TRADEMARK LICENSING

A Trademark licensing is a mechanism where the Trade owner (Licensor) grants permission to a Third

Party (Licensee) to use the invention (Trademark) on mutually agreed terms and conditions.

THERE ARE DIFFERNET TYPES OF TRADEMARK LICENSING

  1. FRANCHISING: this is a type of licensing where the franchisor (trademark owner) licensee the invention to the franchisee (third party) to use the invention for the business purpose, in return for a fee. The license is followed by a bundle of IP rights.

For example: the pizza corner Pizza Hut

  1. BRAND EXTENSION: it is a process where a company gets in touch with the owner of the Trademark or its agent; in order to expand its business earning the monopoly right, through a legitimate license agreement.

For example: Monaco Coach entered into a license agreement with Dodge, in order to use Dodge Trademark and logo, in the manufacture of luxury recreational vehicles.

  1. COMPONENT OR INGREDIENT BRANDING: the owner may license the component or an ingredient of the Trademark, thus attracting the consumer toward the product of the licensee.

For example: Diet soft drinks with Nutra Sweet.

  1. CO-BRANDING:  number of companies joining together in order to make a new product, contributing the best of their products or inventions.

For e.g.: production of Lexus car under the interest of Toyota and Coach.

BENEFITS OF A TRADEMARK LICENSE:

  1. Creating way to additional revenue
  2. Territorial expansion or Brand Expansion.
  3. Strategic partnership for enjoying the monopoly right.
  4. Enjoying the benefit of the Trademark without inventing it.
  5. Increasing goodwill
  6. Increase consumer recognition.

TRADEMARK LICENSING AGREEMENT- CONTENT:

  1. TITLE OF THE AGREEMENT- containing the subject matter the agreement.
  2. EFFECTIVE DATE- stating the date when the license along with the terms and conditions comes into effect.
  3. DESCRIPTION OF THE PARTIES- describing the type of business, legal or registered name, address etc.
  4. PREAMBLE- Background or history between the parties leading to such agreement.
  5. TERRITORY- the territorial boundary that is the countries or markets the trademark can be used.
  6. TERMS AND DURATION- clauses and terms, against which the license shall be granted. It shall also include the responsibility of both the parties.
  7. RESERVATION OF RIGHTS: the owner has the right to reserve particular IP right in context of Trademark. For future licensing opportunity.
  8. SUB-LICENSE- the licensor may mention in the agreement whether he gives the prescribed right of sub-licensing the invention for the licensee
  9. PAYMENT AND ROYALTIES- the amount that shall be paid to the licensor for using the right of the owner. It shall also describe the manner in which the payment shall be done.
  10. TERMINATION: the conditions under which the license may get terminated.
  11. PENALTY: it shall also include the penalty that the licensee has to pay in case of any waiver or infringement.