Updated on: Jun 20th, 2024
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2 min read
An agreement of license between a trademark owner and a manufacturer is an official document that states that the manufacturer of a product has the permission to manufacture the product by the company or the individual who has trademarked it. However, the trademark owner gets to choose the licensing terms of this agreement.
Let us understand the purpose of this document with an example: If ABC Industries wants to produce a simple mechanical component, which will be useful for a particular machine, but Mr. M already has the trademark licensing for that particular mechanical component. In this case, ABC industries will have to get into an agreement of license with Mr. M, and draft an agreement stating that ABC Industries only has the rights to produce the said mechanical component, for a said client, and in specific numbers only.
This agreement is a crucial piece of evidence – which is also valid in the court of law – to ensure that the trademarked component is not being copied and produced illegally.
Let us now take a look at the details included in this agreement:
The agreement then has to be signed and approved by both the trademark owner and the manufacturer before it becomes legally valid.
A license agreement between a trademark owner and a manufacturer specifies permissions for production. Details include names, permissions, production details, pricing, quality standards, royalty, dispute resolution, and termination clauses. Both parties must sign for legal validity.