This article is compiled by Zhu Jingxiu from the Trademark Process and Information Department of ScienBiziP

With the increasing development of cross-border e-commerce, people’s awareness of brand protection is gradually increasing. Having an effective and user-friendly trademark is crucial for sellers who are expanding into the US market. However, trademark registration in the United States takes a long time, and in the fiercely competitive market, many cross-border sellers tend to directly purchase a US trademark for use.

Regarding this, ScienBiziP reminds you to be cautious when purchasing US trademarks

Internet trademark auction provides a virtual market for people to sell registered trademarks around the world. Many auction websites attempt to sell US registered trademarks. Although some of these websites may be legitimate, some may sell invalid registered trademarks. The USPTO (United States Patent and Trademark Office) declares that there is no association with these online auctions.

A registered trademark may be invalid for various reasons. If you purchase an invalid registered trademark, you will not be able to obtain any actual rights to that trademark.

Goodwill refers to consumers’ recognition of companies, products, or services related to a trademark. Trademark registration itself has no inherent value unless the trademark is recognized by consumers in the commercialization of specified goods or services. Therefore, the value of a trademark is closely related to its associated goodwill.

The transfer of a registered trademark and all its rights in the United States must be sold together with its associated goodwill. This requirement ensures that the goods or services provided by the buyer are of similar quality to those provided by the prior trademark holder, which helps protect consumers from potential deception.

If you are interested in purchasing a registered trademark in the United States, please consider: Is there any actual goodwill that can be transferred? And did the transaction transfer the goodwill of the trademark to you?

If you purchase an invalid registered trademark, even if there is related goodwill, you may not be able to enjoy any protection of the registered trademark. This is because regardless of whether you are aware of the defects of the registered trademark in the transaction, the transfer of the trademark will not change the fact that the trademark is invalid. For example:

The buyer may face litigation due to doubts about the legality of the registered trademark purchased, including if the applicant (seller and original rights holder) intentionally submits a declaration document containing false signatures when submitting the trademark application for registration, declaring that the trademark is intended for commercial use or has been used in the goods or services listed in the application.

For example, the trademark applicant has only submitted an application for reselling the registered trademark on an auction website and has never actually used the trademark in commerce. You have purchased the trademark for sale, and even if you did not participate in the trademark registration process and are unaware of any improper behavior, a third party can file an invalidation, unilateral deletion, or unilateral review application against the trademark you purchased at USPTO, or file a lawsuit with the court to request the cancellation of the registered trademark.

If there is evidence that the application or registration violates US trademark laws or USPTO regulations, the application or registration may face administrative sanctions. Administrative sanctions can terminate any application or invalidate any registration involved in the case.

For example, you want to register your small e-commerce brand on a large e-commerce platform. But due to the slow process of applying for trademark registration yourself, you have decided to take a faster approach by purchasing a registered trademark. If the traded trademark was initially obtained through fraud or violation of USPTO regulations, the trademark may or has already been declared invalid in an administrative sanction order. If so, the registration of the trademark is essentially invalid and cannot be used for brand registration on e-commerce platforms.

Just as registering a trademark is a legal process, purchasing a registered trademark is no exception. USPTO recommends consulting a trademark lawyer before purchasing a registered trademark on a trademark auction website. A qualified trademark lawyer can help you determine the validity of a trademark, evaluate its protectibility, provide advice on the necessary conditions for legal trademark transfer, registration, and related goodwill, and assist you in handling necessary transaction processes.

Regarding issues and precautions related to US trademarks, please feel free to contact ScienBiziP for further information. The consultation hotline is 0755-29270808.

*Official website link: https://www.uspto.gov/trademarks/protect/caution-online-auctions (Click on [Read Original Text] to view)