it is agreed that if the trademark applicant breaches the contract, the trademark owner shall have the right to terminate the contract. This is the "right to terminate the contract" in contract law. Once the factual conditions are met, the cited trademark owner can decide whether to unilaterally terminate the contract. From the perspective of contract law, the owner of the cited trademark can issue a notice of termination to the trademark applicant, and the existing agreement will be terminated when the notice reaches the trademark applicant. If the latter has objections to the termination of the agreement, it can appeal to the people's court or adjudicating agency for confirmation. Regardless of how the dispute resolution agency determines it, the owner of the cited trademark can file an objection to the applied trademark based on this. Of course, if the dispute review agency fails to support the "breach of contract accusation" made by the cited trademark owner, whether it should bear the liability for breach of contract for the opposed trademark application will depend on the specific circumstances of the dispute.

(3) If the parties have not agreed on the above terms, when the trademark applicant breaches the contract, the citing trademark owner may also consider claiming the "right of performance defense" under the contract law and then file an objection to the applied trademark. And use this to defend against the trademark applicant’s “charge of breach of contract”. From the perspective of the competent authority or the court, although it has no right to review and determine whether the "right of performance defense" claimed by the owner of the cited trademark is established, it can determine the fact that the owner of the cited trademark filed an objection to the applied trademark after entering into a deposit agreement. ; and clarified that whether such behavior violates the deposit agreement is not the focus of this procedure; this committee or this court has the power and responsibility to independently review whether the applied trademark can be registered.

3. Determine the terms of the applied trademark

Cite both trademarks and clearly define the applied trademark, so as to make the difference between the two as obvious as possible (for example, the following two trademarks );

It is also clearly agreed that trademark applicants shall not unilaterally change the form and scope of use of the applied trademark without the consent of the cited trademark owner.

4. Application for trademark use restrictions

From the perspective of commercial transaction status, trademark applicants generally require the citation trademark owner to enter into a deposit agreement; therefore, the latter should be in a more favorable negotiating position. To this end, strictly limiting the use method and scope of the applied trademark will not only benefit the commercial interests of the holder of the cited trademark, but also reduce the possibility of confusion among consumers. For example, if the same product category is involved, the owner of the cited trademark can require the trademark applicant to only use it on certain products of that category. If the latter violates this agreement, although it does not necessarily constitute trademark infringement, it shall bear liability for breach of contract. Because the legal scope of use of a trademark is different from the scope agreed upon by the parties; the resulting legal liability is also different. In addition, the parties may also make agreements on the packaging and decoration, logo, usage area, sales channels, advertising, etc. of the applied trademark. What is related to such an agreement involves more liability for breach of contract.

5. Permitted Use Clause

The main content of this clause is that both parties agree that if the competent authority does not allow the application for trademark registration based on the deposit agreement, the trademark applicant has The right to use the applied trademark within the agreed territory. Once a trademark applicant has made its trademark recognized by the corresponding consumer group through use, it still has the right to apply for registration of its trademark again based on the deposit agreement. Such an agreement has special commercial significance for trademark applicants, that is, the applied trademark can be used with the consent of the owner of the cited trademark rights, and may make the trademark registrable through use. Of course, whether the owner of the cited trademark agrees to such an agreement requires negotiation between the two parties and how to agree on the corresponding conditions.

6. General terms, such as,

(1) Agreement period: It should be determined according to the specific considerations of the parties. For example, from the perspective of the owner of the cited trademark, you can consider wording such as "If the applied trademark is not approved for registration, the agreement will be automatically terminated on the date of the effective administrative decision or court judgment. If the competent authority accepts this agreement and approves the applied trademark registration, this agreement will be valid until the date the applied trademark expires or is invalidated. "The main consideration for such an agreement is that since the deposit agreement involves two different transactions, the registration and use of the applied trademark, then if the former situation occurs. , then there is no need for a survival agreement. However, if the applied trademark is approved for registration, the validity period of the deposit agreement shall be consistent with the validity period of the trademark, which will at least bind the trademark applicant to the contract (such as the agreement on the scope of use); and bear legal liability in the event of breach of contract to enhance the citation. Protection of trademark rights holders.

From the perspective of the trademark applicant, it can be agreed that "this agreement is valid until the date the cited trademark expires or is invalidated." In this way, even if the applied trademark fails to be approved for registration, the trademark applicant can still rely on The "permitted use terms" in the preceding paragraph apply for the first use of the trademark. After achieving higher significance through use, try to apply for registration again. In addition, after the cited trademark expires or becomes invalid, the trademark applicant is no longer bound by the contract regarding the method of use, scope, etc.

(2) Liability for breach of contract: In view of the fact that the deposit agreement is more concerned with the protection of the rights holder of the cited trademark, it is necessary to clarify the liability for breach of contract of the trademark applicant, including the resulting rights of the cited trademark The person’s right to unilaterally terminate the contract, the trademark applicant’s liability to pay liquidated damages, whether the trademark applicant must stop using the trademark; and so on.

For some specific deposit agreements, it is necessary to consider strengthening the protection of trademark applicants, such as the deposit agreement reached between the real user of the trademark and the trademark squatter. If the trademark squatter's cost of breach of contract is lower than the "profit" it may obtain through breach of contract, the trademark squatter is likely to unilaterally tear up the agreement and resort to objection, invalidation and other procedures again. Such agreements should pay special attention to preventive measures, such as high liquidated damages clauses. However, in a deposit agreement, the owner of the cited trademark is often in a stronger negotiating position. In this way, it is generally possible to reach such a liquidated damages clause only when the deposit consideration is relatively generous.

(3) Applicable legal provisions: This is particularly important when one party is a foreign party. The applicable contract law applies to the interpretation of contract terms and the judgment of the parties' performance of the contract. Since the deposit agreement is intended to be used in the process of registering a trademark in China, it is appropriate to stipulate that Chinese law will apply.

(4) Dispute resolution clause: Since a contractual legal relationship is involved and one party may live abroad, it is very necessary to choose arbitration. This is not only because most of the arbitrators are experts in various fields (including intellectual property fields), but also because arbitral awards can be recognized and enforced in more than 160 countries around the world. China International Economic and Trade Arbitration Commission and Beijing Arbitration Commission are the first choices.