LAW RELATING TO TRADEMARK
A compressive law relating to trademark and its subsequent licensing was first passed in 1958. It has since amended many times. A trademark is essentially a picture, label, word or words, and includes a device, brand, heading, label, name, signature, numeral, shape of goods packaging or combination of colours thereof which are applied or attached to goods of a trader so as to distinguish them as his from similar goods of other traders and to identify them as his goods. It is the adoption of the use of trademark that gave it its title. Thus a trademark is a property right and the law protects that right. For example, the trade mark Lakme distinguishes the goods of Lakme, Unilever from that of Revlon. Similarly the word Lakme is a separate trade mark which distinguishes goods of Revlon.
TRADEMARK LICENSE AND TRADEMARK LICENSE AGREEMENTS
Trademark licensing is a mode by which the owner of trademark permits his brand name to be used by another party for commercial gain, in turn demanding royalty or / and profits share from said commercial gain. A trademark license agreement on the other hand is an agreement between a trademark owner (“licensor”) and another party (“licensee”) in which the licensor permits the licensee to use its trade mark. It is a form of written document, usually binding, specifying the scope of license. Drafting such agreements is a difficult task as the subject matter can sometimes be complicated. Even though such contracts are governed by provisions of the Indian Contract Act, due to trademarks being property of a parson, sometimes the Transfer of Property Act begins to apply. This though depends from case to case.
WHAT CONSTITUTES A WELL DRAFTED TRADEMARK LICENSE AGREEMENT ?
- Name of parties: details and permanent address of each party, namely the owner of trademark (licensor) and receiver or user of trademark (licensee).
- Description of trademark: exact description of the trademark as it stands on the date of the agreement, including a declaration that the licensor has agreed to permit the licensee to use the licensed marks and that the trade-mark is without any encumbrance and liability whatsoever.
- Grant of rights: that the licensor hereby grants to licensee, effective as of effective date, a perpetual, exclusive license to use and display the licensed marks within its line of business as mentioned.
- Exclusivity: whether the licensor permits the licensee to use the trade mark for one line of business or otherwise.
- Sublicensing: licensed rights granted to the licensee, maybe sublicensed to advertisers, distributors, vendors, suppliers and other persons, in order to further the licensee’s business or to one or more persons who run and are willing to accommodate the licensee’s business.
- Time duration and termination: duration of license and exactly when the licensor wants the agreement should be terminated, else the agreement may continue in perpetuity.
Preparing a comprehensive trademark license agreement is a complicated task as the agreement can sometimes be confusing. For the benefit of readers, we have on our site (https://www.evaluer.co.in/) a detailed trademark license agreement template that can be viewed and downloaded.