Brand License

economic-dictionary

The trademark license is the agreement between the owner of a trademark and a company to use and exploit it in the market. In return, the owner receives a payment that is specified between the two or it is also possible to obtain a percentage of the profits that are achieved through the exploitation of the brand.

In other words, the trademark license is a pact by means of which a firm can make use of a certain trademark in the market.

The brand license is something that is regularly carried out in the business environment. Of course, it must be taken into account that putting this contract into practice does not mean that the owner loses his authority with respect to the brand, but rather that it allows the use of it, obtaining a certain profitability for it.

It is extremely important to draw up a contract that includes all the necessary issues for the exploitation of the brand by another company to be carried out effectively.

To carry out a trademark license, a series of relevant aspects must be taken into account. For example, the territory, the time of permanence in force that it is available and those articles that are related to it in particular.

What characteristics can a brand license have?

At the time of implementation and the agreement made by both parties, a series of elements must be taken into account to establish the contract. These are the following:

  • The trademark license can be given over part or all of the products that are related to it.
  • Another option that can be assessed when managing a brand license is the fact that it covers a specific territory.
  • The trademark license can also be given exclusively to a company, which will have the use only, or it can not give any type of exclusivity. In the latter case, several companies, including the owner, will be able to use and exploit the brand on the market. If it is offered exclusively, the owner will not be able to use it. If, on the other hand, exclusivity is not mentioned in full, you can use it for your own purposes and interests.

What is a brand license for?

The main objective of this license is to allow companies that are interested to carry out the exploitation of a certain brand through their articles.

The licensees may sell products identified with that brand in a specific territory and for a specific time.

In this way, the owner will obtain a profit from this transaction and the company (acquirer of the license) will enhance the visibility of the brand and will also obtain profits from the sale of these items.

It is important to have a registered trademark to carry out these types of agreements.

Trademark license example

There are companies that obtain great profitability thanks to the acquisition of the brand license of other businesses. For example, Lego, which is already a well-known brand of plastic block toys, has tried this option on numerous occasions. It has included images from other brands, such as The Simpsons, to captivate children.

What do you intend to achieve? Take advantage of the fashion of movies and cartoons for children to choose these toys. In this way, they improve their sales and increase their profitability.

Through the use of advertising and the association of both brands, they have a great impact on the market.

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