License your Trademark

License your Trademark

Trademark licensing is the process by which a registered trademark owner, called a licensor or proprietor, allows another party, called a licensee, to make and distribute specific products or services under the licensor’s trademark agreement. Trademark licensing is a type of merchandise agreement.

The licensor receives a certain amount of money or royalties, a percentage of all sales, in exchange for sharing the trademark. This compensation is also called consideration. Fashion and consumer products concerned with sports and entertainment are often sold under a trademark licensing agreement.

The licensee usually creates a trademark licensing agreement, but a licensor can also create this document. Both parties usually agree upon the terms before creating a trademark licensing agreement.

To be eligible for legal enforcement, a trademark license agreement doesn’t need to appear in writing. However, legal cases about written trademark license agreements are easier to resolve, less time consuming, and costly. Legal experts strongly recommend that all trademark licensing agreements get documented in writing and become signed and dated by both the licensor and licensee.

Types of Trade Licenses

  • Exclusive License: The licensee gains sole commercial rights to the trademark. The licensor has no commercial rights, but gains a sum of money for entering the agreement. The licensee also receives future profits or incurs losses that come from commercialization. Exclusive licenses may have limits on the products and location.
  • Sole license: The licensee and licensor can use the trademark. The licensor cannot license the trademark to a third party.
  • Non-exclusive license: The licensee, licensor, and any outside individuals the licensor also assigns a license to can use the trademarks.

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