Trademark Licensing Agreement Template

Below is a detailed trademark licensing agreement template, including optional clauses. Each clause is explained in simple terms to help understand its purpose and implications.

Trademark Licensing Agreement
This agreement is made on [Date] between:

• [Licensor’s Name], having its principal place of business at [Address], (hereinafter referred to as the "Licensor"), and
• [Licensee’s Name], having its principal place of business at [Address], (hereinafter referred to as the "Licensee").

The Licensor owns the trademark [Trademark Name], registered under number [Registration Number] in [Jurisdiction] (hereinafter referred to as the "Trademark"). The Licensor agrees to grant, and the Licensee agrees to accept, a license to use the Trademark under the terms and conditions set forth below.

1. Grant of License

The Licensor grants the Licensee a [non-exclusive / exclusive] license to use the Trademark for the production, distribution, and sale of [specific goods/services] within [defined territory, e.g., Germany, Europe, worldwide].

Explanation:

• Exclusive License: The Licensee has sole rights to use the Trademark in the defined territory; the Licensor cannot license it to others or use it themselves.
• Non-Exclusive License: The Licensor can grant the same rights to others.

2. Term and Renewal

This agreement is valid for a period of [number of years, e.g., 3 years], commencing on [Start Date] and expiring on [End Date]. The agreement may be renewed for additional periods upon mutual consent in writing.

Explanation:

• Specifies the duration of the agreement and renewal conditions.
• Optional: Include automatic renewal clauses, subject to performance or other conditions.

3. Territory

The Licensee may use the Trademark exclusively within [specific geographic region].

Explanation:

• Limits where the Licensee can use the Trademark.
• Optional: Define regions precisely, especially for cross-border agreements.

4. Royalty Payments

The Licensee agrees to pay the Licensor:

1. A one-time license fee of [amount], and/or
2. Royalties of [percentage, e.g., 5%] of net sales of goods/services bearing the Trademark, payable on a [monthly/quarterly] basis.

Explanation:

• Defines financial terms, including upfront fees and ongoing royalty payments.
• Optional: Include minimum royalty guarantees to ensure fair compensation for the Licensor.

5. Quality Control

The Licensee agrees to:

• Maintain the quality standards set by the Licensor for all goods/services bearing the Trademark.
• Provide samples of products for approval by the Licensor before production.

Explanation:

• Ensures the Licensee maintains the brand’s reputation by adhering to quality standards.
• Optional: Specify procedures for quality checks.

6. Trademark Ownership

The Licensee acknowledges that:

• The Trademark is the exclusive property of the Licensor.
• The Licensee will not claim ownership of the Trademark or register it in any jurisdiction.

Explanation:

• Protects the Licensor’s ownership rights and prevents the Licensee from misusing or claiming the Trademark.

7. Reporting and Auditing

The Licensee agrees to:

• Submit detailed sales reports [monthly/quarterly] to the Licensor.
• Allow the Licensor or an authorized auditor to inspect financial records related to the sale of goods/services bearing the Trademark.

Explanation:

• Ensures transparency in royalty calculations.
• Optional: Include penalties for late reporting or inaccuracies.

8. Indemnification

The Licensee agrees to indemnify and hold the Licensor harmless from any claims, damages, or liabilities arising from the Licensee’s use of the Trademark.

Explanation:

• Protects the Licensor from legal or financial risks due to the Licensee’s actions.
• Optional: Include limits on liability.

9. Termination

This agreement may be terminated:

1. By either party with [number of days, e.g., 60 days] written notice.
2. Immediately, if the Licensee breaches the terms of this agreement or damages the reputation of the Trademark.

Explanation:

• Specifies conditions under which the agreement can be ended.
• Optional: Include provisions for resolving disputes before termination.

10. Dispute Resolution

Any disputes arising under this agreement shall be resolved through [negotiation, mediation, arbitration, or litigation] in the courts of [jurisdiction].

Explanation:

• Defines how disputes will be handled and the governing law.
• Optional: Include arbitration clauses for faster resolution.

11. Optional Clauses

11.1. Sub-Licensing

The Licensee may [not / only with prior written consent] grant sub-licenses to third parties.

Explanation:

• Allows or restricts the Licensee’s ability to license the Trademark to others.

11.2. Confidentiality

Both parties agree to keep all terms of this agreement and related business information confidential.

Explanation:

• Protects sensitive information shared during the licensing arrangement.

11.3. Force Majeure

Neither party shall be liable for failure to perform due to events beyond their control, such as natural disasters or governmental actions.

Explanation:

• Protects both parties in case of unforeseen events disrupting the agreement.

Signatures

Licensor:
[Name]
[Signature]
[Date]

Licensee:
[Name]
[Signature]
[Date]

Summary of Clause Benefits

1. Grant of License: Clearly defines the rights granted to the Licensee, avoiding misunderstandings.
2. Quality Control: Maintains the brand’s reputation by ensuring product/service standards.
3. Royalty Payments: Establishes fair compensation for the Licensor.
4. Termination: Protects both parties by setting clear conditions for ending the agreement.
5. Optional Clauses: Adds flexibility for unique business needs, such as sub-licensing or force majeure events.

This template provides a strong foundation for a trademark licensing agreement and can be customized for specific business situations. It is advisable to consult a trademark lawyer to tailor the agreement to legal requirements and business objectives.