How to License a Trademark in India?
‘Trademark Licensing’ refers to the mode of transfer of rights wherein the actual proprietary rights in the trademark vests with the trademark owner and only few stipulated rights to use the trademark is given to a third party. Trademark licensing in India is governed by the Trade Marks Act, 1999 (hereinafter, “the Act”).
Though the term licensing/ license is nowhere used in the Act, the statutory provisions in the Act governing trade mark licensing in India refers to the provisions relating to “registered users.”
Section 2(1) (r) of the Act defines “permitted use” as:
“in relation to a registered trade mark, means the use of trade mark by a registered user of the trade mark in relation to goods or services with which he is connected in the course of trade; and in respect of which in the trade mark remains registered for the time being; and for which he is registered as registered user and which complies with any conditions or limitation to which the registration of registered user is subject; or by a person other than the registered proprietor and registered user in relation to goods or service with which he is connected in the course of trade and in respect of which the trade mark remains registered for the time being : and by consent of such registered proprietor in a written agreement and which complies with any conditions or limitation to which such user is subject and to which the registration of the trade mark is subject”
Licensing of a trade mark has been embodied under Section 48 (Registered User) and Section 49 (Registration as Registered User) of the Act.
Section 48 states as follows:
Subject to the provisions of section 49, a person other than the registered proprietor of a trade mark may be registered as a registered user thereof in respect of any or all of the goods or services in respect of which the trade mark is registered.
The permitted use of a trade mark shall be deemed to be used by the proprietor thereof, and shall be deemed not to be used by a person other than the proprietor for the purpose of section 47 or for any other purpose for which such use is material under this Act or any other law
Although recording of permitted use is voluntary, it is advisable that the Registered User Agreement/ License Agreement be registered with the Registrar of Trade Marks. The application for recording of the said license agreement should be made within six months from the date of such agreement.
For registering a person as a registered user/ licensee of a trade mark, the registered proprietor/ licensor and the registered user/ licensee shall jointly apply in writing to the Registrar in FORM TM- 28, alongwith—
The agreement in writing or a duly authenticated copy of it, entered into between the registered proprietor/ licensor and the proposed registered user/ licensee with respect to the permitted use of the said trade mark; and
An affidavit made by the registered proprietor/ licensor giving particulars: – of the relationship, between the registered proprietor/ licensor and the proposed registered user/ licensee – of control by the proprietor/ licensor over the permitted use by the licensee which their relationship will confer – of goods or services in respect of which registration is proposed; – of conditions or restrictions, if any, proposed with respect to the characteristics of the goods or services, to the mode or place of the permitted use, or to any other matter; – of time period for the permitted use;
A Power of Attorney signed in favour of agents, if any
Such further documents or other evidence as may be required by the Registrar or as may be prescribed.
Once the Registrar is satisfied with the aforesaid application and the entailed particulars, he registers the proposed registered user/ licensee in respect of the goods or services as to which he is satisfied.
The entry in the register shall state the date on which the application for registration of registered user was made. This is the effective and enforceable date against third parties.
The recordal will be published in the Trade Marks Journal within two months from the registration date. The Registrar is also obligated to issue a notice in the prescribed manner of the registration of such licensee, to other registered users/ licensees of the concerned trade mark, if any. However, upon request by the applicant, the Registrar shall take steps to ensure that the information given for the purposes of an application under this section (other than matters entered in the register) is not disclosed to rivals in trade.
A trademark may be licensed for some or all of the goods or services covered. The sale of a registered trademark automatically terminates the license. There are no statutory provisions prescribing the terms of licensing.
Variation or Cancellation of registration as a registered user:
The Act under Section 50 provides for variation or cancellation of the registration of a registered user/ licensee may on the grounds, among others, that the registered user/ licensee has used the trademark in a manner not in accordance with the agreement, or the proprietor/ user has failed to disclose any material fact for such registration, or that the stipulation in the agreement regarding the quality of goods is not enforced, or that the circumstances have changed since the date of registration, etc. Under the said provision notice and opportunity of hearing is provided before cancellation of registration.
