Research On The Protection Of Trademark In M&A By Foreign Capital

M&A by foreign capital has become the most important method of foreign direct investment in the world since 90s in 20th century .It is undeniable that M&A by foreign capital played a tremendous role in promoting China's economic development, but we also have to see the negative effects of it, which is particularly conspicuous in the loss of China's enterprises trademark. Therefore, this article analyzed the phenomenon and the reasons of the loss of trademark in M&A by foreign capital from the legal perspective and pointed out the defect of China's enterprises and the legal system in the protection of trademark rights. Based on the above analysis, the author gave the superficial legal countermeasures. On one hand, China's enterprises have to made their own cautious on making foreign M&A agreement .On the other hand, we have to strengthen the legal protection of trademarks in M&A by foreign capital. There are fours parts in this thesis.The first chapter raised the question. Starting with the case of China's well-known trademark "energy 28" has lost in M&A by foreign investors ,this part showed that foreign investors suppresse and marginalize China's own trademarks in the M&A by foreign investors through the process of grab control of the enterprises and the signing of the merger agreement in unreasonable manner. In china , neither the enterprises their own nor the related legislation have paid sufficient attention on the protection of trademark in M&A by foreign investors. The China's enterprise's own immature awareness of trademark protection and the imperfections of relevant legal system of the trademark protection are the fundamental reasons for the loss. How can we attract foreign investment and protect the Chinese enterprises'own trademark rights at the same time has become the problem that China's enterprises and related legislation need to solve urgently.The second chapter describes the meaning of the M&A by foreign investors and its legal nature. M&A by foreign investors is a very complex economic activity, and the legal issues involved in it is very extensive, so accurately define the meaning of the M&A by foreign investors and its legal nature is the base of the disscussion of this paper. Though M&A by foreign investors is Consistent with the requirements of the sale in form, its essence is the property rights transactions between enterprises and foreign investors. The foreign investors hope to acquire the right to get profit in enterprises through the property transactions , so the fundamental nature of M&A by foreign investors is international direct investment. Therefore, M&A by foreign investors in China should not only follow the rules of normal trading relations, but also have to accept the adjustments of the host contory's foreign direct investment in the special legislation and related law.The third chapter analysised the reasons of China's independent trademark lost in M&A by foreign investors in detail. Firstly, foreign investors merger and acquire china's trademarks at Subjective malicious. Foreign investors want to control the trademark rights of the Chinese enterprises through M&A, in order to break into the market that belongs to Chinese enterprises. Secondly, the author discussed the reasons of China's independent trademark lost in the links of M&A agreement is signed and is brought into effect. The main problems in the link of signing the M&A agreement are that: the examination of foreign trademark is not strict,the assessment on Chinese enterprises' trademark is imperfect,signing the unequal agreements on the use of china's trademarks. The main problems in the link of bringing the M&A agreement into effect are that: the foreign investors shelve the original chinese trademark,the foreign investors do not perform their promise on promoting Chinese original trademark. Based on the analysis of these reasons, we found the specific problems of Chinese enterprises and China's M&A legislation in protection of trademark and lay the foundation of finding effective settlements.The fourth part mainly discussed the strengthening and perfecting of chinese trademarks protection in M&A by foreign investors. In this part, I elaborate this problem distinguishing between the enterprise's own protection and related laws on the protection of chinese trademarks protection in M&A by foreign investors. On one hand, China's enterprises have to made their own cautious on making foreign M&A agreement. It is necessary to pay sufficient attention on setting the terms of intellectual property rights in M&A agreement. Chinese enterprises should fix the trademark rights in the form of contract, in order to serve as the basis for the protection of the Chinese trademark. On the other hand, We must strengthen and improve the relevant legal system building. The author outlines her legal advice on perfecting the prior review of the M&A by foreign investors, controling the proportion of the foreign capital investment, improving the assessment system of intangible assets, building intangible property rights trading market, etc. First, it is necessary to improve the system of reviewing M&A by foreign investors, including national economic security review and antitrust review. We can use the system of reviewing M&A by foreign investors to suppress the M&A behavior that will form monopoly through M&A the Chinese trademark. Secondly, we should strengthen the legislation on assessment of intangible assets, establish a scientific assessment method, strengthen the supervision of the legal assessment of the state-owned assets, etc. Only when the improved system of intangible assets assessment is established, we can ensure the value of the Chinese trademarks have an accurate and reasonable pricing. Thirdly, improving intangible property rights trading market, in order to guarantee the disposal of trademarks and other intangible in highly efficient and rational. The fourth point, we should hold the criminal responsibility to the person who take the primarily responsible for the loss of state-owned enterprises trademark, according to the relevant provisions of the Penal Code. This method will play the role of punishment and prevention. The fifth, our legislation should control the proportion of the foreign capital in M&A more elaborate, connecting with our relevant industrial policies. Meanwhile, the procedural provisions about increase of shares should also be taken into care account. The last point, but not the least one, our legislation should allow the trademark transfer may revoke. If the rights and obligations of trademark are in the extreme imbalance between Chinese enterprises and foreign investors, the contract of trademark transfer will be revoked.