Can A Trademark Be Licensed Without Registration?

While it is possible to license an unregistered trademark, there are significant legal implications and risks involved. Registration of a trademark provides the owner with legal protection and makes the trademark rights easier to enforce. Without registration, the rights over a trademark are less clear, and licensing it can be more complicated and risky.

Licensing an Unregistered Trademark

Legal Rights and Protection:

• An unregistered trademark does not have the same legal protection as a registered one. In most jurisdictions, a registered trademark gives the owner exclusive rights to use the mark and allows them to prevent others from using a similar mark.
• An unregistered trademark, on the other hand, may still have some protection under common law (if applicable), but proving ownership or infringement can be more challenging without official registration.

Licensing an Unregistered Trademark:

• It is technically possible to license an unregistered trademark, but the licensor may face legal uncertainty. The licensee may be hesitant to enter into an agreement because the trademark lacks the formal legal status that comes with registration.
• The lack of registration may make it harder for the licensee to defend against potential claims of trademark infringement or challenge the validity of the mark.

Enforcement Challenges:

• Trademark Infringement: In the case of an unregistered trademark, the owner may face difficulties in proving that the trademark is theirs in the event of an infringement or dispute.
• Scope of Rights: Since the trademark is not registered, it may be more difficult for the licensor to assert exclusive rights over the mark and prevent unauthorized use by others.

Market Risks:

• Licensing an unregistered trademark could result in brand dilution or misuse if the licensee does not follow proper quality control guidelines, as there is no official record to define the scope of rights and obligations clearly.
• There’s also a risk that the trademark could be contested, and the licensor may lose the ability to use it or enforce it effectively.

Common Law Protection:

In some jurisdictions, common law rights may exist for unregistered trademarks if they have been used in commerce for an extended period, and the trademark owner has established a reputation. However, proving such rights can be more complex and may require evidence of use, reputation, and consumer recognition.

Example

A small bakery uses a unique logo and name but has not registered the trademark. The bakery enters into a licensing agreement with a local café chain, allowing them to use the bakery’s name on packaged products. While the bakery can license the trademark, there are risks involved, such as difficulty enforcing the trademark rights in case of infringement or dispute. The café chain may be hesitant to proceed without the security of registration, as they cannot fully ensure that the trademark is legally protected.

Conclusion:

While trademark licensing without registration is possible, it involves significant risks and challenges. Registering the trademark provides the owner with stronger legal rights and makes the licensing process smoother, as the rights to the mark are more clearly defined. It is generally advisable to register a trademark before licensing it to ensure legal protection and reduce potential conflicts.