As a unique property, a trademark can be assigned from one to another. In China, both registered trademarks and pending applications are transferable, but there are formalities and tips that you should know before handling trademark assignment matter in China.

According to article 42 of the Trademark Law of China, where a registered trademark is assigned, the assignor and the assignee shall enter into an assignment agreement and jointly file a trademark assignment application with the Trademark Office. The assignee shall guarantee the quality of goods on which the registered trademark is used.

Generally, the trademark assignment shall be recorded with the Trademark Office as requested. The Trademark Office will conduct an examination for the request. Once the requirements are met, the assignment will be approved and published. The assignee shall have the right to exclusively use the registered trademark from the date of publication or become the owner of a pending trademark application and shall have corresponded rights of the trademark.

Grounds for rejection of trademark assignment
Since the Trademark Office will substantively examine during the procedure, the request of a trademark assignment is not only an act of recordation but also a genuine approval process, which means the assignment is possible to be rejected if it does not conform with the relevant provisions.

A trademark assignment can be rejected based on one of the two grounds as follows: (i) not all of the assignor’s identical or similar trademarks designating on identical or similar goods or services are being assigned simultaneously; and (ii) the trademark assignment may cause confusion or other adverse impacts.

For the first ground, it actually aims to avoid the possibility of confusion or mistaken recognition due to the incomplete trademark assignment. If an applicant owns more than one trademark but only wishes to transfer one of them, the assignment shall still cover all of the identical or similar trademarks, or else the application will be rejected. And the assignee is better to have an appropriate search to reduce risks before reaching the agreement.

The second ground has a similar purpose to the first one and also restricts the trademark assignments with potential adverse impact, which probably comes with a bad faith trademark application or registration.

Trademark assignment involves bad faith registration
To remove the obstacle for their application or directly obtain a trademark registration, some trademark applicants may choose to purchase a prior similar trademark and assign it to themselves from the owner. But some trademarks might be filed with bad faith, especially the owner has registered a large number of trademarks and is suspected of hoarded registrations, and one of the purposes for trademark hoard by a malicious applicant is to profit from trademark assignment.

According to paragraph 3 of article 42 of Trademark Law of China, where any assignment may easily cause confusion or have any other adverse effect, the Trademark Office shall disapprove it and notify the applicant of disapproval in written form with an explanation of reasons.

When receiving an application for trademark assignment, the Trademark Office may investigate the situation about the assignor, including the number of applications or registrations he holds, the similarity of the trademark, and other circumstances of bad faith. The approval of the assignment of a malicious registration means the assignor successfully profits from the trademark registered illegally, which will have an adverse impact on society and also infringe the rights of the assignee. In this regard, the Trademark Office will reject the assignment based on the second grounds mentioned above that the possibility of the adverse impact of the trademark assignment. The Trademark Office will issue a Notification of Rectification to the applicants and ask for evidence of trademark use or intention of use within 30 days from receiving the notification. Otherwise, the application of trademark assignment will be refused. If the applicant is innocent, he may provide the required evidence and state the genuine use or intention with the Trademark Office. The decision will be made in around three months after the Trademark Office receiving the materials.

As an assignee, the applicant of trademark assignment should be on guard against a malicious assignor to avoid economic losses. Additionally, the assignee should pay attention to the status of the assigned trademark. Is it registered or pending? Or it’s under another examination procedure where the subsequent owner will bear extra responsibilities. If the assigned trademark has been registered and there’s no other ongoing process, the assignee should look out for the expiration date and renew the trademark in time.

Sometimes, trademark assignment may be a more convenient way than filing a new application. It’s important that handle the assignment appropriately and pay attention to the above issues. Last but not least, seeking professional opinions from a trademark attorney is always the best choice when countering any questions about trademark assignment.