What is a trademark license agreement?

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Written by Jan Buza

Co-founder of Trama

A trademark license agreement allows the licensee to use and/or earn revenue from the licensor's trademark. The licensee doesn't own or co-own the trademark. The use of the trademark is usually subject to fees called trademark royalties.

For the licensor, the agreement offers a chance to expand to new markets. On the other hand, the licensee can benefit from the already-established reputation of the trademark.

A trademark license agreement is not a franchise agreement. Although franchises do license the use of the trademark, franchise agreements are governed by different laws and will include sections going outside of the mere use of the trademark, i.e. how business operations of the franchise are going to be monitored.

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