When assigning a registered trademark, identical or similar trademarks on the same or similar goods must be assigned simultaneously; otherwise CNIPA will notify the applicant to correct within a time limit, and failure to correct by the deadline is deemed a withdrawal of the application. Through a typical scenario, this article analyzes how this mandatory rule affects transactions.
The Scenario
An apparel company, adjusting its business, decided to sell a main trademark registered in the clothing class; the buyer was a newly established clothing company. The parties signed an assignment agreement and jointly filed the assignment application with CNIPA, listing only that one main mark in the application form.
During examination, CNIPA found that the assignor had also registered two defensive trademarks similar to that mark on the same and similar goods, and notified the applicant to correct within a time limit, requiring the similar marks to be assigned together. The seller had intended to keep the two defensive marks; after receiving the notice, the parties renegotiated the price but failed to reach agreement for a long time and ultimately did not correct within the prescribed period. The assignment application was deemed withdrawn, the deal fell through, and disputes arose over the buyer's invested time and the settlement of the deposit.
Analysis of the Rules
First, simultaneous assignment is a mandatory rule. Article 42 of the Trademark Law provides that when assigning a registered trademark, the registrant shall simultaneously assign identical or similar trademarks registered on the same or similar goods. This is not a contract term open to negotiation and waiver — it is a hard requirement in CNIPA's examination.
Second, the rule's purpose is to prevent confusion. If the same source identifier ends up owned by two unrelated parties, consumers cannot tell the origin of the goods apart, and splitting similar trademarks in an assignment itself creates market chaos.
Third, the procedural consequences are clear. Where similar marks are not assigned together, CNIPA notifies the applicant to correct within a time limit; failure to correct is deemed a withdrawal of the application. Official fees already paid are not refunded, and the transaction timetable is completely disrupted.
Implications for Transaction Design
- The buyer's due diligence should cover all trademarks under the seller's name; prepare a list of identical and similar marks and write every mark subject to simultaneous assignment into the agreement and the application form;
- For defensive marks the seller does not wish to assign, consider cancelling them first and then proceeding with the main mark's assignment — but assess the defensive gap left behind;
- The agreement should pre-set a mechanism for handling a CNIPA demand to add marks to the simultaneous assignment, such as a price-adjustment formula or a rescission-and-refund arrangement;
- Identical marks in different classes but on highly related goods may also be required to be handled together in practice, so it is better to define the transaction scope broadly rather than narrowly.
What the simultaneous-assignment rule blocks is not paperwork, but wishful thinking. Verifying the full picture before the deal is far more comfortable than renegotiating after a correction notice.
For the above matters, you may submit a trademark assignment application at MyTMBee, where a recorded trademark agent will follow up on the filing.