Recordal of a trademark license refers to the procedure by which a trademark registrant (the licensor), after licensing another party to use its registered trademark, reports the license to the CNIPA for recordal and publication by the CNIPA in accordance with the law. The legal basis is Article 43(3) of the Trademark Law.
Legal Basis and Nature
Article 43 of the Trademark Law provides: the licensor shall supervise the quality of the goods on which the licensee uses its registered trademark; the licensee shall guarantee the quality of the goods on which the registered trademark is used; a party licensed to use another's registered trademark must indicate the licensee's name and the origin of the goods on the goods bearing that registered trademark; where a licensor licenses another party to use its registered trademark, the licensor shall record the trademark license with the CNIPA, which shall publish it. A trademark license that has not been recorded may not be enforced against a good-faith third party.
Recordal is in nature a means of publicity, not a condition of effectiveness: the license contract takes effect upon signature by both parties, and remains valid without recordal, but the licensee cannot enforce it against an unaware good-faith third party.
Three Major Risks of Not Recording
- No enforcement against good-faith third parties: when the trademark is licensed again or assigned, the unrecorded licensee cannot assert the earlier license against a good-faith successor and may lose the right to use;
- Disputed standing: in infringement litigation, an exclusive licensee may sue on its own and a sole licensee may sue jointly with the registrant, but where the license is unrecorded, the other side often defends on the ground that the license relationship is unclear;
- Obstacle in non-use cancellation proof: when defending a non-use cancellation with the licensee's evidence of use, the recordal is the most direct and forceful official record of the license relationship.
The Three Types of Licenses
- Exclusive license: only the licensee may use the mark; even the licensor itself may not;
- Sole license: the licensor and the licensee may use it, and no further third party may be licensed;
- Ordinary license: multiple parties may be licensed at the same time.
The license type should be specified at recordal; licensees' standing and rights stability differ greatly across types.
Recordal Practice
- The application is filed by the licensor and may be entrusted to a trademark agency;
- Materials include the recordal application and a copy of the license contract or a statement of its main terms;
- The license term may not exceed the validity period of the registered trademark;
- If the license is terminated early or its scope changes, a recordal change or cancellation should be filed.
Recommendations
Advance contract signing and recordal in parallel; the licensee should proactively demand recordal and keep the publication record; after a trademark renewal or assignment, check the validity of the existing recordal.
The practical judgment behind this concept needs to be combined with individual cases; before acting, you can book a targeted analysis with a registered agency at MyTMBee.