Trademark licensing is a common strategy for foreign brands entering the Chinese market. A well-structured license agreement protects your brand while enabling local partners to commercialize your IP. However, China’s trademark licensing system has specific requirements that differ from other jurisdictions.
Types of Trademark Licenses in China
China recognizes three types of trademark licenses: exclusive license (only the licensee can use the mark, even the licensor cannot use it), sole license (the licensor and one licensee can use the mark), and non-exclusive license (the licensor and multiple licensees can use the mark).
CNIPA Recordal Requirements
Trademark license agreements must be recorded with CNIPA to be effective against third parties. While recordal is not required for the license to be valid between the parties, it is essential for enforcement. Key requirements: the license agreement must be in writing, the licensor must have valid trademark rights, and the agreement must specify the scope of the license.
Key Terms for China License Agreements
Essential terms include: scope of license (exclusive, sole, or non-exclusive), licensed goods/services (must be within the scope of the trademark registration), territory (typically all of China or specific provinces), term (cannot exceed the trademark registration term), quality control provisions (the licensor must supervise the quality of licensed goods), royalty structure (fixed fee, percentage of revenue, or hybrid), and termination provisions.
Quality Control Requirements
China’s Trademark Law requires licensors to supervise the quality of goods bearing the licensed trademark. Failure to do so can result in cancellation of the trademark registration. Quality control provisions should include: regular quality inspections, approval rights for product specifications, and the right to terminate for quality failures.
Frequently Asked Questions
Recordal is not mandatory for the license to be valid between the parties, but it is essential for enforcement against third parties and for the licensee to have standing to sue infringers.
Yes, foreign companies can license their Chinese trademark registrations to Chinese companies. The license agreement should be recorded with CNIPA.
The licensor may be held responsible for quality issues. The trademark registration may be cancelled if the licensor fails to exercise quality control. Include strong quality control provisions.
CNIPA license recordal typically takes 1-3 months. The recordal is effective from the date of filing, not the date of approval.
Get Your License Agreement Right
CNIPA recordal and quality-control obligations can trip up even experienced licensors. Our team drafts and records China trademark license agreements that protect your brand. Contact us for a consultation.
