The LEHMAN, Lee & Xu China Trademarks Newsletter keeps you up to date on recent developments in
China Trademark law and practice
Surprising Changes to China Trademark Licensing
It is never a dull moment in China trademark law. The Trademark Office at the end of last year issued revised guidelines on Trademark Licensing. The changes are intended to bring the Trademark licensing regulations in line with changes to the Trademark Law in 2014. There are significant departures from prior law.
In addition to streamlining the process of registration of a Trademark License via the filing of a standard form, the recent revised guidelines surprisingly eliminate the need to register Trademark License Contracts with the TMO. Substantive criteria regarding the content of these agreements have also been eliminated.
Previously the TMO would review the content of the underlying Trademark Agreement and would reject those which did not comply with regulations. This presented a hassle for international companies with licensing agreements spanning multiple jurisdictions.
Interestingly the old regulations required a Trademark License agreement to be registered within three months of its execution; however the new regulations do not specify a time limit. Registration is still technically required, though the only penalty for failure to register will be the lack of ability to enforce the license agreement against a third party acting in good faith.
As a side note, the State Administration for Foreign Exchange no longer requires Trademark License registration certificates when licensing payments are made to foreign companies. Therefore some may question the value in formal registration of Trademark Licenses going forward.
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