Trademark License Agreement

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A trademark license agreement 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. Complete this trademark license agreement on Lawrina in a flash and get a perfect PDF template on your device or inbox.

Template Description

Paper titled "Trademark License Agreement"; the copyright sign and a magnifier; men discussing a paper

While most business owners understand that registering a trademark is important, other uses of this valuable intellectual property aren't that well-known. One of those is a trademark license agreement, a great way for the owners to monetize their trademarks without selling them (or their business) and for other people to hit the ground running by obtaining the right to use a trademark for their business.

This Lawrina trademark license agreement description will tell you how you can license your trademarks or  use other well-established trademarks within your business. Not only will we give you explanations, but also offer a simple trademark license agreement template you can use.

What Is a Trademark License Agreement?

A contract in which the licensor gives the licensee permission to use the licensor's trademark under specific and strict terms and conditions is called a trademark license agreement. 

While the trademark license agreement definition might seem complicated, trademark licensing is very common in business – various kinds of franchises use licensed trademarks, and you can see it in industries such as fashion, food and beverages, automotive, fitness, etc. 

Parties of the Trademark License Agreement

A trademark license agreement (usually) has two parties:

  • Licensor – this can be the owner of a trademark, but also a licensee, if their trademark license contract allows sublicenses;

  • Licensee – this is a party that obtained the right to use the trademark via a trademark license agreement, and;

  • (Optional) Sublicensee – in cases where a licensee is allowed to give sublicenses, a third party that obtains a trademark license is called a sublicensee.

Key Terms

Besides trademarks, parties, and their names, here are some important terms you should be aware of before creating or signing a trademark license agreement:

  • Exclusivity – determining if the license is exclusive or non-exclusive is one of the most important aspects of a trademark license agreement;

  • Goods and services – trademarks are registered for specific goods and services by the Nice classification. The licensor can choose which goods/services they are going to license, or they can authorize the use of the trademark in its entirety for all registered classes;

  • Geographic limitations – a trademark owner usually grants licenses for particular locations. This can be specified on a federal or state level, and the licensee is only authorized to use the trademark within those borders;

  • Royalty – the licensor can request royalty for trademark use, and the trademark license agreement will specify the terms;

  • Time period – also known as the term, this specifies how long the license will last;

  • Standards – trademark licenses are usually only a part of a larger business deal, such as franchising. Therefore, quality standards are often agreed upon – they require specific standards a licensee must maintain to keep their license. The main goal of those standards is to protect the authority of the brand that the trademark represents, which is usually the primary reason why the licensee wants to open a franchise, and;

  • Termination terms – as with other (complex) contracts, a trademark licensing agreement contains termination terms, which are usually there to protect both parties from abruptly ending the legal relationship.

Types of Trademark License Agreements

Trademark license agreements can come in various forms, with the main difference being the type of license they grant:

Exclusive License

An exclusive license makes the licensee the only one who can use the trademark in the agreed location. That means that not even the licensor can use the trademark and can't give licenses to anyone else through another trademark license agreement.

Non-Exclusive License

Contrary to the exclusive license, a trademark license agreement containing a non-exclusive license allows the licensor to give trademark licenses to other parties within the same region. 

Sole License

A sole license only allows the licensor and the licensee to use the trademark. A trademark license agreement with a license of this type prohibits the licensor from giving more licenses to other businesses. 

Who Should Use a Trademark License Agreement?

A trademark license agreement can be useful for various types of licensors or licensees, such as:

  • As a licensor – brand owners who want to strengthen their brand by allowing other businesses or individuals to operate under their name in new territories; franchises who license not only their trademarks but the entire business model and know-how; merchandise companies who allow other businesses to sell their products and display their trademarks, and;

  • As a licensee – businesses who wish to borrow the authority of a known trademark may want to sign a trademark license agreement and start (exclusively) using their trademark in a new territory; likewise, franchisees benefit not only from trademarks but from the entire business reputation and know-how the franchisor has, allowing them to minimize risk and have more predictable business results.

Those are just some examples of how licensors/licensees can benefit from a trademark license agreement. Our trademark license agreement template will serve as a great starting point you can customize.

Why Does Every Trademark License Need an Agreement?

Without a trademark license agreement, it would be very hard to define all the nuances that make up the terms and conditions of the licensing relationship. Plus, both parties would be unprotected if something goes wrong, which makes having at least a simple trademark license agreement a much better option than leaving everything to chance.

What Is Included in a Trademark License Agreement?

