Benefits of Working With a Lawyer to Licence Your Trade Mark
Trade mark licensing is a great way to open up an additional stream of income for your business. Trade mark licensing refers to the agreement made by a trade mark owner (a licensor) to allow another person (a licensee) to use their trade mark over a specific period of time, often for a fee. It is important that you use a trade mark licensing agreement to ensure the licensee only uses your intellectual property in line with your demands. To ensure that your licensing agreement properly reflects your interests as a trade mark owner, you should consider working with a lawyer who can help you licence your trade mark and draft such an agreement.
Why Use a Trade Mark Licence Agreement?
As a registered trade mark owner, you want to ensure that your intellectual property is not susceptible to misuse. To help establish a licensing arrangement, a written licence agreement can help clearly identify the rights and obligations of both the licensor and the licensee.
A licence agreement specifies the terms of the licensee’s use of your trade mark. It determines what the licensee can and cannot do with your trade mark during the licensing period.
However, drafting your rights and obligations under the agreement can be a complex process. For this reason, it would be beneficial to work with a lawyer for the following reasons.
1. Understanding Licensing Rights
There are three main categories of licensing rights, which all suit different business arrangements. Generally, these categories include:
- non-exclusive rights, which allow multiple parties to use your trade mark throughout the licensing period;
- exclusive rights, which means that only the licensee can use your trade mark throughout the licensing period; and
- sole rights, which include a combination of both non-exclusive and exclusive rights tailored to your specific preferences.
Whilst these categories of rights seem rigid, a lawyer can help tailor your business arrangement to suit any of the three categories. They can advise you on the potential benefits and disadvantages of either category and ultimately help you arrive at a decision that best reflects your preferences for the agreement.
2. Establishing the Terms of Your Agreement
In a licensing agreement, you are free to bind the licensee to any terms you both agree to subject to any qualifications under the Trade Marks Act. Since there is a wide range of often necessary terms that you should include in the agreement, you can largely benefit from working with a lawyer. A lawyer with expertise in trade mark law can advise you on what terms are necessary to give effect to your desired preferences for the arrangement.
Of the many terms that you can include in your agreement, a lawyer can help you tailor the following terms to your agreement by determining:
- the licensing period in which the licensee can use your trade mark;
- how the licensee can use your trade mark (i.e. only in relation to one product but not another);
- where the licensee can use your trade mark in terms of a geographic region;
- any quality control mechanisms you wish to include to ensure that you have some say in how your trade mark is being continuously used; and
- royalty fees you might reap as a result of any sales made by the licensee during the licensing period.
As a trade mark owner, it is important that you have certainty in the arrangements you enter. Any misuse of your trade mark can negatively affect your business’ reputation. For this reason, it is important that you seek a lawyer’s advice to ensure that your trade mark licensing goes as planned.
3. Enforcing the Agreement
Whilst a licensing agreement can help clarify both parties’ rights and obligations under the agreement, there is nevertheless a risk that the agreement will be breached. Of course, a breach can put both you and the licensee in a precarious position. Therefore, you must be aware of what legal avenues you can pursue in the instance where a breach arises.
Ultimately, a lawyer can advise you on what remedies you can pursue if your business has suffered a loss as a result of the breach of the agreement. They can also advise you on what remedies are available under trade mark law and whether it is worth pursuing a claim for the breach.
When thinking about licensing your trade mark, a lawyer can help you:
- decide which rights you should grant your licensee;
- draft and execute the terms of your licensing agreement to suit your preferences; and
- enforce your rights in the instance where the licensee has breached the agreement.
Frequently Asked Questions
This depends on the contents of your standard trade mark application. Since trade marks are registered in connection with goods and services, your application must specify which class of goods and services you wish your trade mark to protect. As a result, trade mark registration using a standard application will cost $250 per class of goods and services included.
Under the Trade Marks Act, a registered trade mark enjoys 10 years of protection from the date IP Australia approved your application.