Document
Index

Agreement of License between Trademark Owner and a Manufacturer

Updated on: Jun 20th, 2024

|

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:

  • Names and addresses of both the trademark owner and the manufacturer
  • Date of the agreement
  • A statement to ascertain the trademark owner and his rights with the product
  • Details of permission given by the trademark owner to the manufacturer (how many products, how many consignments, timelines, etc.)
  • Details of where the product will be produced and how much will it priced
  • A clause stating that product must contain the trademark owner’s name on it
  • A clause stating that the trademark owner will have the right to reject the product if it doesn’t meet the quality standard
  • A clause stating that though manufactured by another person, the ownership of the product will be with the trademark owner
  • Details of the royalty to be paid to the trademark owner
  • Contract timelines
  • The consequences of breach of contract (if it so happens) and the next course of action
  • The manufacturer’s registration details
  • The consequences of a dispute
  • Contract termination details

The agreement then has to be signed and approved by both the trademark owner and the manufacturer before it becomes legally valid.

inline CTA
Get an expert at affordable price
For ITR, GST returns, Company Registration, Trademark Registration, GST Registration
Can't get yourself started on taxes?
Get a Cleartax expert to handle all your tax filing start-to-finish
Help and support
close
Loading Chat ...
Chatbot LogoChatbot Button
summary-logo

Quick Summary

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.

Was this summary helpful?
liked-feedbackliked-feedback

Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

Cleartax is a product by Defmacro Software Pvt. Ltd.

Company PolicyTerms of use

ISO

ISO 27001

Data Center

SSL

SSL Certified Site

128-bit encryption