Licensing of Trademarks

A Trademark licensing is a practice by which a Trademark owner (the “licensor”) permits a third party (“the “licensee”) to use its Trademark and the third party uses that mark in connection with specific products or services. 

Though the assignment and licensing may seem somewhat similar, they are actually very much different from each other. In assignment the ownership of the trademark is permanently transferred from one person to the other. Once the Ownership rights are transferred under the assignment, it cannot be revoked. Whereas, in licensing, only certain rights are temporarily transferred for a particular period of time. In this basically the owner remains the same and only limited rights are transferred to another person.

The licensing is beneficial to both the licensor and licensee as it allows the licensor to extend brand awareness and to earn royalty and it allows the licensee to commercially exploit the mark. 

However, sometimes the licensing can also harm the brand of the licensor if it is left unchecked. Hence, Section 49 of the Trademarks Act mandates the provision of quality control in the licensing agreement.

While the registration of the licensing agreement is not mandatory, it is still advisable to register the agreement as it creates a record which can be used later in case some dispute arises between the parties. 

The procedure for registering for the licensing agreement is-

  1. Form TM-28 has to be filled in triplicate along with the licensing agreement, supporting affidavit, and such other documents as the registrar requires. This can be filed either online or offline.
  2. The Registrar can accept the application either completely or subject to some conditions or limitations. In case the registrar wants to impose some conditions or limitations then a notice will be issued to the applicant.
  3. After the issuance of the notice the applicants can apply for a hearing within one month of the issuance of the notice. In hearing the register can accept the application wholly or with conditions or can also reject it completely. The hearing has to be set within 2 months of the application for hearing applied by the applicants.
  4. If the applicants fail to apply for the hearing within one month, then the registrar will register the agreement along with conditions imposed by him.
  5. In case the agreement is registered the registrar will record the name of the licensee as a registered user and will also issue a notice to the other registered users, if any.
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