6. Ownership of the mark in question is still held by the licensor and the licensee will not pass on the product in question as if he were the proprietor of that mark. A trademark license agreement is a document between the registered owner of a trademark and a proposed licensee. The agreement shall mention the conditions on the basis of which the licence is granted, the rights and control to be exercised by the parties; permitted uses/restrictions and other factors such as royalties and legal requirements. Trademark licensing has become a common practice, as it benefits both the licensor and the licensee. The licensor earns money through royalties, while the licensee can market the brand. In addition to the monetary benefits, the licensor also benefits from the growing reach and popularity of the brand. But if not controlled, licensing could also damage the brand`s reputation. It is therefore of the utmost importance to include in the licence agreement clauses relating to the quality control of goods or services. Article 49 of the Act provides that licensing agreements must indicate the degree of quality control.
The purpose of this provision is that a connection between the owner and the registered user is reflected in the licensed use of the trademark. In the case of UTO Nederland BV v Tilaknagar Industries Ltd1, the Bombay High Court held that the licence could have been revoked if the performance and the terms of the agreement indicated the existence of facts which do not involve quality control. In Bowden Wire v. Bowden Brake2 it was established that a trademark license loses its validity if there is no connection with the registered owner. In the famous Barcamerica case3, the Court held that the “naked and uncontrolled license” prevented the mark from acting as a symbol of quality, by appearing that the registered proprietor had abandoned the mark and, in such a scenario, he may be prevented from asserting his rights in that mark. A trademark must have different characteristics. If a brand looks like another brand, it can create confusion in the minds of consumers or the public. The similarity of a trademark can lead to unfair commercial practices. 5. The licensor shall have the right to refuse the delivered goods if they are not supplied in accordance with the specifications or specifications communicated to the licensee and, in the event of such a refusal, the licensee shall, at his own expense, remove the goods complained of from the licensor`s house and go up to such a distance at the licensee`s risk. . .