Trademark Licensing in India: Process, Registration, and Cancellation

Editorial Team
Last Updated
April 10, 2023

Trademark licensing is a popular practice by which trademark owners allow other entities to use their trademark in connection to specific goods or services. While the user only receives the right to usership of the mark in exchange for some kind of monetary compensation paid to the owner, the owner shall retain his exclusive right to ownership of the mark.

Trademark licensing can be beneficial for both the user and the owner of the mark. While the user can enhance the credibility and consumer base of his business by using a well known and established trademark, the owner on the other hand, can generate additional revenue and potentially expand the reach of his business’s brand to new consumers.

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However, it is important to note that trademark licensing involves complex legal procedures and a complete knowledge of such procedures is absolutely necessary before you get involved into it.

Legal Provisions for Trademark Licensing

Trademark licensing is legally permitted under Section 49 of the Trademark Act, 1999. According to this section, a registered trademark owner can grant a licence to another entity to use their trademark in connection to specific goods and services. However, for this, a written licensing agreement will have to be signed between both the parties. The agreement must include the following details:

Duration of the licence
Territory where the licence shall be valid
Quality control measures to ensure that products or services for which the licensed trademark shall be used meet the standards of the trademark’s owner
Royalty or compensation paid to the trademark owner in exchange for the licence

Trademark License Registration Process:

Once the licensing agreement is signed between both the parties, it will have to be registered with the appropriate authority. For this, the trademark owner must file an application to the jurisdictional Trademark Registrar. The application must include a copy of the licence agreement and details of the trademark’s registration. Once the application is approved, the trademark licence will be recorded in the concerned Trademark Registry.

Cancellation of Trademark License:

If a trademark owner wishes to cancel a trademark licence or revoke the usership rights given to the registered user, he must file a petition with the Trademark Registrar. The petition must include the grounds for cancellation, such as the failure of the licensed entity to comply with quality control measures or the expiration of the licence agreement. Once the petition is approved, the trademark licence will be cancelled by the Registrar, and the registered user will no longer have the right to use the concerned trademark.

Trademark Licensing in India presents a dynamic opportunity for trademark owners and potential users alike. By carefully navigating the legal provisions of the Trademark Act, 1999, and entering into well-drafted trademark licensing agreements, brand owners can expand their market presence and revenue streams. At the same time, aspiring entrepreneurs can enhance their brand image and gain consumer trust by associating with well-known and established trademarks. To unlock the full potential of trademark licensing in India, businesses must approach it diligently, seeking expert legal advice and ensuring compliance with the Trademark Act.

FAQs

Q1: What is trademark licensing in India, and how does it work?

Trademark licensing is a practice where trademark owners allow other entities and third parties to use their registered trademark for specific classes of goods or services in exchange for monetary compensation. The owner retains ownership of the mark while granting the usership rights to the licensed party. Trademark licensing in India is legally permitted under Section 49 of the Trademark Act, 1999, and requires a written licensing agreement between the parties for being effected.

Q2: What are the key details included in a trademark licensing agreement?

The trademark licensing agreement should include crucial details such as the duration of the license, the territory where the license is valid, quality control measures to maintain the standards of the trademark when in use by the licensee, and the royalty or compensation paid to the trademark owner in exchange for the license.

Q3: Is trademark license registration necessary in India?

Yes, once the trademark licensing agreement is signed, it must be registered with the Trademark Registry Office. The trademark owner should file an application with the jurisdictional Trademark Registrar in this regard, providing a copy of the license agreement and details of the trademark’s registration. Upon approval, the trademark license agreement can be executed legally without any hindrance or objection.

Q4: How to cancel a trademark license in India?

If a trademark owner wishes to cancel a trademark license or revoke the usership rights granted to the registered user, a petition must be filed with the Trademark Registrar. The petition should outline the grounds for cancellation, which could include non-compliance with quality control measures or the expiration of the license agreement. Upon approval of the petition, the trademark license will be canceled, and the registered user will lose the right to use the concerned trademark.

Q5: What are the benefits of trademark licensing in India?

Trademark licensing in India offers mutual benefits to both parties involved. For the user, it allows the use of a well-known and established trademark, enhancing the credibility and consumer base of their business. On the other hand, the trademark owner can generate additional revenue and potentially expand the reach of their brand to new consumers through licensing agreements. However, it is essential to be well-informed about the legal procedures and requirements involved in trademark licensing to ensure a successful and compliant arrangement.