Trademark license agreement pro licensor [Fact Checked]

Last updated : Sept 28, 2022

What are three types of licensing agreements?

Generally, there are three types of licensing agreements: exclusive, sole, or non-exclusive. In an exclusive license, the licensee is only the party that can use the licensed intellectual property.

What is a trademark licensing agreement?

A trademark license agreement allows the licensee to use (but not own) the licensor's trademark in connection with agreed-on products or services. Licensing can help a company expand into new markets effectively and easily while lending the licensee an established name and reputation.

What are the disadvantages of a licensing agreement?

• The licensor having loss of control of their intellectual property.
• The licensor having to depend on the skills, abilities, and resources of the licensee to generate revenues.
• The licensor being exposed to intellectual property theft by the licensee.

What should be included in a licensing agreement?

The licensing agreement should explain what the licensee can do with the license. It should say whether the license is exclusive or not. It should also discuss whether the licensor gets to use the license or cedes all rights to the licensee.

What is the difference between licensee and licensor?

The licensee is the party that receives a license, while the licensor is the party that grants the license. For instance, when a bar owner gets a liquor license from the state where he operates his business, the owner is the licensee and the government that issued the license is the licensor.

What is the purpose of trademark licensing?

A trademark license is granted to legally permit a third party to make use of the Registered Trademark. It is a common practice by foreign companies, the tech companies, in particular to provide TM License in other countries so that their trademark can be exploited in those countries.

Why is trademark licensing important?

Licensing of Trade mark is important, as the market is always in need of reputed/recognized trademark, the usages of such trademark must be fulfilled by obtaining rights to use the trademark by way of licensing, or otherwise persons may be forced to 'pass-off' their goods/services under similar marks or even pirate a ...

What is a reasonable royalty rate for a trademark?

25% Rule for Intellectual Property Patent or trademark owners use the 25% rule as a yardstick for defining a reasonable amount of royalty payments.

What is a major advantage of licensing?

Licensing is designed to reduce the risks involved in doing business for everyone involved. From a licensee standpoint, there are fewer risks in product development, market testing, manufacturing, and distribution. From a licensor standpoint, there are fewer risks in the selling and service of what is being offered.

How do you negotiate a licensing agreement?

1. Do your homework.
2. Start with a term sheet.
3. Manage your expectations.
4. Be patient.
5. Have a win-win attitude.
6. Don't lose your sense of humor.
7. Remember to hold something back.
8. Put yourself in their shoes.

What are the benefits of licensing your brand?

• Commercial revenue stream.
• Utilising the capabilities of the other party.
• Entering new markets/distribution channels.
• Increased brand awareness.
• Advertising.
• Co-branding.
• Infringers and Competitors.

What is a typical royalty percentage?

In most cases, licensors prefer a royalty rate that falls within 25% to 75% range of the sublicensing income. Their stake usually amounts to more than half of all profits. In rare cases, the licensee can negotiate a rate split and apply their own royalty obligation to the sale of sub-licensed products.

What is the most important step in licensing for a licensor?

One of the most important elements of a licensing agreement covers the financial arrangement. Payments from the licensee to the licensor usually take the form of guaranteed minimum payments and royalties on sales.

Why would a company use a licensing agreement?

Licensing involves obtaining permission from a company (licensor) to manufacture and sell one or more of its products within a defined market area. The company that obtains these rights (the licensee) usually agrees to pay a royalty fee to the original owner.

Who is the largest licensor in the world?

Notably, The Walt Disney Company holds firm to its designation as the world's leading licensor, reporting an estimated $56.2 billion, marking a $2.2 billion in growth year-on-year.

Is licensing low risk?

Most companies consider this market-entry option of licensing to be a low-risk option because there's typically no up-front investment.

Is licensee the owner?

Essentials of a licence License is granted to do something in or upon the grantor's immovable property. The license does not relate to ownership of any land but only creates a personal right or obligation.

What is a licensee example?

Some examples of licensees include individuals with a driver's license, individuals licensed to practice medicine, and an individual granted license by a landowner to store goods on the landowner's land. Licensees may enter into a contractual relationship with a licensor to receive a license.

What is the difference between license and licence?

License is both a noun and a verb in the United States. If you live in any other English-speaking country, you will spell it licence when you use it as a noun and license when you use it as a verb.

Is licensing of trademark mandatory?

ADVANTAGE OF RECORDAL OF LICENSE AGREEMENT Recording a license of Trade mark is not mandatory as per the provisions of the Trade Marks Act, 1999. However, it is advisable to record the license Agreement.

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Thanks for this great article

Thanks for your comment Sammy Velarde, have a nice day.
- Eliana Danson, Staff Member

hi I'm trademark attorney Morris Turek I protect individuals and businesses throughout the world by assisting them with their important trademark matters I am commonly asked by both current and prospective clients whether they can allow someone else to use their trademark well the answer is yes a trademark license is basically an agreement whereby a trademark owner permits someone else to use the owners trademark in connection with specific products or services although a trademark license isn't required to be in writing to be enforceable it's strongly recommended that all trademark licenses be memorialized in a written and signed document although the terms of every trademark license are different and may be freely negotiated all licenses must include certain provisions to be valid for instance the license must set forth the names of the parties agreeing to the license a clear description of the trademark being licensed the types of products or services that the trademark may be used with the geographic territory in which the licensed products or services can be sold and most importantly the quality control standards that the products or services must meet of course there are many other terms that a trademark license should explicitly state so as to avoid serious problems down the road if the trademark being licensed is federally registered the trademark license may be recorded with the trademark office in order to give notice to the world of the existence of the license however many licenses include confidential or commercially sensitive information that the parties may not want available to the public in those cases it may be possible to record a redacted version of the license or to file a separate document executed by the parties that makes reference to the licensed trademark licensing can be an effective and relatively inexpensive way for a trademark owner to expand the use and public recognition of its trademark but there are also many pitfalls of which trademark owners must be aware in order to avoid diminishing the value of their trademarks or even worse losing their trademark rights altogether you may want to speak with a knowledgeable and experience trademark attorney if you're thinking about licensing your trademark to someone else if you would like to learn more about trademark licenses or perhaps need some assistance with preparing a trademark license of your own please feel free to give me a call I look forward to hearing from you soon you

Thanks Cilimbinij your participation is very much appreciated
- Eliana Danson

About the author

Eliana Danson

I've studied fractal geometry at Morningside College in Sioux City and I am an expert in property law. I usually feel cheerful. My previous job was truck driver, light duty I held this position for 26 years, I love talking about snowshoeing and hiking. Huge fan of Jim Elliot I practice lacrosse and collect cracker jack prizes.