You`ll find some provisions in most brand licenses. The following issues should be addressed in a licensing agreement: Insurance – This provision requires the policyholder to receive insurance in order to protect the donor from liability for claims against the taker and possibly to cover the inability of the policyholder to fulfil its obligations under the license agreement. Finally, trademark licensing agreements will have the same general provisions contained in business contracts that contain, among other things, the following provisions: description of the parties; the intention of the parties who brought them together in a legally binding contract; If there are other trade relationships created by the agreement; Current legislation and, if necessary, compensation; Limiting liabilities guarantees, etc. Goods or services, Duration and Territory – Identify the type of products or services that the licensee will offer under the brand, duration of contract and geographic area in which the marks are granted. In addition to identifying goods or services, licensed uses are often indicated. The agreement may indicate, for example. B, that the following uses are permitted: manufacturing, sale, promotion, distribution and/or advertising. In addition, the licensee may restrict or authorize the following distribution channels, stationary trade, Internet sales, wholesale or retail trade or sales, limited to certain stores or consumer categories. When establishing a trademark license, the key points are: the provisions of choice are preferred, as they offer some certainty as to the application of the license agreement. In addition, courts often impose the choice of litigation clauses as long as the forum has a reasonable and logical relationship with the parties and the license. Arbitration – If a dispute were to arise as part of the licensing agreement, it is common practice to ensure that the dispute is resolved through arbitration proceedings, as it is a low-cost method.
The clause will indicate whether the arbitration will be binding on the parties and what type of discharge will be obtained by the arbitration. Brand licensing agreements are very different in length and subtleties. Although many licenses have a similar structure, each license contains different details and clauses based on the products or services granted. While it is more common to license brands as service marks, licensing agreements may include products or services. In addition, licensing agreements are often federally registered trademarks, but unregistered trademarks may also be licenses. As far as registration is concerned, some countries retain the legal obligation to cover licensing agreements. The United States does not require a trademark license from the United States Patent trademark Office. Termination and right of appeal – This provision is contained in a licence to encourage parties to cooperate in the settlement of small disputes arising from the agreement. In the event of an infringement, the defaulting party will have the opportunity to remedy this deficiency within a specified period of time. If the defaulting party continues to violate the agreement, the uninjured party has the right to terminate the contract. Quality control – A detailed quality control clause is essential for a brand license. The control by the licensee is necessary, because the mark represents the reputation and goodwill of the owner.
Consumers rely on a brand owner`s reputation for the quality of goods or services when making purchasing decisions. It is typical for the licensee to recite that “any goodwill for the benefit of the licensee inures”. There are several elements of a trademark licensing agreement. The most important part of the agreement is to properly prove that the licensee continues to control the quality of goods or services sold in connection with the use of the trademark.