Trade-Mark licensing

In today’s information and technology age, trade-marks are becoming increasingly the most valuable assets of company’s and businesses. As such, trade-mark licensing, including promotional or product licensing and franchise licensing, are effective tools for trade-mark owners to capitalize on such assets. Trade-mark licenses are therefore an effective tool to maximize brand exposure and revenue through use of a trade-mark by entities other than the trade-mark owner. If not done right, however, such licenses can also be disastrous if the respective rights of the parties are not clear and properly set out, and can in fact lead to potentially the loss of trade-mark rights and/or costly and time consuming litigation.

Section 50 of the Trade-marks Act permits trademark licensing in Canada, and provides that use by a licensee will, for all purposes of the Trade-marks Act, be considered use by the trademark owner, provided that the owner has direct or indirect control over the character or quality of the goods or services.

A trade-mark licensing agreement can be an invaluable tool in setting out the expectation of the parties while at the same time ensuring control mechanisms as to the use of the trade-mark by the licensee are in place. Use of a trade-mark by an unlicensed non-owner (even an affiliate or subsidiary) can inadvertently weaken the distinctiveness of a trade-mark. At Sodagar & Company, we recognize that the protection of your trade-marks is an integral part of your business and as such we can assist in the drafting of trade-mark licensing agreements to ensure that your objectives are met and control over the use of your trade-mark maintained.

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