So do you want to license your trademark? Here is a brief overview of some of the most important considerations when licensing a TM in Canada. Trademark licensing is a complex subject and this is not an exhaustive list. However, it does provide a brief summary of the requirements for the licensing of trademarks under Section 50 of the Canadian Trademark Act.
Although Trademark Law does not require a written agreement between the licensor and the licensee, it is always advisable to put your agreement in writing. An experienced Canadian TM lawyer with TM licenses can help you draft a watertight license agreement, one that meets all the requirements of Canadian Trademark Law.
It is important to ensure that the licensor is the actual owner of the registered trademark in Canada. The CIPO Trademark Registry lists the owners of all Canadian trademark registrations, so it’s fairly easy to verify ownership before entering into a license agreement. Also, if you are a sublicensee, you must ensure that both the licensee and the licensor allow your sublicense. The basic principle is that the license must be granted by the owner of the registered trademark in Canada.
When you are the licensor, it is important to ensure that you set meaningful quality standards that the licensee must strictly adhere to. You should also review the licensee’s activity to ensure that it complies with the terms of your license agreement. If they do not honor your written agreement, your trademark attorney may advise you to terminate the agreement entirely. This will demonstrate that you maintain direct control over the character, quality and use of the trademark in accordance with the Canadian Trademark Act.
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 also need to identify the owner of the mark. The reason for this is that Canadian law considers license agreements to weaken trademark registration (Canada only). This weakening of the distinctive character of a mark can sometimes result in the invalidation of the registered mark. For this reason, Section 50 of the Canadian Trademark Act requires the owner to retain control over his trademark to the extent the public is informed. That’s why you’ll often see the following language associated with a licensed trademark: “ACME is a trademark of ACME Company used under license by Jane Licensor”