Trademark Licensing for Growth
A trademark licensing is mainly an agreement between the owner of the trademark also called as ‘licensor' and the business entity or an individual which can be called as ‘licensee'. In this the licensor grants permission to the licensee for using a trademark in concern with a particular product or services. Although there is no provision of getting the trademark licensing in written but it is highly recommended that one should get it in written and both the parties should sign it. Trademark licensing has been recognized under law by mist of the countries but some countries are not favor of companies licensing their products. These trademarks are like intellectual property, it's a unique sign may be a logo, slogan, phrase or image or might be a combination of any of the two. Furthermore these trademarks go along with a superscript where “TM” stands for trademark; “SM” stands for service mark and encircled “R” for registered. These trademark licensing are quite similar to copyright but they last only for a limited period of time.
GRANTS RIGHTS
Generally, a business or trademark licensing owner grants their license to licensee with respect to the field where they lack expertise or lack of funds. This is done to maximize the cost of the right that has been granted to the licensee. On buying a license, the buyer or the licensee guarantees that the particular symbol or the property will gain profit and people will buy them. The licensee gets an opportunity to grow because they are associated with an already existing brand name and can give competition to its competitors. The owners perform trademark licensing as they receive royalties for each and every product. Moreover the licensor can grow its name and explore new boundaries. The brand name reaches worldwide where all the efforts are being done by the licensee. There is no doubt that trademark licensing for growth is not a myth.
MARKET PENETRATION
Today, trademark licensing is a way to enter the international market. It can give a company a right to sell or produce another company's product and it can be done in foreign countries as well. It is a general process where the risk factor revolves around the licensee, they take the risk of investment and manufacturing and then finally delivering it to the customers. The trademark licensing owner will receive royalty for each unit that has been produced and sold. It will definitely profit both the licensee and the licensor. The licensor had very little to invest but it gives a chance to grow as an international company.
SERVICE INDUSTRY
Trademark licensing has also benefited service industry. Hospitality industry and airlines industries enter into such agreements when they need an expansion into the global market. It is the fastest way of growing and gaining some potential development. It is said that well planned trademark licensing agreement can be a win-win opportunity for both the parties that is the licensor and the licensee and even for general public. Many a times a minor mistake of licensee can ruin the reputation of licensor; trademark licensing is like a business and it should be done very carefully. An owner always has pride in it product and the licensee should maintain the goodwill of the company and its reputation. Trademark licensing for growth is a policy that has been widely adopted and people are still following it to achieve success in their own respective fields. Trademark licensing is the most effective way to gain popularity of a particular brand and increase the revenues. Special care should be taken while choosing the licensee else it can have adverse effects on the reputation of the brand name. Just make sure that you get trademark licensing agreement made from someone who is an expert in this field rather than from an ordinary lawyer. Many important clauses have to be mention in an agreement for which your lawyer have to be sound of all rules and regulation of your country as well as of the location for which the license is granted. It should be taken care that the trademark licensing agreement is designed to uphold the integrity and worth of the trademark. The licensor must select the manufacturer or the license that has similar goals and effective management infrastructure that can suit the brand and keeps the brand name high.
QUALITY CONTROL
Quality control is the most important provision of trademark licensing. It is so simple to understand that its only quality checks that can protect the reputation of a licensor and the licensor must meet those standards. If the licensor doesn't exercise control over the trademark then it wouldn't attract many licensee and if too much control is maintained then the licensor might have to bear unnecessary liabilities. So special care should be taken so that the buyer or the licensee is able to operate and live up to the expectations of the trademark licensing. Both the parties can only grow if the product they are dealing in is high in quality and appreciated by the consumers. If the licensee is not able to deliver appropriate product in the market there would be any profit to them neither will the licensor get any royalty. The worst effect will be on the brand name and the conditions on the trademark licensing will not be fulfilled. One must remember that trademark licensing is of certain duration, it is like a contract. Licensing a product doesn't mean that the ownership gets transferred to the licensee it is just the right of the mark and that to for a particular duration mentioned on the agreement. As the trademark licensing gets over, the licensed rights revert back to the licensor. The termination of trademark licensing means end of licensee's right over the licensed subject. Licensee expects maximum growth and opportunities to come to them through the brand name they have been associated with. The contract clearly mentions that it is the responsibility of licensee to achieve the targets as early as possible and should pay the royalties to the licensor with regards to the licensed property. Trademark licensing is a perfect gateway for growth but one should be careful about making an agreement and help from expert can help you avoid the risks involved.
CONTACT
Contact Paul Cookson at 416.286.2860.
