Do you want to license your trademark? Here is a brief overview of some of the most important considerations when licensing a TM in Canada. Trademark licensing is a complex topic and is by no means an exhaustive list. However, it provides a brief summary of the trademark licensing requirements under Section 50 of the Canadian Trademark Act.

Although the Trademark Law does not require a written agreement between the licensor and the licensee, it is always advisable to put your agreement in writing. A Canadian TM attorney with TM licensing experience can help you draft a watertight license agreement, one that meets all the requirements of the Canadian Trademark Law.

It is important to ensure that the licensor is the actual owner of the trademark in Canada. The CIPO trademark registry lists the owners of all Canadian trademark registrations, so it is fairly easy to verify ownership before entering into a license agreement. Also, if you are a sublicensee, you must ensure that your sublicense is allowed by both the licensee and the licensor. The basic principle is that the license must be granted by the owner of the trademark in Canada.

When you are the licensor, it is important to ensure that you set meaningful quality standards that the licensee must strictly adhere to. You should also review the activity of the licensee to ensure that it is complying with the terms of its license agreement. If they do not comply with your agreement in writing, your trademark attorney may advise you to terminate the agreement entirely. This will demonstrate that you have direct control over the character, quality and use of the trademark in accordance with the Canadian Trademark Law.

Another requirement is that the licensee must clearly identify to the public that the trademark is being used under license. In doing so, they will also need to identify the brand owner. The reason for this is that Canadian law considers license agreements to weaken the registration of trademarks (only in Canada). This is a weakening of the distinctive character of a trademark that can sometimes result in invalidation of the trademark. For this reason, Section 50 of the Canadian Trademark Act requires the owner to maintain control over his trademark to the extent that the public is informed. This is why you will often see the following language associated with a licensed trademark: “ACME is a registered trademark of ACME Company used under license by Jane Licensor.”