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Trademarks are a form of Intellectual Property that refers to marks that are capable of being graphically represented and can distinguish one's goods or services from that of others. Just like the rights of an owner over any other property, tangible or intangible, the owner of a trademark can also transfer the rights he holds by either renting or assigning them to someone else. In India, it is the Trademarks Act, 1999 which protects and governs the Trademark law. Whenever it comes to transferring the rights held by the owner of a trademark, there are two terms which are necessary to be understood; assignment and licensing. Both of them are often confused for being synonymous but in reality, they differ a lot.


In India, assignment of trademark refers to the transfer of ownership from the owner to some other entity whether along with or without the goodwill of the business. The assignment of the trademark is generally for a perpetual period. Licensing of the trademark, on the other hand, refers to allowing someone else uses your mark without transferring the ownership to him. Thus, the major difference between the two concepts is that while in the former all the rights along with the ownership stand transferred, in the latter only some rights are transferred while the ownership remains with the actual owner. The licensing is usually for a limited period.


Licensing of the trademark is usually a time-bound agreement, the Trademarks Act, 1999, under section 49 provides the procedure for licensing a trademark, this agreement may be either for all of the goods or services or a part of them. There is no specific term for license agreement mentioned under the statute and it may vary from contract to contract. In case of sale of the registered trademark, the license agreement stands terminated.

There are few important clauses in the trademark license agreement,-

  • Identification of the Parties Clause- this clause deals with the two parties to the agreement. The party who has a right to grant the license and the other who can exercise it, these parties may be an individual or a company. Along with the name of the parties their registered address are also mentioned in this clause.

  • Recital Clause- this clause helps to understand the central idea behind the license agreement, in other words, the purpose for which the licensor and the licensee are agreeing is elaborated under this clause.

  • Definition Clause- as the name suggests, this clause explains the complex and important terms in the agreement, it acts as a glossary for the agreement which takes precedence over any other dictionary meaning of that term when a question as to its interpretation arises.

  • Grant Clause- this clause deals with the rights that are being transferred and their scope and extent in the agreement, along with the rights this clause may also lay down certain restrictions on these rights.

  • IPR Clause- this is one of the most important clauses of the agreement, which clearly states that the ownership rests with the licensor in case of such agreements and these agreements are not to be confused as being the agreement of assignment.

  • Consideration Clause- all contracts have considered as an essential limb, thus this clause lays down the consideration being paid to the licensor in term of compensation.

  • Term and Termination Clause- license agreement is for a specific period, hence, this clause states the term of the agreement and the conditions on which the same can be terminated. It also specifies the consequences in case the agreement is terminated before the said term without falling under the mentioned conditions.

Apart from these, there are few other clauses like severability clause, force majeure clause, obligations of the parties, etc. which may also be found in a trademark license agreement. If the Registrar is satisfied with the content of the agreement he may publish relevant information related to it within two months in the Trademark Journal to invite objection on the same.

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INTRODUCTION Intellectual property is considered to be a creative work by the human intellect, its main purpose is to promote science and technology along with arts, literature and various other creat