A trademark license is an agreement between a trademark owner (the “licensor”) and another person or business entity (the “licensee”) in which the licensor gives permission to the licensee to use its trademark or trademarks in commerce.

If you are a trademark owner, a formal written trademark license agreement is recommendable if you intend to allow another person or business entity to use your trademark or trademarks. If you do not have a formal written trademark license agreement in place, you are putting your trademark rights at risk.

If you are a person or entity intending to use the trademark owned by another, a formal written trademark license agreement and your adherence thereby is recommendable to protect yourself from trademark infringement liability.

The nature and quality of the goods and/or services with which the licensee may use the trademark, also known as a “quality control provision.” Quality control provisions are necessary to a trademark agreement because a trademark represents the trademark owner’s reputation for goods and/or services of a certain level of quality. Consumers rely on this reputation in making purchasing decisions.

to adhere to its quality standards.

A quality control provision should contain a subprovision specifying “trademark usage,” as well as another subprovision specifying “quality control monitoring.” A “trademark usage” subprovision specifies the manner in which the trademark will be used on or in connection with the goods and services of the licensee and on advertising and promotional materials. The licensee may be required to obtain the licensor’s permission before using any new presentation of the trademark. A “quality control” monitoring subprovision may require access to the licensee’s facilities, raw materials, finished products, personnel and records to monitor the licensee’s adherence to the licensor’s quality standards.

Other provisions that are commonly included in a license agreement include the following:

Royalty – Licensors may grant a trademark license in exchange for royalty payments from the licensee.
Time Period of Use – A trademark license agreement usually sets a fixed term or time period of use.
Exclusivity – A trademark may be licensed exclusively to a single licensee or licensed non-exclusively to more than one licensee.
Geographic Scope A trademark license agreement usually specifies the geographic area within in which the trademark or trademarks may be used by the licensee.

An attorney familiar with trademark licensing may provide significant assistance in drafting and negotiating a trademark license. The attorney can advise about local requirements regarding trademark licensing requirements, including possible anti-competition laws and laws regarding recordation of the license. An attorney can anticipate possible challenges to your trademark rights in the future, and include provisions in the license that protect against such challenges.