New regulation on applications for assignment comes into force

The "Regulation on Issues in Relation to Applications for Trademark Assignments" came into force on August 10 2009. The regulation was issued by the China Trademark Office following an increase in the number of cases in which the assignment of a trademark was obtained by fraudulent means. 

In 2001 amendments to China’s Trademark Law 2002 widened the categories of goods and services that could be covered by trademark applications and also allowed the registration of trademarks by natural persons. As a result, there has been a significant rise in the number of trademark applications and assignments. The unauthorized sale of trademarks to third parties has become a lucrative business in China, with numerous websites providing platforms for buying and selling trademarks.

 

According to the Trademark Implementing Rules, although a trademark assignment requires the signature of both the assignor and the assignee, the actual application may be filed by the assignee only. Due to a lenient examination process, many applications for assignments with forged signatures have thus been allowed. 

 

The new regulation formally tightened up the requirements for examining applications for assignment (these requirements have been applied informally since 2006). In essence, the regulation specifies that in case of doubt, the Trademark Office should require a notarized copy of a document identifying the assignor and the assignee, such as an identity card or a certification of incorporation. 

 

In addition, although an application for assignment may still be submitted by the assignee only, the notice of acceptance of the application will be issued to both parties. The assignor may thus challenge the application if it has been submitted without authorization. If the Trademark Office has any doubt as to the authenticity of the assignment, it may also request the production of a notarized copy of the assignment or a declaration from the assignor confirming that the assignment has been authorized.

 

It is hoped that these changes will alleviate the problem of unauthorized assignments. Nevertheless, trademark owners should keep a regular watch on their portfolios and maintain up-to-date particulars, including the address for service, to ensure that the Trademark Office sends any notice to the correct address. In the event that a trademark is assigned illegally, the trademark owner may file an objection with the Trademark Office or lodge a complaint with the police (Article 224 of the Criminal Law prohibits the signing or the execution of a contract to obtain property by fraud) to ensure that its rights are adequately protected. 

Henry Wheare, Lovells, Hong Kong