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  • Peter Kam Fai Cheung SBS

Trade Mark Licence

A trade mark proprietor of goods or services might like to generate revenue streams by granting licences to licensees to use its identifier such as name or logo etc on the licensees' goods or services. Riding on the goodwill of a licensed trade mark, a licensee might be able to generate revenue streams of its goods or services quicker. Trade mark licensing, if managed strategically, might generate further goodwill to a licensor and helps expand its market.

A trade mark licence recites the context, the relationship, and the exchange of considerations between a licensor and a licence. In the articles, they state the scope of the licence eg a non-exclusive, non-transferable, royalty payable licence with use, geographical (or internet), and time, limitations. A licensor may reserve its right eg to grant non-exclusive licences to a licensee's competitors.

A trade mark licence may require a licensee to acknowledge a licensor's trade mark ownership, including eg the goodwill generated by the licensee would vest in the licensor. A licensee's compliance with the expected quality standards, with laws and the obligation to notify infringements so as to protect the licensor's reputation and trade mark rights. A licensor may also require the licensee's reasonable governance eg due authorization, due execution, and no conflict with internal rules or public regulations.

A trade mark licence may stipulate the terminating conditions eg when there is a material breach of a licensee's obligations such as unauthorized sub-licensing. Miscellaneous items may include eg addresses for services. These are just some of the pro-licensor considerations that I would bear in mind if I was to grant a trade mark licence (eg my peterC series of common law marks) before instructing a lawyer to put pen to paper!

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