Don’t Ignore those Issues While Using a Registered trademark

With the improvement of the awareness of IPR protection, more and more enterprises have applied for the registered trademark (“RT”). However, if the RT has been used improperly, it could not add the reputation and value of the owner and the RT itself, but might stimulate the negative impact and even legal risks.

Take a basic issue on how to mark RT for example, from the aesthetic point of view, some enterprises would mark the symbol ® in the middle of RT, or mark TM besides RT like some foreign companies. In fact, according to “Regulation for the Implementation of the Trademark Law” Article 63, there are only 3 modes to mark the symbol: 1) Mark “注册商标”; 2) Mark “注” with a circle around; 3) Mark “R” with a circle around. In addition, the symbol could only be marked in the right upper or lower position of RT. Take another common issue for example, some enterprises, especially for those commissioned processing business, the enterprises would like to mark 2 or more than 2 RT on the same commodity. Till now, there is no nationwide laws and regulations which has regulated such issue, but for local level, Administration for Industry and Commerce of Jiangsu Province has regulated such issue in “Regulations on the Trademark Management (Trial)”. But in view of Article 49 of “Trademark Law”, which has specifically prohibited the RT user to change RT, the registrant’s name, address or any other registered matters concerning RT without authorization. In view of this, if an enterprise mark 2 or more than 2 individual RT on the same commodity, such action might be deemed as “changing the RT without authorization”, or the new trademark combined with the 2 RT might be deemed as a counterfeited RT.

The third issue is about collecting and keeping the evidence of using RT. “Trademark Law” has stipulated that if a RT stays unused for three consecutive years, it shall be abandoned. In order to reduce and eliminate the revocation risk, if an enterprise has applied a RT, but has not used it on any commodities or services, it would be better to use such RT in the enterprise’s website for promotion or authorize the others to use. If such RT has been used on any commodities or services, then the enterprise could keep the evidence of using refers to the requirements for keeping the evidence of using a well-known trademark as stipulated in Article 14 of “Trademark Law” . For example, the documents related to the sales of the relevant commodities; the survey /report related to the market share or the relevant consumer’s awareness of the relevant commodities; the sales performance; the region, cost of the promotion for the relevant commodities/trademark.

Furthermore, for those foreign investors, while merge the domestic enterprises, or establish a JV, or cooperate with domestic enterprises, and plan to use their RT, they shall pay attention to the relevant regulations. For example, according to “Provisions on the Merger or Acquisition of Domestic Enterprises by Foreign Investors”, if foreign investors merge a domestic enterprise and obtain the actual control over the enterprise, and if such merger causes transference of actual control over the domestic enterprise who possesses a resound trademark or China’s time-honored brand, the parties to the merger shall apply to the MOC. According to the examination result, the parties might be requested to stop the transaction, assign relevant equity or assets, or take any other effective actions, to eliminate the affect of the merger on the security of national economy. So even the involved RT is not a well-known trademark, it would be better for both parties to prescribe the ownership, usage and royalty fee and etc. in the JV contract.