As mentioned in Trademark Licensing, a trademark owner may permit another to use his or her trademark through a trademark license agreement for a period of time set out in the agreement between the licensor and the licensee.
What is a Trademark License?
First, we will start out with the basics. According to the International Trademark Association, “A trademark license is an agreement between a trademark owner (“licensor”) and another party (“licensee”) in which the licensor permits the licensee to use its trademark in commerce.” In the United States it is not required that the agreement be recorded with the national trademark office in order to be recognized. However, recording the agreement can provide notice to the public and any prospective purchaser of the trademark mentioned in the licensing agreement.
For instance, the Board of Trustees of Michigan State University owns the trademark in Michigan State University when used on goods and services such as t-shirts, jerseys, shorts, and jackets, but the Board may enter into a trademark license agreement with a sports company, like Nike, to produce apparel to sell in the Michigan State University campus clothing stores.
Essentials of Trademark License Agreements
Next, there are some essential elements that each trademark license agreement should include. The International Trademark Association identities some of these essentials, which include:
- the trademark;
- the licensor and the licensee;
- the territory where the licensee may use the trademark;
- the goods and/or services that the licensee may offer under the trademark;
- the duration of the license;
- quality control provisions;
- whether the license is exclusive; and
- the quality of the goods and/or services the licensee may offer under the trademark.
Exclusive and Non-Exclusive Trademark Licenses
Pursuant to the World Intellectual Property Organization (hereinafter WIPO), “an exclusive license provides the licensee with the right to use [the] trademark to the exclusion of all, including the licensor. Thus, the trademark owner cannot use the trademark himself nor can he license any rights to others. The licensee remains the only user of that mark in the relevant market.” A non-exclusive license grants the licensee the right to use a trademark; however, the licensor may continue to use the same trademark and grant other licenses.”
Benefits of a Trademark License Agreement
Finally, it is valuable to know that a trademark license agreement may be beneficial to all parties involved. The owner of the trademark, also known as a licensor, is able to expand his or her business to work with other entities while still protecting his or her mark in the process. Additionally, a well written licensing agreement for the owner’s mark will ensure that the licensee properly uses the mark and maintains the same quality of goods and/or services that the owner provides. Moreover, through a trademark license agreement, the party who receives the licensed trademark, also known as the licensee, is able to use the owner’s mark on the goods and/or services set out in the agreement. Not only will this agreement provide the licensee with permission to use the mark, but it will also provide several protections to the licensee in regards to trademark infringement liability.