Watson IP Group

Watson IP Group

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Can I Sell My Trademark or License It to Someone Else?

Yes. Generally, a Federal Trademark Registration can be licensed or can be sold to someone else.

By way of example, a trademark registration can be licensed to another party on an exclusive or a non-exclusive basis. And, such licenses can be complete, or can be restricted. For example, there may be a restriction on goods or services. There may also be a restriction on territory, such as a particular set of states or large cities versus small cities, or urban versus rural. There may be a restriction on the channels of trade, for example, big box locations, versus on-line retailers, or business sales versus home sales. Other restrictions are also contemplated in a license.

Our patent law attorneys think, that the most important thing in any license is to monitor the use of the licensee to insure that it meets the requirements of the owner of a trademark. In situations where the quality is not monitored can lead to a naked license situation, which, in turn, can result in the loss of trademark rights. Exercising adequate quality control is imperative with any trademark licensing agreement. Among other ways, some manners in which to exert the proper quality control can include (1) making sure that the contract specifies that the licensor maintains quality control over the licensee’s use of the trademark in association with the licensee’s goods and services; (2) set up a series of guidelines for the trademark licensee that address quality control, namely, that provide certain criteria that must be met by the licensee; and (3) set up regular inspections of the licensee and its facilities to insure that quality control is proper. The execution of the foregoing are very important to make sure that a naked license does not result.

When assigning a trademark registration, the assignment can likewise be in full or in part. The assignment must be in writing and it is best practice to record the assignment at the USPTO assignment branch. It is unbelievable, but true, that in many instances the item of most value is a trademark in a transaction. For example, in the late 1990’s Ford purchased Jaguar for a large sum. And, what Ford received was an antiquated design, poor employment agreements, poor facilities, outdated equipment, and obsolete engineering…..and the Jaguar trademarks. Of all of these, the only item of real value was the Jaguar trademarks. The same is often seen in bankruptcies or restructurings of major companies (i.e., Kodak, Polaroid).

There are also limitations on what can be done with trademark applications that are pending before the USPTO and that have not matured into trademark registrations. The trademark act specifies that a trademark application filed as intent to use is not assignable prior to the filing of an amendment to allege use or a statement of use. There are a couple of exceptions, such as when the assignment is to a successor to the business of the applicant, or portion thereof, to which the mark pertains, if that business is ongoing and existing. As one can imagine there are a number of circumstances that require closer review and scrutiny.

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