licensing Flashcards
(10 cards)
what is a trademark licensing agreement?
an agreement in which the licensor allows a licensee to use its trademark, SPECIFYING TERMS AND SCOPE
what are the usual terms and scope of a trademark licensing agreement?
- product (and manufacture/sell/distribute/advertise?)
- territory
- market channel
- duration
- exclusivity
how many trademark licenses can cohexist?
multiple, they are an intangible good
advantages and risks of the licensor
advantages:
- more geographical presence
- monetize the trademark
- share risk
- strengthen popularity of the trademark
risks:
- brand reputation risk
- not being paid (no royalties)
- loss of control
- market confusion
!!!! when the trademark is not protected properly, it coul leag to consumer deception and over time TRADEMARK MAY BECOME INVALID if the owner does not do anything about it
advantages and risks for the licensee
advantages:
- more product offering
- acquire know-how
all by limiting costs!
risks:
- high licensing costs
- not enough business or time to recoup the investment
- management of unsold goods
terms and conditions of a licensing agreement
- Minimum fee;
- Royalties;
- Definition of a style guide;
- The request of a sample and of a final product before marketing;
- Quality control monitoring and auditing;
- Advertising and other costs connected to promotion;
- Exclusivity;
- Termination – Renewal;
- Management of the unsold;
- Infringement – Litigation.
what can a licensor doo against infringement?
- Cease and desist orders
- The order to collect goods from trade
- The order to destroy counterfeited products
- The order to destroy machineries
- Compensation for Damages
- Publication of the judgement
- Penalty payments
what can a licensor doo against a contract breacher?
- damages
- demand execution of the contract
The exhaustion principle and its limitations
exhaustion applies once the goods are palces on the market EU, with consent of the licensor
limitation on legitimate grounds:
selective distribution channel and the licensee is harming the brand’s reputation, also via variations or alterations of the product
risks of not doing anything against a licensee that is not complying witht the contract
If the licensor (trademark owner) does not do anything against the licensee that is using its
trademark without being compliant with the contract, she runs two risks:
* The risk of loosing MONEY and REPUTATION; and
* The risk of LOOSING the TRADEMARK for its ‘new’ misleading use
