With the rapid development of the market economy, trademarks are no longer simply used to distinguish the products provider, but also important intangible assets for enterprises, playing a significant role in brand operations.
One of the ways to maximize the value of a trademark brand is through trademark license. Trademark license helps trademark owners maximize brand value, saves licensees from the cumbersome trademark registration process, regulates market order, protects consumer rights, and serves as a vital link between brands and the market, and between enterprises.
According to Article 43 of China Trademark Law, trademark license refers to that the trademark registrant may, by concluding a trademark licensing contract, authorize other persons to use the registered trademark. The licensor shall supervise the quality of the goods on which the licensee uses the licensor's registered trademark, and the licensee shall guarantee the quality of the goods on which the registered trademark is used. Its core principle is "the transfer of the right to use, not the transfer of ownership."
Trademark license is mainly divided into three statutory types.
The first type is an exclusive license, where the licensee has exclusive use of the trademark within the agreed scope. Neither the licensor nor any third party may use it, and the licensee can sue for infringement independently.
The second type is a sole license, where only the licensor and licensee can use the trademark, and no further authorization to third parties is permitted. The licensee must jointly sue for infringement with the licensor.
The third type, the most common in commercial practice, is the ordinary license. The licensor can simultaneously authorize multiple licensees and may also use the trademark themselves. Licensees must obtain authorization before they can pursue legal action.
Trademark license not only helps trademark owners use their trademarks to the maximum extent, but also helps licensees reduce business operating costs and enhance brand competitiveness in the market, achieving a win-win situation for all parties.
Firstly, it eliminates the need for large investments in building factories and opening stores. Licensing allows brands to quickly penetrate the market, saving costs while expanding influence. For example, chain restaurants and milk tea brands have achieved nationwide coverage through ordinary licenses.
Secondly, a stable income can be obtained through agreed licensing fees, realizing the monetization of intangible trademark assets, especially revitalizing idle trademarks and increasing revenue streams. Furthermore, licensing proves that the trademark is in actual use, avoiding revocation due to three consecutive years of non-use, and further enhancing trademark awareness.
Thirdly, trademark licenses can be submitted as direct evidence in subsequent trademark rights protection proceedings. No additional proof of the connection between the trademark user and the trademark registrant is required; only a valid trademark license certificate is needed to establish that the user's use is equivalent to the registrant's use, greatly facilitating rights protection.
It is important to note that trademark license must be legal and compliant. Both parties need sign a standardized contract clearly defining core terms such as the term of use, geographical scope, product category, fees, and quality standards. This contract must be filed and published with the China National Intellectual Property Adminsitration. Without filing, it cannot be used against bona fide third parties. Only in this way can brand value be realized and a win-win situation achieved for both parties.