Licensing of trademark means, the owner of the trademark authorizes another person to use the trademark. The right to use the registered trademark is given through a Trademark licensing agreement.

1) Trademark Licensing helps the brand owner to grow his reach by partnering with others who are into similar businesses.

2) It helps well-established brands to earn royalty through licensing and maintaining the quality of products.

3) For small entrepreneurs getting a license to use large brands will provide large business opportunities.

4) Trademark licensing is the heart of Software and Pharmaceutical businesses

Brand Licensing Agreement is very crucial for business success and to reduce challenges and legal issues at a later stage. 

Key points to be included in the Licensing Agreement are:

1) Amount of royalty fee or percentage of revenues to be shared between parties

2) Geographical area within which licensee can use the brand

3) Possibility or restriction on sub-licensing of trademark

4) Quality control clause to ensure that the products sold by the licensee meet Licensor standards

5) Grounds for termination of Licensing Agreement

To keep things clear for both parties, the Agreement must be registered. Within six months of the date of the agreement, an application for registration for Trademark Licensing Agreement, need to be submitted to the Indian Trademark Department.

Licensing and Assignment of the trademark may seem similar but there is a lot of difference. Licensing of a trademark is permission given to use the brand name. An Assignment is transferring or selling of the trademark to others. Licensing is for a limited period of time.