So you want to license your registered trademark? Here’s a brief overview of some of the most important considerations when licensing a TM in Canada. Trademark licensing is a complex topic and this is by no means an exhaustive list. However, it does provide a brief outline of the requirements for trademark licensing under Section 50 of the Trademark’s Act Canada.
Despite the fact that the Trademark’s Act does not require a written agreement between a licensor and licensee, it is always advisable to put your agreement in writing. A Canadian TM lawyer experienced in TM licensing can help you draft a watertight licensing agreement – one that meets all of the requirements of the Trademark’s Act Canada.
It is important to ensure that the licensor is the actual owner of the registered TM in Canada. The CIPO trademark register lists the owner(s) of all Canadian trademark registrations, so it is fairly easy to verify ownership prior to entering into a license agreement. Additionally, if you are a sublicensee, you should ensure your sublicense is permitted both by the licensee and also by the licensor. The basic principle is that the license must be granted by the owner of the registered trademark in Canada.
It is important when you are the licensor to ensure that you set meaningful quality standards by which the licensee must strictly comply. You should also review the licensee’s activity to ensure that they are in compliance with the terms of your licensing agreement. If they aren’t in compliance with your written agreement, your trademark lawyer may advise you to terminate the agreement altogether. This will show that you are maintaining direct control over the character, quality and use of the registered trademark in accordance with the Trademark’s Act Canada.
Another requirement is that the licensee must clearly identify to the public that the TM is being used under license. In doing so, they will need to also identify the owner of the mark. The reason for this is that license agreements are seen by Canadian law as weakening TM registration (Canada only). This is weakening of a trademark’s distinctiveness can sometimes result in the invalidation of the registered trademark. For this reason, Section 50 of the Trademark’s Act Canada requires that the owner retain control over their registered trademark to the extent that the public is on notice. This is why you’ll often see the following language associated with a licensed registered trademark: “ACME is a registered trademark of the ACME Company used under license by Jane Licensor”