Will Kuaibo Make a Comeback? Trademark Sold for 9.5 Million Yuan! Can the Original Holder Continue to Use It After the Auction?
Compiled from: 21st Century Business Herald, China Trademark Registration Network, Mei Xian Intellectual Property Media, Baidu Baike
On the afternoon of April 14, reporters learned from the Alibaba auction platform that a batch of trademarks and some patents under the name of Shenzhen Kuaibo Technology Co., Ltd. had completed bankruptcy auctions. Among them, Kuaibo’s trademarks were finally sold for 9.5 million yuan, while some of Kuaibo’s patents were sold for 134,900 yuan.
It is reported that a total of 234 trademarks of Kuaibo were auctioned this time, among which 17 are in the status of “invalid”, 24 are in the status of “awaiting substantive examination”, 5 are duplicates, and 188 are within the term of exclusive rights.
Among the trademarks that remain valid are mainly “Kuaibo” “KUAIBO” “QVOD” “QMV” “Kuaibo Cloud” and others. Kuaibo Company was established on December 26, 2007. Its “Kuaibo” video player was once the product with the largest market share and accumulated a large number of users. As a result, the “Kuaibo” brand also became widely known.
Eighteen bidders engaged in 292 delayed rounds of bidding, driving the "Kuaibo" trademark from 40,000 yuan to 9.5 million yuan.
In a one-day auction, the starting bid for Kuaibo's trademark was 45,110 yuan. According to information from the Alibaba auction platform, the auction attracted 10,973 views.
The reporter noted that the bidding process for the item was highly competitive, with 18 people registered to participate. The auction began at 10 a.m. on April 13, and within 7 seconds, someone placed a bid of 45,110 yuan. The competition was fierce, and by the scheduled end time of 10 a.m. on April 14, the auction had still not concluded, continuing with extended bidding thereafter.
The final bidding battle unfolded between two buyers with bidder numbers “X2977” and “C7449”. After the bid price reached 7 million yuan, only these two buyers continued to outbid each other. Ultimately, at 13:53:58 on April 14, the buyer with number X2977 won the bid at 9,500,610 yuan.
The entire auction saw 402 bids and 292 extensions. The final transaction price of the Kuaibo item was 9,500,610 yuan, 210 times the starting price.
Industry insiders pointed out that the reason the transaction price was so high is mainly because the client did not provide cost composition information for the trademark. The appraisal price was determined using the cost approach. This appraisal only considered the trademark agency registration fee as the replacement value and did not take into account design fees. The replacement value of the trademark was determined to be 1,000 yuan. In addition, the remaining valid period of the trademark was determined. Based on the asset conditions, the quick realization discount rate for the asset was determined to be 30%. The final market value = the full replacement cost of the trademark x the proportion of remaining valid years, while the liquidation value = market value x (1 - quick realization discount rate). The appraisal price was determined in this way.
As a once-popular home entertainment tool, "Kuaibo" still has an attractive trademark. The reason for the prolonged auction is partly due to the low starting price and small bid increments, with a minimum increment of 500 yuan. This led to buyers placing bids of 200,000 or 500,000 yuan in the final stages to avoid a protracted battle.
In sharp contrast to the fierce bidding for the trademarks, some of Kuaibo's patents appeared to attract little interest. Among the Kuaibo patents auctioned this time, 54 were in a state where annual fees had not been paid for the remaining valid term. The starting bid was 133,490 yuan, but ultimately only 2 people registered, and the deal was concluded at 134,990 yuan after just one bid increment.
'The King of Video Players' Bankruptcy Liquidation
According to information from Alibaba Auction, the auction of QVOD's assets was due to the administrator executing the company's bankruptcy liquidation case.
In July 2014, the People's Court of Nanshan District, Shenzhen (hereinafter referred to as the Nanshan District Court) issued a civil mediation statement, confirming that Kuaibo owed Shenzhen Jinyatai Technology Co., Ltd. (hereinafter referred to as Jinyatai) RMB 9,737,700 in payment for goods and RMB 300,000 in interest for overdue payment. Subsequently, Jinyatai applied to the Nanshan District Court for enforcement.
In October of that year, the Nanshan District Court issued a ruling to suspend enforcement of the case on the grounds that all bank accounts under Kuaibo's name had been frozen by other authorities in accordance with the law and that there was currently no property available for enforcement. The creditor's rights claimed by Jinyatai have remained unsatisfied to this day.
In August 2018, Jinyatai filed a bankruptcy liquidation petition against Kuaibo. In response, the Shenzhen Intermediate People's Court held that Kuaibo was unable to repay its due debts and was obviously insolvent, and ruled to accept Jinyatai's bankruptcy liquidation petition against Kuaibo.
