Profile information Member settings
Sign up Sign in

Make your Trade mark licence agreement

Get started

What is a trade mark?

A trade mark is a word, slogan, symbol, design or combination of these elements. It serves to identify and distinguish the goods or services of one party from others. The purpose of a trade mark is to prevent unfair competition by applying a test of consumer confusion and providing rights and remedies to the owner of the trade mark. For more information, read Trade marks and passing off. For more information on the trade mark registration process, read How to register a trade mark.

What is a trade mark licence?

A Trade mark licence is an agreement between the owner of the trade mark and another party, who is given permission to do something that would otherwise be an infringement of the owner's rights without a licence. The person granting the licence is called the 'licensor' and the person receiving the licence or exploiting the trade mark is called the 'licensee'.

How does licensing a trade mark work?

A trade mark licence permits the licensee to use the licensor's trade mark in connection with specific products or services in return for a fee. Although the terms of every license are different and may be freely negotiated between the licensor and licensee, all licences must at least include the following in order to be valid:

  • identification of the trade mark(s) that are the subject of the agreement

  • identification of the products/services with which the licensed mark may be used

  • the geographic territory in which the licensee may operate and sell its products/services

  • quality control provisions that set out clear standards as to the nature and quality of the licensed products/services

From the licensor's perspective, the quality control provisions in the licence are particularly important. This is because the licensee's products/services must meet a certain standard, otherwise, the value of the licensor's trade mark could be harmed.

What are the benefits of licensing a trade mark?


Licensing can broaden the reach of the trade mark into different markets.


By taking a licence, a business may tap into expertise it does not already have.

Competitive advantage

By acquiring a licence to use a trade mark, a business may obtain a competitive advantage over its competitors.


Licensing helps businesses work together to develop new products and services.

Increasing market penetration

An owner of a trade mark may license another business to sell in territories that the owner cannot cover.

When is licensing a trade mark not appropriate?

Licensing a trade mark may not be appropriate if it is licensed to businesses that might lessen its value. If you are seeking to license your trade mark, it is worth considering whether the quality of your brand will be affected by the goods it's being applied to. If you are looking to licence a trade mark, be wary that the trade mark to be licensed may be too weak (ie it may not be 'distinctive' enough). If a competitor could work around it and take away market share, it may not be worth investing in a licence. For more information on licensing trade marks, Ask a lawyer.

Ask a lawyer

Get quick answers from lawyers, easily.
Characters remaining: 600
Rocket Lawyer On Call Solicitors

Try Rocket Lawyer FREE for 7 days

Get legal services you can trust at prices you can afford. As a member you can:

Create, customise, and share unlimited legal documents

RocketSign® your documents quickly and securely

Ask any legal question and get an answer from a lawyer

Have your documents reviewed by a legal pro**

Get legal advice, drafting and dispute resolution HALF OFF* with Rocket Legal+

Your first business and trade mark registrations are FREE* with Rocket Legal+

**Subject to terms and conditions. Document Review not available for members in their free trial.