How to Get a Trade Mark Licence for a Product
One of the key benefits of trade mark registration is the exclusive rights to commercialise your trade mark. This includes licensing your trade mark. Licensing a trade mark refers to the process of a trade mark owner giving someone permission to use their trade mark within certain limitations. Typically, this is in exchange for payment. If you are looking to get a trade mark licence for a product, this article will take you through some of the ways you can get a trade mark licence, and some of the things you should consider when obtaining a trade mark licence.
Obtain Licensing Information
The holder of a trademark (the licensor) has the power to grant trade mark licences to others (the licensee). It is also at the licensor’s discretion as to the extent of the licensing agreement. There are three types of licensing agreements that you may agree on. The table below outlines the three different types of licensing agreements:
|Exclusive||An exclusive licensing agreement means that the licensee will be the only party allowed to use the trade mark. An exclusive licensing agreement even excludes the licensor from using the trade mark.|
|Non-exclusive||A non-exclusive licensing agreement means the licensor can use the trade mark in the designated territory and grant any additional licences in the same location.|
|Sole||A sole licensing agreement allows the licensor to use the trade marks simultaneously as the licensee in the same area. However, the licensor will not be able to grant any licences to third parties in the same area.|
For businesses that frequently grant trade mark licences, there may be published information on the type of licences available online. For other businesses, you will need to contact them directly.
You should consider that given the value of trade marks, certain businesses will not be willing to negotiate on the type of licence that they will grant a licensee or may not be willing to grant a trade mark licence at all. Regardless, it is important to consider what type of licensing agreement will suit your needs before you begin to negotiate.
Negotiate an Agreement
If the trade mark for a product that you wish to licence does not already have a licensing agreement in place for licensees, you will need to negotiate an agreement. You can do this by either contacting the trade mark owner directly, or contacting them through an intellectual property (IP) lawyer.
Before attempting to negotiate a trade mark agreement, you should consider that payment for licences is typically in the form of either an ongoing licensing fee or royalties. Because of this, it is a good idea to consider in advance how much you would be willing to pay for a licensing agreement.
Before attempting to negotiate a trade mark agreement, you should also consider how you intend to use the trade mark licence. A trade mark is an important aspect of a business’ brand, so they will likely want to check that you will use their trade mark appropriately before granting you a licence. Knowing how you would use the trade mark can help make your argument for a trade mark agreement more persuasive.
Draft a Licensing Agreement
Once the trade mark owner is willing to licence their trade mark for a product to you, you will need to draft the contract. When drafting the contract, things you should consider including are:
- the scope of the trademark. For example, this includes what rights will you have as the licensee to use the trade mark. This can include the right to sub-licence the agreement, right to manufacture products, right to sell products and more;
- the parties to the trade mark agreement;
- the duration of the agreement;
- products or services you can use for the trade marks;
- rights to transfer the trade mark licence to another party;
- the licensing type (i.e. exclusive, non-exclusive, or sole);
- any geographical limitations for the use of the licence; and
- any other negotiated agreements, such as what will constitute a breach of the agreement or any other quality control measures such as the right to terminate the contract if certain targets are not met.
A written contract is fundamental to a licensing agreement for a registered trade mark.
Entering a licensing agreement is a great way to use someone else’s trade mark for mutual commercial benefit. Before entering into a licensing agreement, some of the things you should consider include:
- what type of licensing agreement is most suitable for your needs;
- how much you are willing to pay for a licence; and
- the scope of the trade mark you will require.
Negotiating and drafting a licensing agreement can be a complex process. If you need help with your licensing agreement, get in touch with our experienced trade mark lawyers. You can contact them on 1300 657 423 or by filling out the form on this page.
Frequently Asked Questions
A trade mark licence refers to the owner of a trade mark (the licensor) permitting someone else (the licensee) to use their trade mark for commercial use. You will negotiate the terms of the trade mark licence before being entering into a licensing agreement.
You should include several things in a licensing agreement. This includes the scope of the trade mark, the duration of the agreement, the licensing type, geographical limitations, and any agreed-upon control measures.