Viewpoint... The main points of risk avoidance of trademark transfer contract disputes.

In July 2020, a hotel management company in Shandong (hereinafter referred to as "a hotel company") signed a trademark transfer contract with an import and export company in Shenzhen (hereinafter referred to as "import and export company"). Article 1 of the contract stipulates that the transferor import and export company will transfer the trademark No. 40656034 "Mao Lu" and the trademark No. 11227892 "Mao Lu" to a hotel company. Article 2 stipulates that the transfer price is 88000 yuan. Article 3 stipulates that the transferor guarantees that there is no trademark identical or similar to the registered trademark on the same or similar goods, and if the aforementioned circumstances occur, it shall be transferred together and no further fees shall be paid. Article 4 stipulates that after the transfer, if the trademark application is examined and granted by the Trademark Office, the transferor shall not have the right to use the registered trademark without the permission of the owner. Article 5 stipulates that the transferee shall guarantee the quality of the goods using the trademark, maintain the goodwill of the trademark, and correctly use the assigned trademark. Article 6 stipulates that the transferor shall not re-register the same or similar trademark. Article 7 The contract shall be made in triplicate, one for each party and one for the trademark office. The contract shall take effect after being sealed and signed by both parties. The contract is signed and sealed by both parties. The contract was signed in Shenzhen.

After the contract was signed, the transferee paid, the transferor notarized the statement and submitted an application for trademark transfer to the Intellectual Property Office. In September 2020, the Intellectual Property Office issued the Notice of Amendment to the Transfer of Trademarks, requiring that two trademarks, Nos. 11227899 and 11227876, should be transferred together in accordance with the provisions of Article 42, paragraph 2, of the Trademark Law and Article 31, paragraph 2, of the Regulations for the Implementation of the Trademark Law. The transferor does not cooperate with the transferee to handle the transfer procedures at the end of the correction. The two trademarks that require correction will be revoked on March 26, 2023. The three-year non-use procedure is under review. On March 28, 2023, the transferor re-applied for the "thatched cottage" trademarks No. 70509912 and 70510338, which are the same as the two trademarks required for correction, with similar products and the same trademarks.

In October 2023, the transferee filed a lawsuit with the people's court against the transferor's failure to perform the Trademark Transfer Contract, claiming that the Trademark Transfer Contract expressly agreed that the defendant would ensure that there was no similar trademark, and if there was a concurrent transfer, it would not be allowed to register the same similar trademark, requiring the defendant to continue to perform the contract, six "thatched" trademarks (2 as agreed in the transfer contract, 2 as required by the transfer correction, and 2 as reapplied on March 28, 2023) were transferred to the plaintiff. The defendant (transferee) argued that the Trademark Transfer Contract was drafted by the plaintiff and should be explained against the plaintiff. The plaintiff should know the trademark situation of the defendant. The defendant believed that the contract stipulated the price of two trademarks. If the trademark transfer was increased, the cost should be increased. The defendant believed that the transfer of the six trademarks together was unfair and claimed to terminate the contract. Since the trademark was not successfully transferred, the trademark owner was still the defendant, and the defendant had the defendant had the right to reapply for the trademark, the reapplied trademark should not be attributed to the plaintiff.

The court held that the main disputes were: 1. whether the plaintiff had the right to require the defendant to transfer the trademark involved in the case, and if so, how to determine the trademark that should be transferred; 2. whether the plaintiff had the right to claim that the defendant should pay liquidated damages and rights protection costs.

The court held that the "Trademark Assignment Contract" was legal and valid, and both parties should exercise their powers and perform their obligations in accordance with the contract. The plaintiff paid the price in full, and the defendant should promptly perform the two trademark transfer obligations stipulated in the contract. Secondly, the two trademarks required by the State Intellectual Property Office to be transferred together conform to the contractual agreement of Article 3 of the Trademark Transfer Contract, which states that "the transferor shall not have the same or similar trademark as the registered trademark on the same or similar goods, and shall be transferred together without any further payment of fees. Finally, the two trademarks newly applied by the defendant in March 2023 were the same trademarks on similar goods after the signing of the Trademark Assignment Contract. Article 6 of the Trademark Assignment Contract "The transferor shall not re-register the same similar trademark", and the two trademark acts re-applied by the defendant are breach of contract, the breach of contract is intentionally obvious, and the breach of contract has continuity and consistency. The defendant's true intention was to sign the Trademark Transfer Contract, and there was no apparent unfairness in the signing of the contract. The defendant, as the transferor of the trademark, has a certain understanding of its own trademark and trademark transfer, and should have some foresight of the similar trademark. As for the two trademarks that have been revoked, the plaintiff may sue the defendant separately according to the contract. Accordingly, the court partially supports the plaintiff's claim. Since the revoked two trademarks did not affect the plaintiff's acquisition of the target trademark rights, the plaintiff and the defendant reached an enforcement settlement during the enforcement phase, and the defendant cooperated with the plaintiff to transfer the remaining four valid trademarks.

