Trademark Agreements


Contracts are very important in day to day running of a business. They form the governing principle between the parties to the contract. Contracts bind the parties to certain covenants and in case of breach of any of the terms, makes them liable to pay to the other party. One of the important things businesses must consider while dealing with IPR is to enforce Contracts relating to Trademarks, Copyrights, Patents, etc

What are trademark agreements?

A trademark agreement allows two or more parties to use the same or similar mark subject to conditions.

Are you a big Fan of Fast Food Joints?

If yes, then you would have probably tried a lot of food places? And amidst you would have also wanted to start one under the same brand name or been to places with the same name operating worldwide (Just like McDonald’s or Domino’s). Have you ever wondered how it is possible to run under the same name when the proprietor of the brand is one person or company? This is common across industries; they are able to use similar branding. That is where a trademark agreement finds its roots from.

A few examples of Trademark Agreements are

  • Trademark licensing agreement
  • Assignment deed
  • User Agreement etc.

What are the important terms in the Agreement

  • The duration of trademark use.
  • What products or services can be sold under the branding.
  • Any geographic restrictions on the use.
  • The compensation, or lack thereof, for trademark use.

What is a Trademark Assignment Agreement

Assignment of a trademark is the process where the ownership of the mark is transferred from one party (the registered or unregistered proprietor of the mark) to another party. The assignor (transferring party) transfers property rights in the mark to the assignee (receiving party). However, an assignment differs from a license, as a license is only the grant of permission to use a mark, but it does not transfer any rights of ownership and is associated with Technology Transfer Agreements (TTA).

Components of Trademark Licensing Agreement

  1. Nature of the business, goods, and trademark to be licensed.
  2. Details of the rights and obligations attached with such grant.
  3. Brief description of the Trademark- a combination of colors, words, device, any other representation pertaining to the trademark.
  4. Nature of license, details of the license, and other incidental points.
  5. term of the license and renewal guidelines
  6. termination policies
  7. liability in case of breach
  8. Payment Details
  9. Fixed fees for the duration of the agreement.
  10. Royalty fixed per unit of goods sold under the trademark.
  11. Royalty is fixed as a certain percentage of sales proceedings received for trademarked goods.
  12. Details such as governing law, dispute jurisdiction, severability, and other legal requirements of an agreement may be added to the agreement.

How to draft a trademark agreement?

There is no boilerplate format for a trademark agreement and it could go against the interest of the trademark proprietor. It is pertinent to note that the terms and conditions of any such agreement should deal with the specific situation. Indeed, trademark agreements vary widely in their scope and purpose. To be truly effective for both parties, a trademark agreement must be customized to meet their unique needs.

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