How to Judge the Validity of Trademark Transfer without Inner Approval of the Company in China

(By Albert Chen) Abstract:

When a company’s trademark agent transfers a trademark without approval, a judgement of the validity of said transfer requires not only a consideration of the company approval, but also a determination of the third party good faith in the transfer. When a condition is not fulfilled the transfer will invariably be considered invalid.

Case Introduction:

In 2001, Leidi (China) Co., Ltd. (“Company L”) was granted the exclusive right in the use of the trademark “雷迪” (read as “Leidi” in Chinese). In November of 2002, Wu, as the executive director of Leidi China, transferred the trademark to the Hua Qu Duo Investment Company (“Company H”). The State Trademark Office made an announcement regarding the transfer in October 2003. Subsequently, Company H licensed the trademark to the Shanghai-based Leidi Mechanics Co., Ltd. (“Company S,” which had no affiliation with Company L).

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How to Judge the Validity of Trademark Transfer without Inner Approval of the Company in China

Abstract:

(By Albert Chen) When a company’s trademark agent transfers a trademark without approval, a judgment of the validity of said transfer requires not only a consideration of the presence (or lack of) company approval, but also a determination of whether there was good faith when considering the third party in the transfer. When it can be shown that no inner-company approval was made, and that the transaction was not undertaken in good faith, such a transfer will invariably be considered invalid.

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