Types of Trademark Licenses

Choose rights first and a label second

A trademark license gives another party permission to use a mark within an agreed scope. The owner normally keeps ownership. An assignment transfers ownership; a coexistence agreement addresses how parties with their own marks can operate alongside one another. A coexistence agreement is not automatically a license.

Exclusive sole and non-exclusive licenses

An exclusive license commonly gives one licensee the defined rights and excludes others, including the licensor, within that scope. A sole license commonly allows one licensee while preserving the licensor’s own use. A non-exclusive license permits the licensor to grant rights to more than one licensee and ordinarily to continue using the mark.

Labels can be used differently in different contracts and jurisdictions. State expressly whether the owner may continue using the mark, whether more licensees can be appointed, and whether any existing license or reserved channel remains. Define products, services, territory, channels and term rather than relying on the word exclusive alone.

Other descriptions answer different questions

A merchandising license describes the permitted commercial activity, such as using a mark on specified products. It may be exclusive, sole or non-exclusive. A cross-border license describes territorial scope. Neither label creates a separate worldwide registration.

Registered and unregistered describe the status of the underlying mark. They do not determine whether a license is exclusive. Rights in an unregistered mark may exist in some jurisdictions, but the parties must check ownership, territorial reach and enforceability. Recordal requirements for a license vary by country; signing a license does not register the trademark.

Make quality control workable

The agreement should identify the nature and quality of the licensed goods or services and how the owner will supervise them. Practical provisions can include approved artwork, product samples, written standards, inspection rights, complaint records, corrective action and approval of advertising. The owner should exercise the agreed controls and keep records, not just insert a clause and ignore it.

For example, section 50 of Canada’s Trademarks Act addresses licensed use where the owner has direct or indirect control over the character or quality of the goods or services. Other jurisdictions have their own requirements and consequences. Obtain advice for the countries covered by the license.

Questions to resolve before signing

Which marks and owners are covered? What goods, services, countries and channels are permitted? Who else may use the mark? Are sublicenses allowed? How are payments calculated and checked? Who approves products and marketing? What happens after termination?

Example of a scope comparison

Teaching example only: one licensee may be permitted to use a specified logo on T-shirts sold through named Canadian stores for two years. The owner may reserve its own website sales. That reservation should be written into the grant; calling the agreement exclusive does not explain it by itself.

Conclusion

Choose a license by its operative rights, obligations and quality controls. Separate exclusivity from registration status, territory and product category. A clear agreement and actual oversight matter more than the label used on its cover.

Talk to our strategy advisor