|BUSINESS METHODS AND LEGAL MATTERS
|Use of the Brand Name
Banking and Transfer of Money
BUSINESS METHODS AND LEGAL MATTERS
Use of the Brand Name
The term “brand name” is refers to a trademark. In the following, the owner of the brand name is referred to as the “trademark owner.”
The brand name can be used in two ways. First, it can be used directly by the trademark owner (for example, a Chinese company). This is for products sold directly to retailers in any country.
Second, the brand name can also be licensed by the trademark owner (for example, a Chinese company) to any other companies, anywhere in the world. This would let the trademark owner license the brand name to a US company, for example, which in turn would sell products directly to retailers.
The US company in the above example would have a written agreement with the trademark owner. This agreement would cover the sales of product, and where the product will be made. For example, the trademark owner will probably prefer to make the product itself (for example, in China). In some cases (for example due to customs duties or other import costs) the trademark owner might prefer to have the product made in another country (for example, in the US).
The brand name therefore has great value to the trademark owner, even when the trademark owner does not manufacture the products.
A Chinese company can own a US trademark, and it can also own a US patent or US copyright.
A license is an agreement for permission to use a trademark or brand name. This agreement is between a trademark owner (for example, a Chinese company) and any other company. In its simplest form, the license agreement gives permission to use the brand name, and does not require payment of money.
One kind of license agreement is to promote sales in the US of the products made by the trademark owner. Here, a business located in the US will make a license agreement with a trademark owner which allows the business to promote and sell the product made by the trademark owner. In this example, the trademark owner is a non-US company (for example, a Chinese company) which owns a US trademark. In this example, the license agreement would require the business located in the US to keep only a small percentage of the money received from the sales, and give most of the money to the trademark owner.
In the above example, the business located in the US could be a small one. It could be paid as a consultant, for example, or it could have more authority, depending on the license agreement.
Banking and Transfer of Money
In the above examples, money is earned by sales of products which use the brand name. In those examples, most or all of that money must be transferred to the trademark owner.
If the trademark owner is located in China, for example, that transfer of money is done in exactly the same way that manufacturers in China are paid now. There is no difference.
If it is legal for a Chinese company to own a US business, then it is possible for the money to be placed in a US account of a US business which is owned by the Chinese company.
If the issues of ownership or transfer of money are more complex, depending on the nature of the business or changes in laws, then legal professionals may be needed to help. In such cases, we would be happy to assist in the selection of legal professionals.