Trademark Licensing refers to authorizing the use of the concerned trade mark by another party and rights in relation thereto. Authorizing a third party for using the trade mark is tenable on receipt of “royalty” in exchange for such use.
Thus, Trade Mark Licensing refers to the mode of transfer of rights wherein the actual proprietary rights in the trademark vests with the trademark owner and only few stipulated rights to use the trademark is given to a third party. Trade Mark Licensing in India is governed by the Trade Marks Act, 1999. Though the term Licensing/ license is nowhere used in the Act, the statutory provisions in the Act governing trade mark licensing in India refers to the provisions relating to “registered users.” It would be relevant to mention that recordal of permitted use is voluntary, however it is advisable that the Registered User Agreement/ License Agreement be registered with the Registrar of Trade Marks. The application for recordal of the said license agreement should be made within six months from the date of such agreement.