When registering a trademark with the federal government, most people focus more on protecting their trademark rather than on licensing other people to use their trademark. As your corporate name spreads and your brand becomes recognized, other companies may want to license your trademark. This License Agreement Template specifies the terms and conditions governing how the licensee uses your trademark and provides you, the licensor, with a quality control mechanism. Typically, a licensee will use your trademark on their products or services in exchange for a fee, paid either as royalties or in a lump sum.
A trademark license contract lets a company buy or sell the rights to a trademark which is a form of intellectual property. Most people think of contracts to buy, sell, or rent physical property, but companies should remember their intellectual property, like a registered trademark.
Sometimes called a ‘permission to use trademark agreement’ or a ‘brand licensing agreement,’ this type of contract should be in writing any time you have a professional arrangement using a registered trademark or TM in exchange for payment. The contract spells out the respective rights and obligations of both the owner of the trademark who is granting the license and the party who is obtaining the rights to use the trademark. The licensee needs to understand the limits of how they may use the trademark, whether it is restricted to a geographical region, and over what time period the license is valid.
Every trademark a company has should have a licensing contract. Licensing your trademark can mean increased brand awareness and revenue the person who owns the trademark, and it can benefit the person using the trademark the same fashion. As a rule of thumb in any business, a contract should always be used to cover any situation where money is exchanged for goods or services. As the trademark owner, allowing someone to use an image associated with your brand requires you to protect that image and that brand with a proper contract.
A simple trademark license agreement should be used by every trademark owner. A trademark is a valuable asset that protects your ownership rights but also offers you an opportunity to grow new revenue independently.
In a trademark license agreement template, you will find many of the same sections:
Quality control is one of the most important things to include in your trademark license agreement. As the licensor, you have to make sure that the licensee is producing products or services that meet the same value or standard of quality as your company. . You don’t want your trademark or your brand to be harmed because of a licensee’s failure to control the quality of their goods or services.. As the licensor, you might also want to require any promotional or advertising materials to be approved by your company before they get distributed. If you don’t enforce quality control, it can leave your trademark vulnerable to a substantial loss in value, damaged in the public mind by a licensee’s flaws.
You also want to include provisions addressing exclusivity as well as information about how long the license applies. If the license has to be renewed at any point, and under what conditions it can be renewed, it should be clearly established in a separate section. Don’t forget to include a section about payment or compensation, when payments are dueto the licensor, and in what form. It’s especially important to state what consequences result from any late or missed payments. The more granular your terms are inthis section, the more easily enforced those conditions will be.
Finally, consider a list of responsibilities for both parties once the license expires or is terminated and what the consequences are for breaching that license. In this final section about the consequences of a breach of contract, you should be very specific about the timeline for rectifying any legal issues that come from a breach of contract.
TRADEMARK LICENSE AGREEMENT
THIS TRADEMARK LICENSE AGREEMENT (the “Agreement”) is made with effect as of the 19th day of July 2019 (the “Effective Date”),
FAKE CORPORATION, a corporation governed by the laws of the State of Fake State located at 123 Fake Lane, Fake State
FALSE CORP LIMITED, a company incorporated under the laws of Canada located at 456 Fake Circle, Canada
WITNESSES THAT WHEREAS:
A. To the Licensor’s knowledge, the Licensor owns or holds certain rights in respect of those trademarks listed in Schedule A attached hereto (collectively, the “Marks”);
B. Pursuant to that certain Master Amending Agreement (the “Master Amending Agreement”) dated as of the Effective Date between the parties, the Licensor has agreed to license to the Licensee the non-exclusive right to use the Marks; and
C. To the Licensor’s knowledge the Licensor has the right and authority to license to the Licensee the right to use the Marks.
NOW, THEREFORE, in consideration of the representations, warranties, covenants, and agreements contained herein and in the Master Amending Agreement and other good and valuable consideration (the receipt and sufficiency of which is hereby irrevocably acknowledged), the parties agree as follows:
TRADEMARK LICENCE TERMS
Grant of Licence. The Licensor hereby grants to the Licensee on the terms contained herein a non-exclusive, royalty-free license (the “Licence”) to use the Marks throughout the world (the “Territory”) in association with the goods and services specified in the agreement.
In order to write a trademark usage agreement, you must start with the introduction of the parties. This includes names, addresses, and how they will be referred to throughout the remainder of the document.
The recitals are a boilerplate section that you can see in the section above and this includes the “whereas” clauses. You can take a free trademark license agreement template and use the recitals from it directly.
This section gives the official acceptance of the trademark’s use. You can explain the exclusive or non-exclusive nature of the agreement and what companies or individuals are receiving the licenses.
In the section, you can explain where they are allowed to use that license or trademark for their services and goods.
Consideration is a fancy term for the payment section. This is where you state what each party is expected to do. One side of the party is expected to transfer temporary ownership, while the other is expected to pay money in exchange for that transfer. This might be giving a lump sum or making regular payments based on sales. The validity of a contract can be questioned if there is no consideration specified.
This is where you state the length of the contract. You can also include terms like the agreement or license renewing automatically every year or renewing automatically at the expiration of the first term.
Quality control should be a large section where you designate what levels of quality control have to be implemented. This clause should state who is responsible for the quality control, what form it takes, how often it has to be confirmed, and so forth.
In this final section, it is explained under what conditions the agreement can be terminated before the end of the scheduled term..
By drafting a trademark agreement properly, you can secure getting a quality control mechanism to avoid all possible legal issues. Make sure all the issues addressed above are considered when you are registering a trademark with the federal government. A free trademark usage agreement can help you to save time and ensure everything is to the point.
Frequently Asked Questions
Technically your trademark license can be oral, but it is never recommended. It is always much better to have a written agreement that is signed by both parties in case there are problems down the line. In order to enforce the laws governing topics like the licensee’s liability for paying to use the trademark or any unauthorized infringement, you need hard evidence of what the parties specifically agreed to. When both parties have different sides to the story, without a trademark license agreement form, it's much more challenging to prove the facts to enforce governing law.
A simple trademark license agreement is enforceable, whether it’s oral or in writing. However, having a downloaded, printable PDF document will make it much easier during litigation to enforce all aspects of the agreement. It is highly recommended that you have a standard trademark license agreement in written form, signed by all involved parties. You can find a simple checklist or an example online that includes all the sections you want in your agreement. You can then make a copy, or you can create your own.
When you register a trademark, you do it through the United States Patent and Trademark Office (USPTO). Once you have a trademark license agreement, you should record it with the Assignment Services Division of the USPTO. Be careful doing so because this becomes public domain, and some free trademark license agreements might include commercially sensitive or confidential information or trade secrets you don't necessarily want to be publicized. You can redact some sections of your license agreement or file a separate document that contains all of the pertinent information without disclosing sensitive information.