The Ownership Of The Interests Increased During Trademark Licensing

Trademark licensing has been widely accepted as a major part of the trademarksystem in most countries around the globe. In China, the PRC Trademark Law(referred to as Trademark Law thereafter) also provides articles and clausesconcerning trademark licensing, which stipulates only the rights and obligations ofthe licensor and licensee in guaranteeing products quality, identifying productssources, and filing with relevant authorities. Amidst a developing society andeconomy, new cases in trademark licensing have posed challenges to equitability ofthe current law.In practice, licensed trademarks normally have gained some fame and alltrademark publicity in the duration of licensing is conducted by the trademark owner,which means the licensee needn’t invest too much in trademark marketing but makeprofits through products sales by availing itself of the trademark owner’s publicity.However, with the economic activities getting diverse, there are rule violations intrademark licensing. And this is manifested in the Wanglaoji case. Wanglaoji, alicensed trademark, rose to a nationally well-known trademark worth hundreds ofbillions of yuan from a little-known trademark during its licensing. Its dramaticincrease in brand value is attributed completely to the licensee’s marketing strategiesand enormous investment. Under such circumstances, as the current law stipulates,when the licensing is over, the trademark owner could take back the right of use andthe licensee is not allowed to ask for any returns. Is it fair? To which party should theinterests increased in the licensing period belong? How to protect the labor andcontribution the licensee has made in trademark marketing? Need the currenttrademark licensing system be changed? These questions have sparked hotdiscussions in the academic circle.The paper adopts research methods such as case analysis, comparing researchand theoretical research. First, it starts with actual cases, analyzing and summarizingthe core legal issues reflected in the cases through collecting relevant news reports. It further explores theoretical understandings and possible system designs in regards ofdividing interests increased in the licensing period. Secondly, it sums up differentviews the academic circle holds and their theoretical foundations by comparingrelevant materials. Lastly, it uses the trademark system and systems and theoriesrelating to civil laws applicable to this case, analyzes and comments on the differentviews the academic circle holds, and puts forward solutions the author deemsreasonable.The paper will start with the Wanglaoji case which attracts wide attention,analyzing and proving issues on how to define the interests increased in the licensingperiod, whether it needs legal protection, and how to protect it, from the perspectiveof trademarks and goodwill value. The author believes the interests increased in thelicensing period refers to the growth in licensed trademark value and other profitsrelated to the trademark, resulting from operations in the licensing period. Theinterests increased in the licensing period fall in the range of civil legal interests andare to be protected by law. From a macroscopic view, this kind of interest has twoparts, namely, value added to the trademark itself and to the goodwill. And these twoparts should be distinguished by the different bases the trademark value andgoodwill value are formed respectively. From the angle of finding solutions,privatautonomie and obligations after contracted period should be considered inorder to strike balance between parties of trademark licensing and social publicinterests.