A trademark licence agreement is an agreement between the owner of a trademark (the licensor), and another party seeking to utilise the owner’s trademark (the licensee). It is a type of IP licence arrangement, whereby the licensor allows the licensee to use the trademark without relinquishing the licensor’s ownership over the trademarked property. A trademark licence agreement will often subject the licensor to specific conditions, including exclusivity and rights to assign and sub-licence the trademark.
The most common types of commercialisation situations for licences include:
- Franchise arrangements between the franchisor/licensor and franchisee/licensee;
- Company arrangements whereby a spin-off or subsidiary company is created to bring new technologies to market;
- Agreements which allow the use of trademarked property in return for royalty payments
When Do You Need a Trademark Licence Agreement?
For licensors, trademark licence agreements are an appropriate method of protecting intellectual property where there has been a decision to commercialise a product or service. It can also offer licensees a quicker and cheaper way to access new technologies and markets.
Another commercialisation option that is available to the owner of a trademark is an outright assignment. An assignment means that you sell all your rights as the owner of the trademark to another party. The difference between this and licensing arrangements is that the new owner will not be subject to any conditions. In return, the new owner will provide a lump sum payment.
Whether a trademark licence agreement or an assignment is most appropriate depends on your business circumstances. Get in touch with our trademark lawyers who will be able to assist you to make the correct decision.