A trademark is not only used on your own goods — it can be licensed to others: merchandise, co-branding, franchising, and contract manufacturing are all essentially trademark licensing. Done well, licensing is pure profit; done poorly, it creates competitors and counterfeits for yourself. This article explains the differences among the three license types, the role of license filing, how to write an authorization letter, and two special risk points in merchandising.
1. Three License Types: Decide What You Give Away First
- Exclusive license: only the licensee may use the mark; the licensor itself may not use it and may not license anyone else; the licensee can usually sue infringers independently;
- Sole license: the licensor may use the mark itself but may not license third parties; the licensee can generally sue independently, or in its own name when the rights holder does not sue (per the contract and judicial interpretations);
- Ordinary license: the licensor may license others; the licensee generally cannot sue independently without the rights holder's express authorization.
Basis for choice: franchisees and distributors usually receive ordinary licenses; co-branding with core partners may warrant a sole license; consider an exclusive license only when an entire category is handed to one operator entirely. The greater the rights granted, the harder they are to take back.
2. Five Things a License Contract Must State Clearly
- Trademark and registration number: state the registration number and the approved goods or services, avoiding colloquial expressions like "the brand";
- License type and territory: exclusive, sole, or ordinary, and which countries or regions are covered — territory matters especially in cross-border licensing, where trademarks in different jurisdictions are different rights;
- Term: start and end dates, and the interface with the trademark validity period (state whether the license automatically continues after trademark renewal);
- Goods scope and quality requirements: the licensor has the right to supervise the quality of the goods on which the licensee uses the trademark — this is both a statutory obligation and a risk-control tool;
- Termination and recovery: how inventory is handled after termination, how identifiers are destroyed, and how platform accounts and domains are handed over.
3. License Filing: What Happens If You Don't
Article 43 of the Trademark Law provides that a party licensing another to use its registered trademark shall file the license with the trademark office and submit filing materials within the validity period of the license contract; Article 69 of the Implementing Regulation further specifies that matters such as the licensor, licensee, license term, license type, and the scope of licensed goods or services must be stated. The key consequence: a license that is not filed cannot be asserted against bona fide third parties.
Practical meaning: if the licensee sub-licenses the trademark to someone else, or a rights conflict arises, an unfiled license cannot stand against third parties. In addition, licensees usually need to submit the license contract for platform complaints, customs recordation, and exhibition complaints — a filing certificate makes the chain stronger.
Note: the Trademark Law was revised and adopted on June 26, 2026, effective January 1, 2027, with article numbers shifted and the licensing provision moved accordingly. For application during the transition period, defer to the latest text published by the competent authorities.
4. How to Write an Authorization Letter (LOA) That Works
Whether a formal license or a simple brand authorization, an authorization letter that passes platform and customs review usually needs to include:
- The full company names of the authorizing party (trademark rights holder) and the authorized party, exactly matching the authorized party's registered name;
- The authorized trademark name and registration number;
- The content of the authorized rights (right to sell, right to promote, right to use the trademark, etc.);
- The authorized territory and validity period;
- The authorizing party's seal, and the representative's signature where the authorizer is a legal entity;
- Documents that are authentic and unaltered.
In cross-border scenarios, authorization letters from overseas rights holders often require notarization and legalization with translations attached; where the authorization chain has intermediate tiers, the upper tier's right to sub-license must also be proven.
5. Merchandising: Two Places Where Trouble Happens
- The crossover of image and trademark: merchandise of anime characters and IP roles is usually protected by both copyright and trademark. A "trademark license" alone may not cover the character image copyright, and a copyright license alone may not support trademark registration; when signing, take stock of trademark rights, copyrights, and design patents together and state each one's scope of use.
- Contract manufacturing and outsourcing: contract manufacturers producing extra units on their own after receiving an order, or selling the same products through their own channels, is a high-incidence problem in merchandise categories. Prevention: state production quantities, disposal of leftover stock, and ownership of molds and identifiers in the contract, require that the trademark not be used on goods beyond those agreed, register your trademark in major sales countries, and where necessary intercept excess exports with customs recordation.
6. Routine License Management
- Maintain a license ledger: licensee, license type, territory, term, registration number, and renewal dates;
- Supplement on change: for added goods, extended territory, or adjusted terms, sign supplementary agreements promptly and update the filing;
- Version control of authorization documents: prevent the other party from continuing to operate or file with platforms using expired authorization letters;
- Regular spot checks: check the licensee's product quality and identifier use; on discovering out-of-scope use, send letters promptly and preserve evidence.
The operational requirements for licensing and filing, and platforms' review standards for authorization materials, change from time to time. In actual handling, defer to the license filing requirements published by the CNIPA Trademark Office, the authorization document specifications in platform seller backends, and the latest texts of the Trademark Law and its Implementing Regulation. The rules in this article are current as of 2026.
7. Where to Get It Done
To handle the above matters, you can submit a license filing application through MyTMBee, with a registered trademark agent following up.