It is generally best to consult with a trademark licensing attorney before drafting a trademark license agreement.
A trademark license agreement is a contractual document that the trademark owner can use to grant another person or company the right to use the trademark. Trademarks are exclusive rights, born from intellectual property law, that identify the origin of a good or service. Each country has its own rules about who can receive a trademark and the circumstances under which ownership of the trademark is assigned, but exclusivity is a universal trademark attribute. Owning a brand means owning all the rights to use the brand in a particular market sector. A brand license agreement is a way for the brand owner to grant other parties certain rights to use the brand without transferring ownership.
A trademark license agreement is a contractual document that the trademark owner can use to grant another person or company the right to use the trademark.
Trademark rights are valuable in part because they definitively mark the origin of goods or services. Trademark owners can and often do build their brand reputation around the trademark, so that when consumers encounter the trademark term, they will think of the owner’s products. However, there are times when it makes good business sense to allow other people or select companies to use the trademark in some way. Sometimes this use is in joint marketing or a merger product. Other times it is used for spin-off sales, franchises, or other business expansion.
Most of the time, use of a trademark by someone other than the trademark owner is permitted through a specific trademark license agreement. In the agreement, which usually takes the form of a written agreement, the owner sets forth the licensee’s terms of use. The specifications of what a license agreement must contain to be enforceable vary widely from jurisdiction to jurisdiction. Trademark license agreements are available from many international trade mark agencies and associations, but it is generally best to consult a trademark attorney or trade mark licensing attorney who is familiar with local regulations before writing and trusting. in a trademark license agreement.
Still, some writing tips remain constant. Regardless of where it takes place, a trademark license agreement generally consists of four main parts. First of all, you need to identify the brand. Second, it must name the licensor and licensee, and must specifically state the trademark right or rights to be licensed, including the country or territory in which the trademarks are used. Finally, the agreement must identify what types of goods or services the licensee can offer under the brand and the minimum quality that these offers must represent.
A trademark owner who fails to enforce the quality of a licensee’s offerings can, in many places, put their trademark at risk. All this points to the exclusive nature of the brands. Consumers trust trademarks to indicate a certain amount of known goods or services. Licensees who abuse the brand or place it on low-quality products erode brand value and lower consumer confidence. In many countries, including the United Kingdom and the United States, poor quality control of a registered trademark can lead to its transfer or cancellation.
Trademark license agreements are not required for all uses of someone else’s trademark. Many uses, including comparison ads, are generally considered fair use and permission of the trademark owner is not required. Brand license agreements are generally used in the context of sales or services provided under the brand. In these types of situations, use without a license agreement would normally be trademark infringement.