Trademark License Agreements

One of the most important concepts is quality control to protect the goodwill of trademark rights; Compensation – A common form of compensation is a levy based on the percentage of net sales. The licensee can even check the activity of the taker to verify that the licensee is properly compensated. This can be defined in a registration and monitoring clause. The licensee may also wish for some form of assurance that the policyholder will do his best to exploit the licensed brands. This may take the form of a “Best Efforts” clause or there may be a minimum royalty charge. A trademark assignment is a document used to transfer rights to a trademark (i.e. logo, name or symbol) to a new owner, creditor or even in the context of the liquidation of other contractual negotiations. An assignment may either have all the rights attached to a trademark or be limited in one way or another. Guarantee – A licensee may demand that his interests be protected by a clause, the donor offering an explicit guarantee of non-counterfeiting. This may mean that the licensee agrees to release the licensee for all costs related to the intellectual property infringement.

Insurance – This provision requires the policyholder to receive insurance in order to protect the donor from liability in the event of claims against the taker and to possibly cover the inability of the taker to fulfil his obligations under the license agreement. An experienced trademark lawyer can probably provide useful information about trademark licensing conditions. (C) Not exclusively – rights may be granted to other third-party licensees, and the licensee may also use the trademark in trade. The duration and right to terminate the terms of a trademark licensing agreement are also important, as they give the licensee the opportunity to license the mark for a short period of time to determine whether the commercial relationship is profitable enough to extend for a new term. Similarly, the right to terminate the contract is important to the licensee, as it allows the licensor to terminate the contract immediately after the dementer of the taker or for other offences. In this way, the brand owner can stop the erosion of brand value if a taker does not meet the quality standards that consumers expect from the original supplier of brand-related goods or services. Overall, licensing agreements are very common, but trademark holders should seek the help of experienced consultants to design clearly defined licensing agreements that protect both the brand`s positive will to use and the licensee`s rights. A trademark licensing agreement is a legal contract between a trademark holder and another party who have agreed to use the trademark under pre-approved and established conditions between the contracting parties.