How do I apply for a trademark license?

 

When a trademark owner licences their mark to a third party in exchange for a royalty, this is known as trademark licencing. The owner retains ownership of a registered trademark, and only a limited right to sell and use products bearing the mark is granted to a third party. The Trademark owner can also impose additional restrictions on the use of registered trademarks through the terms of the Trademark Licensing Agreement. So, in this article, we will show you how to obtain a trademark licence.

Trademark Licensing

Trademark licencing is the process by which a registered owner of a Trademark authorises a third party to use the mark or logo without transferring ownership of the Trademark. In layman's terms, Trademark Licensing allows the registered owner to allow others to use the mark or brand name without transferring ownership of the mark. The Trademark owner can also impose additional restrictions on the use of registered trademarks through the terms of the Trademark Licensing Agreement. The registered Trademark owner may collect royalties from the Licensee for agreed-upon commercial uses of the registered Trademark.

 

Section 49 of trademark act 1999

Section 49 of India's Trademark Act, 1999, governs the licencing of Service Marks and Trademarks. Trademark licencing is generally based on some agreed terms and conditions concerning the proposed product's quality standard, the maintenance of the established status of the concerned product and Trademark, exclusiveness for the same, the various ways the Trademark may be used, and so on. Trademark licencing is done for a set period of time. The Indian Trademarks Act provides no legal terms or duration for trademark licencing in India.

What are the Different Types of Trademark Licenses?

Ø  Sole License: This is an exclusive licence in which both the Licensee and the Licensor can use the Trademark. The Licensor, however, is not permitted to licence the Trademark to others.

Ø  Exclusive License: The Licensee is granted exclusive commercial use of the Trademark under this licence.

Ø  Non-Exclusive License: A Non-Exclusive License can be granted to one or more licensees.

 

Advantages of Trademark Licensing

Ø  Both parties can benefit financially because the trademark is widely used for profit and a royalty is paid to the owner. The Licensor, who previously could not exploit their Trademark due to a lack of visibility or resources, can now use the Licensee's resources by granting them the licence and profit more. The Licensee is also entitled to a portion of the profits.

Ø  Boost Trademark Popularity: As the Trademark reaches a large number of customers, it automatically gains popularity. This increases profits through increased sales and facilitates additional Trademark Licensing.

Ø   Business Expansion: The trademark owner's business grows and expands into new territories. The business is no longer limited to a single region; rather, the Licensee can use their distributor skills to expand the business.

Ø  Brand Recognition: A trademark as a brand becomes well-known in previously unknown territories. The Licensee can promote extensively using their resources.

Ø  Reduce or distribute workload: In some ways, the Licensee becomes the Licensor's partner. The Licensor's workload is reduced, and he or she no longer needs to be concerned about the quality of products and services because the Licensee is equally responsible for maintaining the quality of products created using the Trademark.

What exactly is a Trademark Licensing Agreement?

If you are a Licensor, you must conduct a due diligence check on a capable Licensee to ensure that they have the necessary managerial and financial capacity to use the Trademark effectively. However, whether you are a Licensee or a Licensor, it is critical that the Trademark Licensing Agreement be written concisely to avoid problems. The following are some important clauses that should be included in your Agreement:

Ø  Details about the parties and their business structure

Ø  The Licensee's start date for using the Trademark and, if applicable, the expiry date.

Ø  Payment information in the form of an aggregate payment or royalties amount for the Licensor.

Ø  The grant clause specifies whether the terms of the licence are exclusive, sole, or non-exclusive.

Trademark Licensing Procedure as Embodies Under the Trademark Act

1.      Although registration of permitted use is optional, it is strongly recommended that the Registered User Agreement or License Agreement be registered with the Trademark Registrar. Regarding registered trademarks, an application for record of a Registered User Agreement or License Agreement with the Trademarks Registry can be made, and the application for record of the proposed License Agreement should be made or drafted within 6 months of the date of the Agreement.

 

2.      To register an individual as a Registered User or Licensee of a Trademark, both the registered owner or Licensor and the Registered User or Licensee must apply in writing to the Trademark Registrar using Form TM-U and providing the following information:

3.      A duly certified copy of the agreement or written agreement between the registered owner or Licensor and the proposed Registered Use or Licensee regarding the permitted use of the proposed Trademark;

4.      An affidavit made by the registered owner or Licensor providing details; of the connection between the Licensor or registered owner and the proposed registered user or Licensee - of control by the owner or Licensor over the permitted use by the Licensee which their relationship will present - products or services concerning which Registration is proposed; of restrictions/conditions, if any, proposed concerning the characteristics of the products or services, to the place of registration

5.      A signed Power of Attorney in favour of agents (if any); and

 

Any additional documents or proofs required by the Trademark Registrar or as prescribed.

Once the Trademark Registrar is satisfied with the application and the accompanying facts, he or she registers the proposed Licensee or Registered User for the products or goods for which he or she is satisfied. The date on which the registered user's application was filed must be stated in the Trademark Register entry. Within two months of the Trademark Registration date, the record will be published in the Journal. The Trademark Registrar is also required to notify other Licensees or registered users of the proposed Trademarks in the suggested manner of such Licensee's Registration (if any). As a result, upon the applicant's request, the Trademark Registrar shall take steps to ensure that the details provided for the application under Section (other than matters entered in the Trademark Register) are not revealed to opponents or competitors in trade.

Registration Cancellation

Some or all of the products or services covered by a trademark or brand may be licenced. Section 50 of the Act provides for Cancellation/Variation of Registration if a Registered User or Licensee has used the Trademark in a manner inconsistent with the Agreement, or the owner or user has failed to reveal any material fact for such Registration, or the specification in the Agreement about the quality of products is not enforced, or the conditions have changed since the Registration Date, and so on. Prior to cancellation of Registration, the proposed provision requires notice and a hearing.

 

Conclusion

Trademark licencing is the process by which a registered owner of a Trademark grants a third party permission to use the mark or logo without transferring ownership of the Trademark. In layman's terms, Trademark Licensing allows the registered owner to grant others permission to use the mark or brand name without transferring ownership of the mark. So, in the preceding article, we demonstrated how to obtain a trademark licence, what types of trademark licence exist, what the benefits of obtaining a trademark licence are, and what trademark licence aggrement is. It should be noted that the Licensee is only granted certain rights in relation to a registered Trademark, while the registered Trademark owner retains exclusive ownership of the licenced Trademark and other essential rights associated with the Trademark. As a result, we can assist you in obtaining a trademark licence. LegalRaasta  provides very detailed and beneficial information about Trademark Licensing, and our team of professionals will assist both domestic and international companies and firms in this service.