Our key terms section mentioned some important elements of a trademark license agreement, but here is a short trademark license agreement checklist:

  • Names of the parties – when filling out your trademark license agreement template, ensure you specify both the licensor and the licensee in detail, mentioning full legal names, addresses, registration numbers, legal representatives, and other important information;

  • Trademark(s) –  specify the trademarks in your trademark license agreement template. Don't just use descriptive words, but put the actual registration numbers, as well as the institutions where trademarks are registered. This is especially important for big-name brands, as they tend to have dozens of similar trademarks registered;

  • Products and services – describe them but also use Nice classification codes to make your trademark license agreement template clear;

  • Territory – one important aspect of trademark license agreements is the geographic limitation of its use;

  • Duration – a trademark license agreement should also specify how long the license will last;

  • Exclusivity – trademark licenses can be exclusive, non-exclusive, or sole licenses;

  • Other standards – you can include specific conditions the licensee needs to follow if they want to maintain their license, as well as ways the licensor will control the use of their trademark;

  • License fee – the licensor may request a licensing fee, so all of the payment terms should be specified in the trademark license agreement template, and;

  • Termination – both parties should be protected in case of a contract termination, which is why you should at least specify a notice period, and maybe even indemnification in case of harder breaches.

How To Write a Trademark Usage Agreement

Now let's give you some tips that will help you write a trademark license agreement:

1. Parties

When filling out your trademark license agreement template, ensure you specify both the licensor and the licensee in detail, mentioning full legal names, addresses, registration numbers, legal representatives, and other important information that will help in easily identifying parties.

2. Recitals

Recitals of a trademark license agreement can contain the intention of the contract and further describe the parties and trademarks. However, recitals aren't a requirement and aren't legally binding, so make sure you put everything important in the contract body.

3. Grant of License

Grant of the license is a clause specific to a trademark license agreement in which the licensor specifies the trademark and the license conditions – its exclusivity, geographic limitations, the products or services it covers, as well as how long the license will last and the amount of the licensing fee or compensation.

4. Territory

Defining the territory where the licensee can use the trademark is an integral part of any trademark license agreement, so ensure you don't forget this clause.

5. Consideration

The consideration section describes what each party should give to the other to fulfill their obligations from a trademark license agreement. As an example – the licensor can guarantee the trademark is registered and that they will transfer the license for selected goods and services in good faith, while the licensee agrees to pay a fee or royalty for trademark use.

6. Term

The term describes the duration of the license and is a key component of any trademark license agreement.

7. Quality Control

We have mentioned that trademark licenses are often part of a larger franchising agreement, which is why they are accompanied by quality standards licensees must maintain.

8. Termination

Termination terms will specify how each party has the right to end the relationship and usually define a notice period and eventual compensation.

When To Use a Trademark License Agreement

Whenever you want to allow someone to use your registered trademark or whenever you want to get access to another person's trademark, a trademark license agreement is a viable option for arranging such a deal.

Common Use Cases

Here are some common uses of a trademark license agreement:

  • Franchising;
  • Manufacturing;
  • Sponsorships;
  • Co-branding, and;
  • Merchandising.

When Not to Use a Trademark License Agreement

A license only allows you to use a registered trademark but doesn't transfer ownership. Therefore, signing a trademark license agreement is not a good idea if you intend to acquire a trademark permanently. 

Legal Disclaimer

Please note that Lawrina does not provide any legal services. The information on Lawrina’s Site and its downloadable content, including legal articles and templates, shall not be considered legal advice and is not guaranteed to be correct, complete, and up-to-date. If you require legal advice on your issue, we recommend you contact a qualified attorney licensed in your state. You personally assume full responsibility for any consequences, damages, and costs associated with your use of any content of Lawrina Services available on Lawrina’s Site. 

By using Lawrina’s Site you agree with mentioned above and give your irrevocable consent to comply with and to be bound by the provisions of Lawrina Service terms. 

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Frequently Asked Questions

Can logo licensing for a trademark usage agreement be oral?

While it is not required to have a trademark license agreement in written form, it is highly recommended. In case of any disputes, it will be next to impossible to determine what was agreed upon if you only had an oral trademark license agreement.

What makes a trademark license enforceable?

A trademark license agreement is a contract between two parties, the licensor and the licensee. As with other contracts, it is enforceable by the law in cases when one party failed to deliver what was agreed upon, and especially if the other party suffered damages resulting from contract breaches. Because of this, it is always recommended to have things written and use a trademark license agreement template.

How do I record a trademark license agreement?

Recording a trademark license agreement is not required in the US. However, because trademarks are often used internationally, it may be wise to record them internationally. You may consider recording a trademark license agreement with the Madrid system.

 

Note that all these answers may vary depending on the state and should be discussed with a legal professional.

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