What is a trademark licence?

A Trade mark licence refers to an arrangement between the trade mark owner and another party, granting permission to engage in activities that would otherwise infringe upon the owner’s rights without such a licence. The party offering the licence is known as the ‘licensor,’ while the individual or entity receiving the licence and utilizing the trade mark is referred to as the ‘licensee.’ This agreement allows the licensee to use the trade mark in a legally authorized manner, avoiding any potential infringement issues.


How does licensing a trademark work?

A trade mark licence enables the licensee to utilize the licensor’s trade mark in association with specific products or services, subject to a fee. While the terms of each license may vary and are open to negotiation between the licensor and licensee, certain essential elements must be included to ensure the validity of the agreement.

These crucial components include:

  1. Identification of the trade mark(s) covered by the agreement.
  2. Specification of the products or services for which the licensed mark may be employed.
  3. Definition of the geographical territory within which the licensee is permitted to operate and market its products or services.
  4. Implementation of quality control provisions that establish clear standards concerning the nature and quality of the licensed products or services.

For the licensor, the quality control provisions in the licence hold particular significance. Ensuring that the licensee’s products or services meet specific standards is essential, as any deviation could potentially harm the reputation and value of the licensor’s trade mark.


How to License a Trademark?

The procedure for licensing a registered trademark in India is outlined in Section 49 of the Indian Trade Marks Act of 1999. While it is not mandatory to inform the concerned Registrar of Trade Marks about any such licensing arrangement, recording it with the Registrar offers significant benefits and security for both the proprietor and the licensee. By recording the licensing of a trademark, the licensee or registered user gains the ability to independently initiate legal proceedings, especially in cases of trademark infringement.

To register a person or company as a registered user or licensee of a registered trademark, the Form TM-28 must be jointly filed with the concerned Registrar of Trade Marks by the registered owner or proprietor/licensor and the proposed licensee or registered user. The Registered User Agreement or License Agreement is among the documents and enclosures to be submitted to the registrar as part of the process. The application should be made within six months from the date of finalizing the agreement between the licensor and licensee. This agreement must specify the licensing period and encompass the mutually agreed terms and conditions.

After thoroughly evaluating the License Agreement, the Registrar will publish the relevant information in the Trade Marks Journal within two months to solicit ‘No Objections’ from other parties, both in India and abroad. This process ensures transparency and compliance with legal procedures while facilitating the licensing arrangement.