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The term “Licensing of Trademark” is not defined under the Trademarks Act, 1999.However, Trademark license simply means the permission granted by the owner of the trademark to a third person to use the mark in the course of trade without transferring the ownership of the mark. The licensing of the Trademark allows the registered proprietor to let others use the mark without assigning the ownership of the mark. The proprietor can also put other limitations on the use of the mark through the terms that he puts into the licensing agreement. For example, the proprietor may license a trademark to be used for only particular goods and services. Such a license is granted in consideration of a royalty.

Registration of a Trademark License

The registration of the license agreement is not mandatory. However, it is advisable to do so since it creates a record that becomes useful in the case of any dispute in the future. 

In the case of Himalaya Drug Co. Pvt. Ltd., Bangalore v. Arya Aushadhi Pharmaceutical Works, Indore, the Court ruled that if a company fails to prove that it is a registered user then the suit is liable to be dismissed. It is therefore always good to register the TM License with the Trade Mark Office. 

The process of Registration of a Trademark License is as follows:

• There should be an agreement between the parties which shall be in writing;
• The owner of the TM and the proposed user should together apply for registration (sec- 49) to the Registrar of the Trademarks jointly;
• The application is to be made in Form TM-U;
• An affidavit authenticated by the proprietor of the TM including the details of the license mentioning the following-

1. Relationship between the parties.
2. Duration of the use.
3. Goods/services for which it is applicable.

• The above mentioned documents are to be provided with the application in Form TM- U along with the prescribed government fees which is Rs.4500/- for each mark.

  Cancellation of Trademark License

A cancellation could be initiated by the proprietor or the registered user or any other registered user of the same mark. The circumstances which are permissible for cancellation are:

1. The violation of the written agreement.
2. The use of mark that cause deception/confusion.
3. Misrepresentation or non-disclosure of some material fact(s) by either of the parties.
4. If the circumstances have changed since the date of registration in such a way that at the date of such application for cancellation they would not have justified registration of the registered user.
5. That the registration ought not to have been effected having regard to rights vested in the applicant by virtue of a contract in the performance of which he/she is interested:

Any cancellation or any omission which the TM-O might make shall be notified to the other registered users who are inclined to be affected by such cancellation and also to the registered proprietor.

The official fee for filing an online application for cancellation is also Rs. 4500/- per mark.

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