A trademark license refers to the act by which a trademark registrant authorizes another party to use part or all of its registered trademark rights for compensation, within an agreed-upon period and geographic scope. Unlike a trademark transfer or assignment, a license does not involve a change in ownership.

1. Legal Framework Governing Trademark Licensing

Article 43 of the China Trademark Law

• A trademark registrant may, by entering into a licensing contract, permit another party to use its registered trademark. The licensor is obligated to supervise the quality of the goods on which the trademark is used, and the licensee must ensure that the quality of such goods meets the required standards.

• When a trademark is licensed, the licensee's name and the place of origin of the goods bearing the licensed trademark must be indicated.

• The licensor must record the license with the China National Intellectual Property Administration (CNIPA), and the CNIPA will publish the license. A license that is not recorded cannot be asserted against a bona fide third party.

Article 69 of the Implementing Regulations of the China Trademark Law

• When a registered trademark is licensed, the licensor must file the license recordal with CNIPA within the term of the license contract, along with the necessary supporting documents. These materials must specify the licensor and licensee, license duration, and the scope of goods or services covered by the license.

2. Practical Importance of Trademark License Recordal

1) Protection Against Bona Fide Third Parties and Enhanced Rights Enforcement

Once recorded, the trademark license is published and accessible to the public, allowing consumers and third parties to be informed of the licensing arrangement. A recorded license is enforceable against bona fide third parties and allows for easier regulatory and consumer oversight of the licensee's use of the trademark. It also serves as public notice that the trademark is in use, which may help reduce the risk of non-use cancellation actions by third parties.

2) Use in Trademark Disputes

In opposition, invalidation, or non-use cancellation proceedings, a recorded license helps substantiate the relationship between the registrant and licensee, enhancing the credibility of submitted evidence. In infringement cases, a recorded license may also be used as a basis for calculating damages.

3) Use in Commercial Operations

Many e-commerce platforms require the submission of a trademark license certificate to verify that the licensee has the legal right to use the registered trademark.

3. Required Information and Documentation for Recordal

1. Trademark Information –Registration number, trademark name, etc.

2. Licensee Information –Name and address of the licensee.

3. Licensed Goods/Services –Must align with those approved in the registration certificate. The licensor may license all or part of the registered goods/services.

4. License Duration –Must not exceed the validity of the registered trademark or conflict with the legal status of either party.

5. Type of License:

• Ordinary License: The licensor may license the trademark to multiple parties. Licensees may use the trademark as agreed, but none have exclusivity. The licensor may also use the mark.

• Exclusive License: The licensor may grant the license to only one party, though the licensor retains the right to use the trademark.

• Sole License: The licensor may grant the license to only one party and is not permitted to use the trademark during the license period.

Legal Standing in Infringement Actions:

• A sole licensee may initiate legal proceedings in its own name.

• An exclusive licensee may sue jointly with the registrant or independently if the registrant fails to act.

• An ordinary licensee may sue only if explicitly authorized by the registrant.

5. Identity Documents –Proof of identity for both licensor and licensee.

6. Power of Attorney –If a trademark agent is appointed to handle the filing, a signed/sealed power of attorney from the licensor is required.

4. Conclusion

Although recording a trademark license is not mandatory, and the legal validity of a license agreement formed through mutual consent is not contingent on such recordal, it is strongly recommended to file the license with CNIPA. Doing so offers significant legal and practical benefits, including enforceability against third parties and stronger positioning in dispute resolution and commercial activities.