The above-mentioned case is a dispute caused by the unclear agreement of the trademark transfer contract. Although the court finally supported the plaintiff's claim, it took the plaintiff a long time to obtain and use the trademark right due to the long dispute period. Based on this, in a contract for the sale of trademarks or a contract for the transfer of trademark rights, the author takes the registered trademark, the trademark in the application, and the trademark transfer announced in the first instance as an example, and the Trademark Transfer Contract should contain the following points.

1. The guarantee clause of the transferor: the transferor is the holder of the transferred trademark and has the right to dispose of the transferred trademark, and shall truthfully state and disclose the true situation of the transferred trademark to the transferee, and ensure that the trademark is registered legally and in good faith, it also guarantees that the registration application for the transfer of trademarks does not include but is not limited to hoarding, cybersquatting, fraudulent acquisition, infringement of the prior rights of third parties, carrying, and brand names that violate the provisions of the Trademark Law. Before and after the signing of the transfer contract and during the performance of the contract, the transferred trademark does not set up other rights and obstacles, including but not limited to the situation of being pledged, mortgaged, frozen, leased, licensed, cooperative investment and other situations that affect the transferee's transfer of trademark rights/use of trademark rights, and the trademark will not be transferred to a third party separately, there is no third party's claim including ownership, use right, income right, possession right, creditor's rights, judgment or adjudication of trademark ownership disputes, if the same or similar trademark should be transferred to the transferee, and the transferee will not pay any other fees, after the contract is signed and during the performance process, the same or similar trademark shall not be registered again, because the application for registration of the same or similar trademark leads to the liability for breach of contract, the trademark applied for registration shall also be transferred to the transferee at no cost to the transferee. The transferor shall stop using the transferred trademark from the effective date of this Agreement, and the market shall be cleaned up on the date of the announcement of the approval of the transfer/transfer of the trademark, and the transferor shall have the right to recover the loss caused to the transferee due to the use of the transferred trademark. The above guarantee of the transferor shall extend to the interested parties, affiliated companies or other related parties of the transferor.

2. Guarantee clause of the transferee: The transferee shall pay the price in full and in time in accordance with the contract, and ensure that the transferred trademark is used in strict accordance with the provisions of the Trademark Law and relevant rules in the process of using the transferred trademark. If the dispute caused by the use of the trademark causes the loss to the transferor, the transferor shall have the right of recovery against the transferee.

1. Retrieval of identical or similar trademarks.

Before entering into a contract for the transfer of trademark rights, identical or similar trademarks on the same and similar goods/services shall be retrieved and included in the contract as assigned trademarks. At the same time, it is clear that during the transfer period, the trademarks recognized by the Intellectual Property Office that should be transferred together belong to the content of the contract. At the same time, it is clear that the transferor shall not declare the same or similar trademark.

2. The division of liability for the risk of not using the procedure for the transfer of a trademark that has been revoked for three years.

