How is Trademark Licensing Beneficial for Your Brand?

If you own a trademark of a big brand, chances are that you would need trademark licensing. This is basically a merchandise agreement. You, as a trademark owner, can allow other parties to use your trademark in exchange for royalty.
It can be beneficial for you in terms of generating a stream of revenue for yourself. Also, it can help you potentially expand your outreach to the market. The process of trademark licensing needs to be well-thought-out and executed smartly. So, we’ll explain everything you need to know about it.

Related Article: The 5 Key Trademark Benefits

The Definition of Trademark Licensing

It’s the process through which the owner of a federal trademark grants another entity to use his/her trademark. The owner (or the licensor), allows the licensee to make and distribute specific products/services under the licensor’s trademark agreement.

The licensor receives a royalty, usually in the form of money or a percentage of all the sales the licensee makes. This compensation is referred to as consideration.

An interesting fact about trademark licensing is that the agreement doesn’t have to be in writing to be legally binding. However, a legal case which includes a documented licensing agreement is easier to resolve and less time-consuming. Hence, you must see to it that a trademark licensing agreement is signed by both parties with the date.

Related Article: The Trademark Searches: An Overview

What are the Different Trade Licenses?

There are some traditional types of trademark licensing agreements that different parties go for. Let’s take a quick look at them.

Exclusive License

This is an agreement where the licensee gains all the commercial rights of the trademark. Essentially, this is a transfer of ownership, but the usage is limited as per the licensing agreement. The licensee receives all the profits and incurs the losses as well.

Sole License

This agreement allows both the licensee and the licensor to use the trademark. However, the licensor cannot license the trademark to any other third parties. The specifics are governed by the terms and conditions of the agreement.

Non-Exclusive License

As the name suggests, this agreement allows a licensor to grant the license to as many licensee as he/she wants.

Related Article: Trademark Filing Process: A Complete Overview

Why You Should Consider Trademark Licensing?

Now, you are aware of what trademark licensing is and its different types. Let’s look at some of its benefits as well.

Expand your Outreach

If you get into an agreement with another entity, then you are getting a chance to tap into their share of the market. This will allow you to expand your customer base and ultimately, your business improves.

Raise Brand Recognition

This is a win-win situation for the licensor and the licensee. Both parties get a chance to increase the public’s awareness about their products. This presents both brands in a new light and helps them grow.

Ease on Workload

This agreement also gives you an ally in handling the workload. A carefully-drafted agreement will allow you to share the production and quality maintenance responsibilities with the licensee. This aspect needs to be well-balanced and carefully monitored. Any mistakes on the other party’s end can be detrimental for both brands.

Avoid Trademark Infringement Cases

Licensing a trademark also has another benefit. There can be a situation where one entity is accidentally infringing another entity’s trademark. In such a situation, legal actions often turn out to be time-consuming and draining in terms of money. Hence, a good solution is to talk about a licensing agreement such that both parties can seek a win.

Related Article: How do you Register a Trademark Logo?

Need a vigilant Monitoring Service? – The Trademark Watch Company

You know that a lot of your business rides on the brand name. That brand name needs protection in the form of trademarks. But that protection is not enough, and trademark monitoring is absolutely crucial. It is difficult to manage so many things at once. So it’s advisable to hire a professional to take care of this for you.

The Trademark Watch Company offers the widest and most flexible search coverage. To ensure this, we carry out all our searches manually, and not via computers. We also want to ensure that our prices are affordable without compromise on quality. Your satisfaction is our guarantee.

To make an inquiry, visit The Trademark Watch Company Services.

Other Related Articles:

How to Avoid Trademark Infringement Successfully?

Trademark Monitoring: Why is it Important for your Brand?

Why Trademark watching is Important?

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