Trademark licensing is the process by which a registered trademark owner, called a licensor, allows another party, called a licensee, to make and distribute specific products or services under the licensor’s trademark agreement. Trademark licensing is a type of merchandise agreement. The licensor receives a certain amount of money or royalties, a percentage of all sales, in exchange for sharing the trademark. This compensation is also called consideration. Both parties usually agree upon the terms before creating a trademark licensing agreement. To be eligible for legal enforcement, a trademark license agreement doesn’t need to appear in writing. However, legal cases about written trademark license agreements are easier to resolve, less time-consuming, and costly. Legal experts strongly recommend that all trademark licensing agreements get documented in writing and become signed and dated by both the licensor and licensee.
Types of Trade Licenses
- Exclusive License: The licensee gains sole commercial rights to the trademark. The licensor has no commercial rights, but gains a sum of money for entering the agreement. The licensee also receives future profits or incurs losses that come from commercialization. Exclusive licenses may have limits on the products and location.
- Sole license: The licensee and licensor can use the trademark. The licensor cannot license the trademark to a third party.
- Non-exclusive license: The licensee, licensor, and any outside individuals the licensor also assigns a license to can use the trademark.
Reasons to Consider Using Trademark Licensing
- You can expand your business through your partner’s marketing and distribution channels.
- Licensing improves visibility among both brands by giving them a fresh look, putting them on new products and in new channels. As a result, licensing agreements can raise awareness among consumers.
- When you sign a trademark licensing agreement, you gain a professional partner who becomes responsible for quality of goods and services it creates using the trademark.
- Your licensing agreement forges a partnership which can benefit both parties in the long term.
MARKS IP LAW FIRM is well experienced to provide reasoned advice and counsel on trademark-focused transactions. We will guide you through the intellectual property and commercial complexities of trademark licensing to protect your rights and maximize your value. We are of help to negotiate licensing transactions and obtain clearance rights and releases for our clients’ special projects. We effectively advise clients at every stage of the process and are adept at handling all legal and business issues that arise.
MARKS IP Law Firm creates advantages and strategic opportunities at every turn.