Transferring and Licensing a Trademark

The legal framework

Licensing and assignment are the two main ways a trademark earns its keep. A licence lets someone else use the mark for payment while the owner keeps ownership. An assignment transfers ownership, often as part of a larger transaction. Both should be recorded properly to have their full effect.

Assignment. Under Article 20 of the EU Trade Mark Regulation (EU) 2017/1001, an EU trade mark may be transferred for some or all of the goods and services. The transfer of the whole undertaking includes the mark unless the parties agree otherwise. Other assignments must be in writing and signed by the parties, otherwise they are void. Until the transfer is entered in the register, the new owner cannot invoke the rights from the mark. Assignments of Benelux trademarks are governed by the Benelux Convention on Intellectual Property (BCIP) and are recorded at the Benelux Office for Intellectual Property (BOIP), where a transfer has effect against third parties only once recorded.

Licence. Under Article 25 of the same Regulation, an EU trade mark may be licensed for some or all of the goods and services, for the whole or part of the Union, on an exclusive or non-exclusive basis. A licensee may bring infringement proceedings only with the proprietor's consent, unless it holds an exclusive licence and the proprietor, after formal notice, does not itself bring proceedings within an appropriate period. A licensee may intervene in proceedings brought by the proprietor to obtain compensation for its own loss. On request of one party, the licence is entered in the register and published. The Benelux rules in the BCIP provide for licences and their recordal in much the same way.

Use and quality. Use of the mark with the proprietor's consent, including by a licensee, counts as genuine use for the purpose of maintaining the registration. But a mark that becomes liable to mislead the public as a result of the proprietor's or licensee's use, for example about the nature or quality of the goods, can be revoked. This is why quality control belongs in every trademark licence.

Customs. Under Regulation (EU) No 608/2013, a rights holder can lodge an application for action with customs, so that goods suspected of infringing its trademark can be detained at the border. The application is made per right and territory, and it relies on up-to-date registrations.

In practice

Why recordal matters

A recordal links the deal to the register. A recorded licence strengthens the licensee's position and gives public notice. A recorded assignment makes the register show the true owner, so that the new owner can oppose, renew and enforce without friction. A common problem in due diligence is a chain of unrecorded transfers, which have to be cleaned up before a sale.

Get the agreement right first

A recordal only formalises what the agreement says. The terms need to be sound first: scope, exclusivity, territory, quality control and term. Those structural choices are covered in licensing agreements. Confidential commercial terms, such as royalty rates, do not have to be placed in the register. A short-form licence or a certificate usually suffices for recordal purposes.

Keeping records up to date

Renewal dates, licence terms and the customs recordal all need to follow the registration. A register of the contract's duties, such as quality inspections and reporting, helps the owner keep control during the licence.

An example

A Mechelen food company sells its second-tier brand to a larger group and licenses a third brand to a distributor in France. The assignment is signed in March, but nobody records it. A year later, a competitor files a similar mark and the new owner, as yet not recorded, finds it cannot oppose without first completing the recordal. The licence to the French distributor is recorded, so the distributor can show its rights to a marketplace that questions its use of the brand.

Frequently asked questions

What is a licence recordal?

A formal entry at the IP office linking a licence to the registration. It gives public notice and can strengthen the licensee's ability to act against infringers.

What is the difference between licensing and assignment?

A licence grants use while you keep ownership. An assignment transfers ownership permanently, usually in a sale or restructuring.

Must an assignment be in writing?

For an EU trade mark, yes, signed by the parties, unless it results from a transfer of the whole undertaking or from a court order. In practice a written deed is always advisable.

Can the licensee sue infringers?

Only with the proprietor's consent, or as an exclusive licensee if the proprietor fails to act after formal notice. The licence should say who enforces and who pays for it.

How this connects

Transferring and licensing a mark is part of our trademark licensing service. We draft the licence with our Document Studio and follow quality, reporting and renewal duties through the rights and obligations register. For the licence terms, see licensing agreements.