What is Trademark Licensing?
Trademark licensing denotes that the trademark holder is permitted to use the trademark by a third party.
Even though this term is no – where defined in The Trademarks Act 1999 in general parlance it allows the assigned third party to use and exploit a trademark as per their whims and fancy.
A trademark transfer can happen via means or an assignment.
What are the Benefits of Trademark Licensing?
• Economic vis a vis Monetary Benefits
Trademark licensing denotes mutual benefit for both the parties as one of the parties is benefitted from the benefits of the license and the other party (the trademark holder) gets monetary benefits in the form of royalty.
• Denotes Expansion
This means that assigning a trademark to different licensees can allow a trademark holder to expand their business with the help of various license holders.
• Increases Popularity
A trademark license automatically increases the domain of business operation. Therefore, it can be successfully apprehended that a trademark license allows a brand to increase its popularity.
• Helps in promoting Brand Recognition
A trademark license helps the brand gain recognition and goodwill by increasing its area of business w. This, in turn, increases the brand's popularity and helps it gain recognition and goodwill.
Types of Trademark Licensing
1. Exclusive License:
Under this category, the licensee is the sole user of the trademark. The licensor is neither able to retain his right to use nor to grant further Licenses. However, the licensor retains the right to own the trademark exclusively.
2. Non-Exclusive License:
Under this scenario, the licensee acts as just one of the various users of the trademark. The licensor retains his right to use and grant further licenses as well. Also, the exclusive right to own the trademark lies with the Licensor only.
3. Sole License:
Under this category, the Licensee is the only other user of the trademark besides the licensor. The licensor does not possess the right to grant further Licenses but retains his right to use and exclusively own the License.
4. Sub License:
Under this category, both the licensor and the licensee possess the right to use and grant further licenses of the trademark to third parties. The Licensor, however, remains the sole and exclusive owner of the trademark.
Legal Framework of Trademark Licensing in India
The legal framework of trademark licensing is encompassed around the Trademarks Act 1999.
Trademark Licensing Agreement
Trademark licensing agreements refer to the contractual agreement between a trademark holder and the other party where a trademark holder transfers some of the rights associated with the trademark to a third party while retaining the original rights himself.
In this scenario, a trademark holder is called as a licensor and the other party is known as a licensee.
Trademark License Registration: Requirement & Procedure
1) A joint written application should be filed to the registrar of the trademark under the–2828 form.
2) This application should be filed in triplicate and shall be endorsed by the license agreement between the trademark holder and the other party, a supporting affidavit and a copy of the correspondence.
3) Ingredients of supporting affidavit – A) defining the relationship between the original user and the proposed user of the trademark. B) commodities for which the use of a trademark is granted. C) Time frame for which the access is granted to use that trademark
4) Ingredients of license Agreement – A) Terms defining the settlement of royalty and remuneration. B) Terms defining the conditions in which the agreement can be terminated.
5) It is to be noted that the registrar may grant a conditional acceptance and can schedule a hearing if he is not satisfied with the conditions of the agreement.
6) It is also the registrar’s responsibility to notify the other users and to get this fact published in the trademarks journal.
Cancellation of Trademark License Registration
Cancellation of the said license can be made under the TM-U form. This cancellation can be proposed in the below-mentioned scenarios –
1) In violation of the contract.
2) In the event of misrepresentation or active concealment of essential facts.
3) The change in circumstances in a way that changes the essential elements of a contract.
Notice and Procedure for Cancellation Trademark License Registration
It is the duty of the parties to notify the Trademark office and after their decision, it becomes their duty to notify the other registered users or parties that might be affected bthisis decision.
How does Trademark Licensing Different from Trademark Assignment?
Trademark Licensing refers to the act of partially transferring some rights that the trademark holder possesses to the other party, while trademark assignment refers to the practice of transferring every right related to a trademark to the other party. Trademark licensing ensures that the original rights remain with the trademark holder.
Conclusion
A trademark license allows a business to expand and gain recognition. Although, it is not a mandatory practice with the help of professionals it can serve as a boon for business.
eStartIndia is one of India's leading legal services platforms help you to Register your Trademark without any hassle at an affordable cost.
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