Trademark Licensing

Trademark licensing covers the use of your brand mark (name, logo, or slogan), registered or not, by another business. Copyright and creative-content licensing cover the use of your original creative works: written content, photos, video, graphics, designs, music compositions, and recorded performances. Different IP types, different license structures, different commercial concerns. Copyright licensing for creators (rights in your photos, video, written work, designs, and other creative output) lives on the Creator Content Licensing & Monetization page. Music sync licensing (placement of recorded music or compositions in film, TV, ads, or social media) lives on the Sync & Master License Agreements page. If your deal involves both a registered trademark and creative content, this page covers the trademark portion and the creative-content page covers the copyright portion.

Trademark licensing covers the use of your registered brand mark by another business. Software and SaaS licensing covers the use of your code, platform, APIs, or technology stack. Different IP types with different license structures and different commercial concerns: uptime, support, data rights, integration scope, version-update obligations, and end-user terms. Software and SaaS license drafting and review lives on the SaaS & Enterprise Agreements page. If your deal involves both a software license AND a trademark license (for example, a SaaS product sold under your registered brand), this page covers the trademark portion and the SaaS page covers the software portion.

Trademark licensing covers the use of your registered brand mark by another business. Trade secret licensing covers the use of your confidential know-how, processes, formulas, or proprietary methods. Under 18 U.S.C. § 1839(3), information is a trade secret only if its owner has taken reasonable measures to keep it secret and it derives independent economic value from not being generally known or readily ascertainable through proper means, which makes the legal mechanics work differently: a trademark license publicizes the mark while controlling its use; a trade secret license shares confidential information while controlling its disclosure. Trade secret licensing and the NDAs that protect it live on the NDA & Trade Secret Protection page. If your deal involves both a manufacturing license that uses your registered brand AND your proprietary formula, this page covers the trademark portion and the NDA & Trade Secret page covers the confidentiality portion.

A trademark license grants the licensee permission to use your mark under defined terms while you keep ownership. A trademark assignment transfers ownership. We recommend checking first whether a contract you intend as a license contains terms that would transfer ownership. A registered mark, or a mark for which an application has been filed, is assignable with the goodwill of the business in which it is used, except that an intent-to-use application cannot be assigned before an amendment to allege use or a statement of use is filed, other than to a successor to the ongoing business to which the mark pertains; assignments must be by written instruments duly executed (15 U.S.C. § 1060(a)(1), (3)). An assignment is void against a later purchaser for value without notice unless the prescribed information reporting it is recorded at the USPTO Assignment Center within three months after the assignment or before the later purchase (15 U.S.C. § 1060(a)(4)).

Naked licensing occurs when a licensor does not exercise adequate quality control over its licensee's use of a licensed trademark (FreecycleSunnyvale v. Freecycle Network, 626 F.3d 509 (9th Cir. 2010)). Under 15 U.S.C. § 1127, a related company is one whose use of a mark is controlled by the owner with respect to the nature and quality of the goods or services, and under 15 U.S.C. § 1055 use by related companies inures to the benefit of the registrant, provided the mark is not used in a manner that deceives the public. Where a licensor fails to exercise adequate quality control, a court may find that the owner has abandoned the mark, and a registration can be cancelled at any time if the registered mark has been abandoned (15 U.S.C. § 1064(3)). In Eva's Bridal Ltd. v. Halanick Enterprises, Inc., 639 F.3d 788 (7th Cir. 2011), the Seventh Circuit affirmed a ruling that the owners had abandoned their mark by licensing it to a relative's bridal shop under an agreement that gave them no power of supervision over how the business was run.

An exclusive license gives one licensee the sole right to use the mark within the agreed scope, and even the licensor cannot use it for that purpose during the term. A sole license is a hybrid where only the licensor and one licensee may use the mark within the scope. A non-exclusive license lets the licensor grant the same rights to multiple licensees simultaneously while continuing to use the mark itself. The choice changes the per-deal price, the licensor's ability to layer additional revenue on top, and the negotiation leverage when termination questions surface later.

