Trademark Licensing

A strong trademark is more than a legal asset. It represents the trust, recognition, and reputation your brand has earned in the marketplace. Trademark licensing allows you to extend that value by authorizing another party to use your mark in connection with their goods or services, creating new revenue streams and expanding your brand’s reach without the overhead of doing it all yourself.

Whether you are looking to start a new business, expand into new territories, launch a franchise, or explore co-branding opportunities, a well-structured trademark licensing agreement can be one of the most effective tools for achieving those goals. At Lambert Shortell & Connaughton, we help both licensors and licensees navigate the legal complexities of trademark licensing to ensure their interests and their brands are protected.

A trademark licensing agreement is a formal arrangement between the owner of a trademark (the licensor) and another party (the licensee) that grants the licensee permission to use the mark in exchange for an agreed-upon payment, typically a royalty or licensing fee. The licensor retains ownership of the mark while the licensee gains the right to use it under specific terms and conditions.

Unlike other forms of intellectual property, trademark rights carry a unique obligation. Because a trademark signals to consumers that goods or services come from a particular source and meet a particular standard of quality, the licensor must maintain meaningful control over how the mark is used. This is not optional. It is a legal requirement.

A license that lacks adequate quality control provisions is known as a “naked license,” and it can have serious consequences. Courts have found that naked licensing can result in the abandonment of trademark rights altogether, meaning the licensor could lose the ability to enforce the mark against anyone, not just the licensee. Every trademark licensing agreement we draft includes clear quality control standards, inspection rights, and compliance obligations to protect the integrity of our clients’ brands.

Franchising is one of the most common and recognizable applications of trademark licensing. In a franchise arrangement, the franchisor licenses its trademark, trade dress, and business system to franchisees who operate under the brand in their local markets. The franchise agreement typically governs everything from how the mark is displayed to the operational standards the franchisee must follow.

Franchise agreements involve additional legal considerations beyond a standard trademark license, including compliance with federal and state franchise disclosure laws. Our attorneys help clients structure franchise and trademark licensing agreements that satisfy these regulatory requirements while building a framework for consistent, scalable brand expansion.

A well-drafted trademark licensing agreement addresses a number of critical terms. These include the specific marks being licensed and the goods or services they may be used in connection with, the geographic territory covered by the license, the duration of the agreement and renewal terms, the royalty structure and payment schedule, quality control standards and the licensor’s right to audit or inspect the licensee’s use of the mark, restrictions on sublicensing, provisions for termination and what happens to existing inventory and materials bearing the mark after termination, and indemnification and liability protections for both parties.

Each of these terms must be carefully tailored to the specific business relationship. A licensing agreement for a consumer product brand entering a new regional market looks very different from one governing a technology company’s co-branding partnership. Our attorneys work closely with clients to understand their business objectives and draft agreements that reflect the realities of their particular arrangement.

When licensing a trademark across borders, the agreement must account for the fact that trademark rights are territorial. A U.S. trademark registration does not grant rights in other countries, so a formal licensing agreement is only enforceable in jurisdictions where the mark is also protected. If your trademark is not registered in the country where your licensee operates, you may have no legal basis to restrict how the mark is used there.

This makes international trademark registration a critical prerequisite to any cross-border licensing strategy. International licensing agreements also need to address local regulatory requirements, currency and payment terms, language and translation provisions, and dispute resolution mechanisms that account for jurisdictional differences.

Through our worldwide network of associates, Lambert Shortell & Connaughton helps clients secure trademark protection in their target markets and draft international licensing agreements that comply with the legal requirements of each relevant jurisdiction.

Even well-drafted licensing agreements can lead to disputes. A licensee may exceed the scope of the license, fail to meet quality standards, or continue using the mark after the agreement has been terminated. In these situations, prompt enforcement action is essential to protect the licensor’s trademark rights and prevent consumer confusion in the marketplace.

Our attorneys have experience handling trademark disputes through proceedings before the Trademark Trial and Appeal Board (TTAB) as well as federal litigation. Whether the issue involves a breach of a licensing agreement, unauthorized use of a mark, or a challenge to the validity of a registration, we work to resolve disputes efficiently and protect our clients’ brands.

Trademark licensing is often most effective when it is part of a comprehensive intellectual property strategy. Many licensing arrangements involve not just trademarks but also patents, copyrights, trade secrets, and proprietary technology. In these situations, the licensing agreement may need to address multiple forms of IP in a single contract, ensuring that all rights are properly allocated, protected, and monetized.

Our attorneys help clients evaluate their full IP portfolio and develop licensing strategies that maximize value while managing risk across all categories of intellectual property.