Holding out for high prices, most trademark owners are declining offers, bringing transactions at the new Quanzhou Trademark Trade Center in coastal Fujian province to a virtual standstill.

Founded last October, the center has more than 5,000 trademarks for sale, but "only 30 deals have been completed, despite the fact that many people have shown interest", said a representative of the trade center.

Ge Yongli, general manager of the Fujian Asia-Pacific Intellectual Property Organization, said the main bottleneck is owners overvaluing their trademarks.

"If the owner spends 1,000 yuan ($152) registering a trademark, then a sale for 10,000 yuan is acceptable - but the fact is that many of the trademark holders have set prices of up to 1 million yuan, which is unrealistic," Quanzhou Evening News quoted Ge saying.

"They quote high prices not because their trademarks have such great value but due to a strong resemblance to some international renowned trademarks," she noted.

Such derivative works "might draw much attention in the beginning, but with increasing awareness of intellectual property protection, they will not have good prospects because of possible risks from infringement", she said.

Some owners also raise prices in an attempt to use their trademarks as collateral for big bank loans.

"Banks will not lend money on the purported value of a trademark," said an industry insider. "Banks give credit according to many factors, and tangible assets are the most important - trademarks are an intangible asset."

Ge suggested companies could license their idle trademarks to smaller firms instead of outright sale.

"It is common to apply for trademark-collateralized loans, but another approach (to generate revenues) is licensing."

"Small companies may grow faster relying on the reputation of existing trademarks, while the proprietors can get revenues in return," she said.

Ge cited the tea industry as an example. Large companies could authorize their brands to tea set production operations. The cooperation could boost both sides, as branded tea sets can be sold in brand outlets and large shopping malls.

Only those that have secured the status of well-known trademarks nationwide or famous brands provincially have potential to license their business, according to the general manager.

The city of Quanzhou has 700 such trademarks with the potential for licensing, she said.

China Daily

(China Daily 03/16/2011 page17)