In this case, the transferred trademark has been approved and registered for three years, which is in line with the conditions stipulated in the second paragraph of Article 49 of the Trademark Law on the cancellation of the three-year non-use initiation. At the same time, because the Trademark Law and related rules do not clearly stipulate the review period for trademark transfer, statistics from current practice take about three to four months to complete the transfer (of course, the Intellectual Property Office has also issued provisions for expedited application for transfer). Based on the trademark transfer from the application to the issuance of the approval of the transfer certificate has a period of time, therefore, during this period of time there may be a transfer of the trademark is proposed to cancel the three-year non-use procedure. The assignment contract should clearly reflect the division of responsibility after the withdrawal of the three procedures. From the perspective of equality and fairness, the time limit is the date of the trademark approval transfer/transfer announcement. If the trademark transferred before this time is withdrawn for three times, the transferor shall take necessary legal actions to maintain the validity of the trademark. If the trademark is canceled due to the lack of evidence of use or the invalidity of the evidence provided by the transferor, the transferee has the right to terminate the contract, the right of release shall be calculated from the date of the cancellation decision issued by the Intellectual Property Office. Further, if the transferee and the transferee agree that the intellectual property office determines that the validity of the evidence is defective and it is necessary to initiate the revocation review procedure, the exercise of the transferee's right to revoke the contract shall be automatically postponed to the date when the intellectual property office issues the decision on the revocation review of the trademark, and so on, until the end of the proceedings and the exhaustion of the rights. After the date of the announcement of the approval of the transfer/transfer of the trademark, if the transferred trademark is revoked for three years, the transferee shall take all necessary legal actions to maintain the validity of the trademark, that is, the transferee shall bear the responsibility for this, but the transferor shall do the necessary Obligations to provide evidence of use before the approval of the transfer. In addition, when signing the Trademark Transfer Contract, the transferor shall issue a trademark use authorization or trademark license contract, allowing the transferee to use the transferred trademark to make necessary business preparations. As the transferee, it is necessary to submit a new trademark registration application that is the same as the assigned trademark when submitting the trademark transfer.

3. On the transfer of correction risk responsibility division.

The Intellectual Property Office may issue a transfer correction in the course of examining the transfer of a trademark. In addition to the correction that requires the same or similar trademarks to be transferred together, there are also some such as "the transferor has committed acts of peddling trademarks and maliciously hoarding and transferring trademarks for profit, so please submit additional evidence of the transferor's use of the trademark and explain the intention of use; If the evidence cannot be provided without justifiable reasons or is invalid, it is determined to constitute a transfer with other adverse effects in paragraph 3 of Article 42 of the Trademark Law". The issuance of this kind of correction notice by the Intellectual Property Office is generally based on the large amount of trademark registration under the name of the transferor, the large span of the registered industry, more and frequent transfers, and the possibility of making profits. If it is difficult for the transferor to overcome the correction request, the transferee shall have the right to terminate the contract on the date of expiration of the correction period.

4. The division of liability for the risk of the procedure for the invalidation of the transferred trademark.

The reasons for the case of invalidation of a registered trademark can be classified into two types. One is absolute reasons. The provisions of Article 44 of the Trademark Law have three paragraphs, which clarify the scope of the subject qualification and the review period for initiating invalidation on absolute reasons. And relief procedures. If the trademark in the assignment is invalidated on an absolute basis, the assignee has the right to exercise the termination of the contract from the date of receipt of the instrument of invalidation. From the absolute reason for the invalidation of the trademark, the transferred trademark itself is the lack of distinctive features can not be registered or can not be used or violate the prohibition provisions, infringing the scope of the public interest, the transferor knows or should know. The second is to mention trademark invalidation on relative grounds. Article 45 of the "Trademark Law" stipulates the scope of subject qualifications, review period and relief procedures for invalidation. In this regard, the transferee and the transferee shall earnestly consider the specific agreement on the time of approval and registration of the transferred trademark. If the approval has been completed for five years, the prior right holder shall lose the right to invalidate the trademark except for the malicious registration of the well-known trademark. If the transferred trademark is less than five years old, the contract may agree on the division of legal risk liability within five years of approval of registration, and may also agree on the date of approval of the trademark transfer/transfer announcement as the period of liability, with reference to the rules of the three-year non-use procedure for the cancellation of the transferred trademark.

5. The assignment contract deals with the division of liability for the procedural risk of the transfer of the trademark being opposed during the announcement of the first instance.

In this case, the trademark transferred has not been approved for registration announcement, that is, the application for transfer is submitted during the announcement of the preliminary examination of the trademark, the trademark is opposed, or the trademark is still under examination when the transfer is initiated, and the trademark is subject to the procedure of objection during the announcement of the preliminary examination before the transfer is approved. For the treatment of this situation, it may be considered that from the purpose of signing the transfer contract, the transferee may agree on the right to terminate the transfer contract from the date of receipt of the notice of objection, or the right to terminate the trademark transfer contract from the date of the objection decision issued by the Intellectual Property Office with adverse consequences.

6. Agreement of the competent court.

The transferee may have jurisdiction over the court by agreement.

The contract for the transfer of trademark rights still belongs to the scope of contract disputes. If there is no agreement in judicial practice on litigation costs such as legal fees for rights protection, the people's court may not support it.