U.S. TM Application Rights Assignment Guide Key Steps Things to Note

How to Smoothly Transfer U.S. Trademark Usage Rights A Practical Guide and Key Considerations

In international business activities, trademarks have become one of the core assets of a company’s brand, with their value increasingly evident. As Sino-U.S. economic and trade relations deepen, more and more Chinese companies are looking to expand their brands into the global market, including by acquiring or licensing U.S.-registered trademarks through assignment or licensing. However, due to differences in legal systems, language and culture, and market environments, smoothly transferring U.S. trademark usage rights has become a major challenge for many businesses.

According to a recent report by The Wall Street Journal, since 2025, the number of trademark assignment applications received by the United States Patent and Trademark Office USPTO has increased by about 15% year-on-year, with a significant rise in transactions from Asian markets. This trend reflects the growing global demand for cross-border brand asset circulation. At the same time, there have also been multiple disputes caused by unclear transfer procedures or ambiguous ownership, serving as a warning to relevant enterprises.

This article aims to provide a practical roadmap for the key steps and important considerations in transferring U.S. trademark usage rights, helping businesses complete the process legally and efficiently.

1. Understand the Two Main Types of Trademark Transfer

In the U.S., trademark transfers are generally divided into two categories

Assignment Ownership Transfer The current trademark owner transfers all or part of the trademark rights to another party.

Trademark License Usage Permission The trademark owner grants another party the right to use the mark under specific conditions.

While both involve usage rights, they differ significantly in legal nature and consequences. For most Chinese companies, if the goal is to use a U.S. brand without purchasing the entire brand portfolio, signing a trademark license agreement is usually the preferred option. This approach reduces investment risks while allowing the licensee to benefit from the original owner’s brand equity.

2. Conduct Due Diligence to Ensure Clear Ownership

Before signing any assignment or licensing agreement, it is essential to perform comprehensive due diligence on the target trademark. Key steps include

1. Verify Trademark Registration Status Check via the USPTO website whether the trademark is registered and whether there are pending oppositions or cancellation proceedings.

2. Confirm Scope of Rights Understand which goods or services the trademark covers to avoid overstepping its scope.

3. Review Past Assignment Records Check if the trademark has been transferred multiple times and whether there are any potential ownership issues.

4. Assess Third-Party Rights If the trademark has already been licensed to others, confirm whether there are exclusive clauses.

For example, in July 2025, a Chinese e-commerce company attempted to acquire a U.S. apparel brand but failed to discover that the trademark had already been licensed to a third party for use in the North American market. This oversight led to the breakdown of negotiations and significant losses in initial investments.

3. Draft a Clear and Comprehensive Agreement

Whether it’s a license or an assignment, both parties should formalize the terms in a written contract that clearly outlines rights and obligations. A well-drafted agreement typically includes

Scope of Authorization Geographic use, product categories, and duration.

Usage Restrictions Whether sub-licensing is allowed and whether the licensee must follow brand standards.

Quality Control Clauses The trademark owner may require the licensee to maintain product quality to protect brand reputation.

Breach and Dispute Resolution Define breach conditions and resolution methods. Arbitration is often preferred over litigation due to lower costs.

Termination Clause Specify the conditions under which the contract can be terminated and how to handle the trademark post-termination.

It is highly recommended that the contract be drafted or reviewed by a lawyer experienced in U.S. intellectual property law to avoid misunderstandings due to language or legal system differences.

4. File the Assignment with the USPTO

While trademark licenses do not need to be registered with the USPTO, any change in ownership must be officially recorded. Although failure to register does not invalidate the assignment, unrecorded assignments cannot be enforced against a bona fide third party. Therefore, timely registration is strongly advised.

Required documents include

The original or certified copy of the assignment agreement.

Identification documents of both parties.

USPTO forms such as Form TM-10 or TM-10/A.

Applicable fees based on the number of trademarks involved.

The USPTO typically completes the review and updates the official records within a few weeks. Once registered, the assignee becomes the officially recognized owner.

5. Pay Attention to Tax and Compliance Matters

Trademark transfers in the U.S. may also involve federal and state-level tax considerations. For example, some states impose transfer taxes on intangible assets. Additionally, under the Committee on Foreign Investment in the United States CFIUS, certain transactions involving critical technologies or infrastructure may require national security review. While trademarks generally do not fall into this category, caution is advised in certain sectors.

If the trademark is used in advertising or product packaging, compliance with Federal Trade Commission FTC and state consumer protection laws is essential to avoid legal liabilities arising from misleading or false claims.

6. Establish a Long-Term Partnership and Brand Management Mechanism

Trademark assignment or licensing is not a one-time transaction but a strategic component of brand development. Licensees or assignees should establish a systematic brand management framework, including

Regular communication with the trademark owner to align usage strategies.

Monitoring usage to prevent misuse or infringement.

Participating in brand promotion to enhance market recognition.

Adjusting authorization scope or renewal terms based on business growth.

Conclusion

Successfully transferring U.S. trademark usage rights involves more than just legal formalities-it requires strategic planning, risk management, and professional legal support. With thorough preparation, expert guidance, and ongoing brand management, Chinese companies can effectively navigate the U.S. trademark transfer process and lay a solid foundation for international expansion.