Trademark licensing allows a registered trademark owner to grant permission to another party to use the trademark. It provides benefits to both parties, allowing the owner to expand their business and the licensee to generate revenue with less investment. However, there is a risk that the licensee could exploit the trademark more successfully than the owner or that unauthorized usage could occur. Key principles for trademark licensing include source identification, where the trademark must be connected to the owner, quality control to preserve the brand's reputation, and connection in the course of trade to ensure quality control is maintained.

1. Trademark
Licensing
IMPORTANT POINTS TO REMEMBER

2. What is trademark licensing?
 Trademark licensing is the use of a registered mark by the registered
user or any person, having consent from the registered proprietor,
other than the registered proprietor or registered user having
connection in the course of trade in relation to the goods or
services.

3. Legal history of trademark
licensing:
 One of the drastic turnarounds caused by the introduction of the
new Trade Marks Act, 1999, repealing the old Trade Marks Act, 1958
was broadening the definition of the phrase ‘permitted use’. In the
new Act, the use of a registered Trade Mark is now permitted not
only by the registered user, but also by a third person who is
permitted to use the captioned registered Trade Mark with the
consent of the registered user.
 This in turn ensured trademark licensing in India.

4. Advantages of licensing:
 It is a win-win  Trade mark licensing  Licensing gives the
situation for both the helps companies or licensee opportunity
proprietor of the body corporate to to generate more
Trade Mark who has improve business revenue with less
already established operations and investment.
himself in the market presence
business arena (the and reputation.
licenser) and for the
person who might
be just a start-up
company (licensee).

5. Flaws in trademark licensing:
 But the main flaw in licensing would be that the licensee may end
up exploiting the Trade Mark more successfully and effectively than
the licensor and may receive better returns. It would be a huge
backlash on the licensor if he ends up losing his customers too.
 Also, there is a huge risk of unauthorized usage of the Trade Mark
once it is licensed.

6. Principles involved in trademark
licensing:
 Principle of ‘source identification’: This means that it is not permissible for
trademark owner, to allow by way of licensing to use his trademarks in
relation to goods not connected with him.
 Principle of ‘quality control’: The real purpose of trademark licensing is
that of distinguishing the goods and services of the owner from that
those of the competitors, which in turn ensures the quality of brand
being preserved.
 Principle of ‘connection in course of trade’: This in practise is the
enunciation of the principle of quality control by the courts, just
widening of its scope.

7. Thank You!!!