Trademark Licensing Lawyer

A trademark license is a contract in which the trademark owner grants another party the right to use the trademark under defined conditions: scope of use, territory, duration, quality standards, and royalty terms. You do not technically need a written license to license a trademark, but an undocumented or informal arrangement creates serious risk. Under US and Canadian trademark law, a licensor who cannot demonstrate quality control over how the mark is used risks having the mark declared abandoned through what courts call naked licensing. A written agreement with enforceable quality control provisions is the foundation of a legally sound license.

Naked licensing occurs when a trademark owner licenses the use of the mark without maintaining genuine quality control over the goods or services offered under it. Courts in the US and Canada have held that a license without real quality control severs the connection between the mark and the source it is supposed to identify, which can result in the mark being declared abandoned or invalid. A quality control clause in the agreement that is never actually enforced does not satisfy the standard. The naked licensing doctrine has been applied to invalidate well-established trademark registrations in both countries.

The law requires genuine, not merely formal, quality control. That means you need to actually monitor how the licensee is using the mark, not just include a clause in the agreement saying you can. Practical quality control includes inspection rights, approval of new uses of the mark, product or service standards documents, and some mechanism for reviewing compliance. The scope of what is required varies with the nature of the license and the industry. A licensing lawyer can help you design quality control provisions that are substantive enough to satisfy the standard and practical enough to actually exercise.

An exclusive license grants the licensee the sole right to use the mark in a defined territory or product category. The licensor cannot grant the same rights to others within that scope and typically cannot use the mark itself within it either, unless the agreement reserves that right. A non-exclusive license allows the licensor to grant similar rights to multiple parties simultaneously. Exclusive licenses typically command higher royalties and require more careful quality control structuring, because the licensor has less visibility into how the mark is being used across the market.

Yes. A single license agreement can cover both US and Canadian trademark registrations. The agreement must clearly identify which registrations are being licensed in which territory, define the royalty allocation between US and Canadian revenues, and include quality control provisions that apply to use in both markets. Royalty allocations between territories may also have tax implications depending on where the licensor and licensee are incorporated, which is worth addressing in the agreement or with a tax advisor.

Royalty structures vary by industry and the nature of the license. Common structures include a percentage of net sales (typically 2% to 10% depending on the mark's strength, the exclusivity of the license, and the industry), a flat annual fee, or a combination of a minimum royalty guarantee and a revenue percentage. Minimum royalty guarantees are standard in exclusive licenses to protect the licensor against under-exploitation. A trademark licensing lawyer can advise on market-rate royalty benchmarks for your specific industry and license structure.

A template can document the basic terms of a license, but it is unlikely to include the quality control provisions, breach and termination mechanics, and cross-border coordination that a trademark license actually requires. Naked licensing risk is not addressed by most generic contract templates. A poorly drafted license can create more legal risk than no written agreement at all if the quality control provisions are merely formal or if the scope of the grant is ambiguous. For a license involving a registered trademark and real business operations, a trademark lawyer is the appropriate drafter.

Yes. You can license rights in a trademark application or in an unregistered mark established through use in commerce. The license should describe the mark and clarify that it covers the pending application or common-law rights, depending on the status. If the application ultimately does not result in registration, the terms of the license need to address what happens to the licensee's right to continue using the mark. A license based on an unregistered mark carries more uncertainty than one based on a registered trademark.

The first step is reviewing the license agreement for the breach notice and cure provisions. Most license agreements require the licensor to give the licensee written notice of the breach and a defined period to cure it before termination rights are triggered. If the breach is not cured within the cure period, the licensor typically has the right to terminate the license. Documented breach correspondence is important: a breach that was noticed and tolerated without a written response is harder to act on later than one that was promptly addressed.

A trademark license grants the right to use the mark while the licensor retains ownership of the registration. The licensee can use the mark within the scope of the license, but the trademark remains registered in the licensor's name. A trademark assignment transfers ownership of the registration itself to the assignee, along with the goodwill of the business associated with the mark. After an assignment, the assignee is the registered owner. Unlike a license, an assignment does not require ongoing quality control, because the assignee is now the owner of the mark, not a licensed user of it.