There may be a number of payment options for licensing. The Trademark Act 1999 refers to “attribution” and “transfer” of trademarks and does not explicitly mention the “licence.” It is therefore relevant to understand that there are some fundamental differences between the transfer and licensing of trademarks. A transfer is a permanent transfer of ownership of a trademark, while the granting of licenses is a temporary transfer from certain rights to use a trademark. In addition, unlike orders, a license may be revoked. As a result, assignments result in a change of ownership in which the assignee becomes the owner of the trademark, unlike licenses for which limited rights are transferred to the licensee for a specified period of time. A trademark licensing agreement should include the following: A description of the parties should be proposed, the nature of their transactions and the ownership of the trademark to be granted. The category of goods/services is also to be mentioned. This agreement is essential evidence – which is also valid in the courts – to ensure that the protected component is not copied and manufactured illegally. Let`s understand the purpose of this document by an example: if ABC Industries wants to manufacture a simple mechanical component that will be useful to a particular machine, but Sir.M already has the brand license for this particular mechanical component.
In this case, the abc industries must enter into a licensing agreement with Mr. . M and develop an agreement stipulating that ABC Industries has only the right to produce the mechanical component in question for a customer in question and only in specific numbers. It is important to mention the exact duration of the license. After the term, it may be extended at the discretion of the parties. Trademark licensing is an effective practice for the regulated operation of the brand. It helps both the licensee and the taker to grow their respective businesses. In addition, it leads to the development of the brand image, the licensee being required to maintain a certain degree of control over the standard and quality of the goods and services it sells or supplies under the brand.
The contract must then be signed and approved by the trademark holder and the manufacturer before becoming valid. Let`s now take a look at the details contained in this agreement: the issuance of the license must be described in detail. It includes the type of license to use the mark, which should not be transferable. All licensing issues must be noted here. Details of the regular screening of goods and processes and the presentation of reports to the licensee, if requested by the licensee, must be recorded.