Commercialising a trade mark can generate substantial revenue for a trade mark owner, particularly if the trade mark is registered. The two main ways to commercialise a trade mark are via a licensing arrangement and by assignment.
Licensing a trade mark
Licensing a trade mark to a third party means that the trade mark owner is consenting to a third party (licensee) using their trade mark. A licensee’s use of a trade mark is usually documented and governed by a licensing agreement between the trade mark owner and the party to be licensed to use the trade mark.
A licensing agreement will set out the terms upon which a licensee may use a trade mark. It typically includes terms that address:
- the length of time that a licensee may use the trade mark for (e.g. five years);
- whether or not the licence is exclusive or non-exclusive;
- how the trade mark may, or may not, be used (e.g. in relation to t-shirts and sunglasses only);
- the territory in which the trade mark may be used (e.g. Queensland or Australia);
- the payments that a licensee must make to the trade mark owner for using the trade mark (this may be a fixed annual amount, a royalty or a combination of these); and
- how either party may terminate the licensing arrangement.
Assigning a trade mark
Since a trade mark is classified as being personal property, it may be assigned from one party to another. This means that a trade mark may be gifted or sold. In these circumstances, the trade mark owner would completely relinquish their rights in relation to the trade mark. Put simply, assigning a trade mark means that you are transferring ownership of it.
A trade mark assignment must be in writing and should be recorded on the Trade Marks Register. This is so that proof of ownership of the trade mark is clear and a matter of public record.
Regardless of how a trade mark is commercialised, it’s important to first apply to register it, as a trade mark. This is because the asset to be commercialised (the trade mark) will become more secure and valuable, once it becomes registered.
Talk to us today about commercialising your trade mark. Send us an email via the form on this page or book a free consultation.