Rights of the registered user/ licensee:
To initiate proceedings for infringement in his own name as if he were the registered proprietor. The registered trademark user/ licensee in India is entitled to call upon the registered proprietor/ licensor to initiate proceedings against infringement of the trademark. He can also institute proceedings in his own name after a one month notice, if the proprietor refuses or neglects to do so.
- A registered user/ licensee does not have a right of assignment or any transmissible right with respect to the trademark.
- The unregistered trademark user, however, has no right to institute any proceeding for infringement. It is advisable for the licensee to cite the proprietor of the trademark as co-defendant in any such proceedings. If the proprietor is added as a co-defendant by the registered user, he shall not be liable for any costs, unless he appears and takes part in the proceedings.
The owner of the copyrights of any work may grant a license under the Copyright law to authorize a third party to use and distribute the copyrighted work. A copyright license may be exclusive or nonexclusive.
The term Exclusive License is defined in section 2(j) of the Copyright Act, 1957 to mean and include a license which confers on the licensee and the persons authorized by him, to the exclusion of all other persons, any right comprised in the copyright of a work.
The licensee, including the exclusive licensee, can exercise this right only if the same is specifically included in the terms of the agreement.
Section 30 provides for licences by owners of copyright in the following manner:
The owner of the copyright in any existing work or the prospective owner of the copyright in any future work may grant any interest in the right by licence in writing signed by him or by his duly authorised agent: Provided that in the case of a licence relating to copyright in any future work, the licence shall take effect only when the work comes into existence.
Explanation.- Where a person to whom a licence relating to copyright in any future work is granted under this section dies before the work comes into existence, his legal representatives shall, in the absence of any provision to the contrary in the licence, be entitled to the benefit of the licence.
Types of Licenses under the Copyright Act, 1957 as amended in 2012
Chapter VI of the Copyright Act discusses licensing of copyrighted works. This chapter discusses seven different types of licenses issued by the Copyright Board (which are either compulsory or statutory):
a) Compulsory licenses for works withheld from the public: According to this provision, any person may approach the copyright board, for issuance of a compulsory license to publish a work that is withheld from the public by the copyright owner. However, before approaching the Copyright Board, the complainant should have approached the copyright owner first for a license to republish or perform the work and the copyright owner should have unreasonably rejected the request of the complainant.
b) Compulsory licenses for unpublished works of unknown authors: In case of unpublished works of unknown or dead authors, any person may apply to the Copyright Board for a license to publish or communicate to the public such works or translations thereof. However, before making such an application, the applicant is required by law, to publish his proposal to do so in a national newspaper.
c) Compulsory licenses for the benefit of the disabled: Any person or non-profit organization working for the benefit of the disabled may apply to the Copyright Board for a compulsory license to publish any work in a format suitable for their accessibility.
d) Statutory licenses for Cover Version: Section 31C of the Copyright Act provides for the grant of statutory licenses for making cover versions of any sound recordings. This section specifically requires the Copyright Board to fix the minimum amount of royalty to be paid for the creation of such a version.
e) Statutory licenses for Broadcasting literary, musical works and sound recordings: This license is issued by the Copyright Board in favour of any broadcasting organization desirous of broadcasting to the public any literary, musical work or sound recording which is already published by the copyright holder. Although the Copyright Board is authorized to determine the royalties payable under this license, the Board is yet to convene and determine these royalties.
f) License to produce and publish translations: This license issued by the Copyright Board permits the applicant, after the applicant pays a determined royalty to produce and publish a translation of literary or dramatic work, after seven years of publication of said work. It is pertinent to note here, that this licensing is not applicable to cinematographic films and sound recordings.
g) License to reproduce and publish works for limited purposes: The Copyright Board may issue licenses to publish a work in India if the editions of such literary, scientific or artistic works are not made available in India. The Copyright Board, in case of such applications, may issue the license after determining the royalty to be paid to the copyright holder.