Trademark Licensing is required when a trademark owner/licensor authorises the licensee to use the mark for trade or business purpose in consideration of royalty. Trademark Licensing is governed by Trademarks Act, 1999. Trademark Licensing is different from Assignment where the ownership of mark is transferred without any restrictions of time and use. However, the license is granted for a certain period with some restrictions on use.
Procedure for Trademark Registration
The step wise process for registering a trademark has to be followed. Firstly, the application for trademark is filed at the trademark office for which an application number gets issued. Then an examination report is issued by the trademark office in order to invite objections pertaining to the trademark. In the event of no objections, four months’ time is provided to general public to raise oppositions, if any, At the end of four months’ period with no objections raised, the registration certificate is provided to the trademark owner. The trademark is required to be renewed every 10 years by paying renewal fees.
Another scenario is when objections are raised after the examination report is issued by the trademark office. If the objections don’t get supported through evidence, they get rejected. It is then followed by providing four months’ time to the general public or business rivals to raise objections.
However, if the objections are of potential nature, they are heard through trial with the introduction of substantial evidence and proof. If the objections get overruled, an advertisement is given in the trademark journal. It is further followed by a four months ‘period in order to invite through the general public any further objections. The registration certificate is granted once the fees is paid.
Procedure for Trademark Licensing
It is advisable to get the license agreement registered with the registrar of trademarks for the purpose of recordation. The application for recording the licensing of trademark has to be made within 6 months of such agreement to license. The licensor and the proposed Licensee are required to make a joint application to the registrar containing n agreement between the licensor and licensee regarding the licensing of trademark. The Licensor is also required to attach an affidavit containing the terms of license, restrictions pertaining to the usage of product licensed, relationship between the two parties etc., power of attorney in favour of the agents, if any. It is pertinent to mention here that any sale of the trademark within the license period leads to the cancellation of trademark license. Once all the documents are submitted, the registrar of trademark registers a trademark after taking care of some formalities of publishing in the trademark journal, issuing notice etc.
Attributes of Trademark Licensing
The registered user of a trademark or a licensee has the power to initiate infringement proceedings against the infringing party. However, the Licensee is not allowed to sell the trademark to a third party under any circumstances as the licensor does not assign the trademark but merely license. In the event of licensee not maintaining the quality standards of the goods pertaining to the trademark or non-adherence to any other terms of the licensing agreement, it can lead to the cancellation of trademark. It holds true even if the licensor fails to disclose any material fact regarding the trademark which is licensed. Any failure by either party brings serious repercussions as far as licensing is considered.
Trademark licensee or the registered user under a trademark licensing agreement is required to maintain certain quality control of the trademark. This is essential to keep the market reach stable in the changing business trends. There must be a clause regarding the degree of control which is going to be exercised by the licensor over the licensee so that no discrepancies arise at a future date.