On December 29, 2019, the People's Court Announcement Network disclosed that the creditors' meeting of Kuaibo had approved the First Bankruptcy Property Distribution Plan by written vote. The total bankruptcy property available for distribution in the Kuaibo case was approximately 123 million yuan, with bankruptcy expenses and community debts that should be paid in priority and reserved amounting to 7.9837 million yuan. The total bankruptcy claims participating in the distribution and deposited amounted to 148 million yuan. The repayment ratio for employee claims and tax claims was 100%, while the repayment ratio for ordinary claims was 76.4772%. For estimated claims, the administrator deposited the shares to be received in accordance with the law.
What is a trademark? What is the difference between a trademark and what is commonly referred to as a logo?
A trademark is a mark used to distinguish the brand or service of one operator from the goods or services of another operator.
According to Article 8 of the Trademark Law of the People's Republic of China, any sign that can distinguish the goods of a natural person, legal person, or other organization from those of others, including words, graphics, letters, numbers, three-dimensional marks, color combinations, sounds, and combinations of the above elements, may be applied for registration as a trademark.
Legal Differences Between Logos and Trademarks:
A logo can be a trademark, and likewise, a trademark can serve as a logo. However, a logo is not necessarily a trademark, and a trademark does not necessarily function as a logo.
(1) Different acquisition of rights. A logo, as a work of fine art, does not require registration; copyright is automatically obtained upon completion of creation. In contrast, a trademark must be registered with the relevant state authority before trademark rights can be acquired.
(2) Differences in ownership. The designer and the owner of a logo are very likely not the same person. Ordinary companies usually commission a designer to design a logo. In that case, the logo is a commissioned work, and the ownership of its copyright falls into one of two scenarios: it is agreed to belong to the commissioning party, or, absent such an agreement, it belongs to the designer. A trademark, by contrast, belongs only to the trademark owner. This falls within the scope of intellectual property.
(3) Different laws provide protection. A logo is protected under the Copyright Law, while a trademark is protected under the Trademark Law. A logo can be registered as a trademark, in which case the trademark logo is protected under both the Copyright Law and the Trademark Law.
What is a trademark auction? Why can trademarks be auctioned?
A trademark auction is one of the ways to transfer trademarks. In essence, a trademark auction involves auctioning trademark rights. Since trademark rights are a type of property right, they can be separated from the rights holder and transferred for value, becoming the subject of a transaction.
According to Article 6 of the Auction Law of the People's Republic of China: “The subject matter of an auction shall be articles or property rights owned by the client or that the client is entitled to dispose of in accordance with the law.”
The Trademark Law of China stipulates: A trademark approved and registered by the Trademark Office is a registered trademark, and the trademark registrant enjoys the exclusive right to use the registered trademark. Exclusive rights include: the right to use, the right to license, the right to exclusivity, the right to prohibit, the right to invest, the right to transfer, and the right to inherit.
As an intangible asset, a trademark can be disposed of by the trademark owner according to law, and thus it can be auctioned as a subject matter.
After a trademark auction, the entity that acquires the auctioned trademark rights must assume the obligation to ensure the quality of the goods or services using the registered trademark, in order to maintain the trademark's reputation and protect consumer interests. Once a trademark is approved, it has legal effect, and its scope of protection is determined accordingly. The entity that obtains the trademark rights through auction may not arbitrarily change the design of the trademark or its scope of use. If changes to registered trademark matters are necessary, the modification procedures must be carried out in accordance with the provisions of the Trademark Law.
Can the original holder continue to use the trademark after a successful auction?
After a successful trademark auction, the buyer generally needs to hold the court's enforcement assistance notice to go through the transfer procedures at the Trademark Office. Once the transfer of the registered trademark is completed, it means that the original trademark holder has transferred the exclusive right to use the trademark to the transferee, and the original trademark holder no longer has the exclusive right to use the trademark.
After the trademark transfer is completed, the transferee becomes the new owner of the trademark. If the original trademark registrant still needs to use the original trademark for goods or services, they can negotiate and sign a licensing agreement with the transferee, thereby achieving continued use through licensing.
If the original trademark registrant continues to use the trademark on goods, packaging, containers, or transaction documents without authorization, or uses the trademark in advertising, exhibitions, or other commercial activities, this will constitute trademark infringement.
The transfer of a registered trademark not only results in the transfer of trademark rights between the transferor and the transferee but also directly affects the consumer base of the original trademark holder and the interests of trademark licensees. This highlights the role of the transfer agreement signed during the trademark transfer, which ensures the legality of the transfer and protects the interests of trademark stakeholders and consumers. Additionally, from a market perspective, a trademark can be traded as a special commodity. As long as it can be traded, it generates value, which is similar to other goods for sale. The trademark holder can freely transfer the trademark within the scope permitted by law, based on their own needs and intentions.
[1] Transferring a trademark means that the subject of the registered trademark changes, and after the transfer is completed, the original holder no longer enjoys exclusive rights, usage rights, licensing rights, etc., and these trademark rights are exclusively held by the assignee.
[2] In summary, the final conclusion is that after a trademark is transferred, the original trademark holder cannot use it again without the permission of the new trademark owner.
Note: Image source from the internet