Common structures include flat fee, per-unit royalty, percentage of revenue, or hybrid (minimum guarantee plus percentage above the floor). Audit rights let the licensor verify reported revenue against actual sales records; we recommend negotiating them carefully. A most-favored-nation clause in a licensee's favor entitles that licensee to terms at least as favorable as those the licensor later gives other licensees, and minimum-royalty floors protect the licensor against an underperforming licensee. The right structure depends on the licensee's business model, the licensor's portfolio strategy, and whether the deal is one-off or part of a broader licensing program.

An inadvertent franchise is a trademark license that meets the legal definition of a franchise without the parties intending to create one. Under the FTC Franchise Rule, 16 C.F.R. § 436, a franchise is a continuing commercial relationship, whatever it may be called, with three elements: the licensee obtains the right to operate a business, or to offer, sell, or distribute goods or services, identified or associated with the licensor's trademark; the licensor will exert or has authority to exert a significant degree of control over the licensee's method of operation, or provides significant assistance in it; and, as a condition of obtaining or starting the business, the licensee makes or commits to make a required payment to the licensor or its affiliate (16 C.F.R. § 436.1(h)). Under 16 C.F.R. § 436.8(a)(1), the Rule does not apply if the franchisor can establish that the total of required payments, or commitments to make a required payment, to the franchisor or an affiliate, made from before to within six months after the franchisee's business begins operating, is less than US$735. Where the Rule applies, failing to furnish the required disclosure document at least 14 calendar days before the prospective franchisee signs a binding agreement or makes any payment is an unfair or deceptive act or practice in violation of Section 5 of the FTC Act (16 C.F.R. § 436.2(a)). We recommend a franchise-trap audit before signing any trademark license.

Yes, if the licensor actually controls quality. In FreecycleSunnyvale v. Freecycle Network (9th Cir. 2010), the court asked whether the licensor (1) retained contractual rights to control the quality of the use of its trademark, (2) actually controlled the quality of the trademark's use, or (3) reasonably relied on the licensee to maintain quality, and held that a licensor that showed none of these had engaged in naked licensing and abandoned its marks. The USPTO's Trademark Manual of Examining Procedure at TMEP § 1201.03 treats use by a related company as use by the registrant only when the licensor controls the nature and quality of the goods or services. Without that control, the use does not inure to the licensor's benefit, which can cancel the registration on a Section 14 cancellation petition.

Co-branding is when two brand owners cross-license their marks to each other so a single product or campaign carries both marks (think Doritos Locos Tacos, BMW with Louis Vuitton luggage, athlete-brand fashion collaborations). A regular trademark license is one-directional: the licensor grants rights to a licensee. A co-branding cross-license is bilateral: each party is both a licensor and a licensee, which doubles the quality-control complexity and creates joint-IP questions about anything created during the partnership. Termination provisions and post-termination brand-use rules are the highest-stakes clauses in a co-branding agreement; without them, the partnership ending becomes a fight over who keeps what.

Yes, but a US trademark registration only covers use in the United States. Registration in each country where the licensee will use the mark can be obtained through direct national filings or through the WIPO Madrid Protocol, which lets you designate multiple Madrid System members from a single international application based on your US application or registration. The license itself can be drafted as a single agreement covering multiple jurisdictions; enforcing the contract between the parties is a separate question from enforcing the licensed trademark rights against third parties, which depends on the rights the licensor holds under each country's law (Paris Convention, art. 6(3)). In the US, a trademark can be recorded with U.S. Customs and Border Protection only if it is registered (other than on the Supplemental Register) and the registration is current (19 C.F.R. § 133.1(a)); other countries set their own customs rules.

The remedy depends on what the license agreement says, which is why the termination, cure-period, and quality-control clauses get drafted with this scenario in mind. A well-structured license gives the licensor immediate notice rights, a defined cure period for fixable breaches, and termination-on-notice for serious violations like brand-disparaging conduct or failure to meet quality standards. Post-termination obligations should require the licensee to immediately stop using the mark, destroy marketing materials, and cooperate with de-branding efforts. If the licensee refuses or the breach has already harmed the brand, the next step is a demand letter scoped to the breach and the harm, and any litigation track that becomes necessary is scoped separately.