A Trademark License Agreement permits the use of a registered mark under defined quality and brand standards. This playbook covers negotiation of territorial rights, royalty models, and enforcement of brand integrity.
Why This Matters: Uncontrolled exclusivity can hinder growth and reduce licensing opportunities. Well-structured exclusivity clauses protect market share without overcommitting rights.
Negotiation strategy
If you're the Licensor:
Licensor should ensure that exclusivity terms do not overly restrict future licensing opportunities. Consider including carve-outs for existing customers or strategic partners to maintain flexibility.
If you're the Licensee:
Licensee should negotiate for exclusivity in high-value segments to protect market share. Ensure the terms align with strategic business goals and allow for necessary carve-outs.
Essential elements
1
Exclusive License Grant
Grants sole rights to Licensee.
2
Non-Exclusive License Grant
Allows multiple licensees.
3
Restricted License Grant
Limits use by field or territory.
Action framework
ACCEPT
Propose edits if exclusivity terms are too broad or restrictive.
EDIT
Reject if exclusivity undermines strategic goals.
ADD
Add language for carve-outs or specific territories.
PRO TIP
Always define 'Territory' and 'Field of Use' to avoid disputes.
Example clauses
FAVORABLE
Exclusive License Grant
"Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee an exclusive license to use the Licensed IP within the Territory and Field of Use specified herein."
NEUTRAL
Non-Exclusive License Grant
"Licensor hereby grants to Licensee a non-exclusive license to use the Licensed IP within the Territory and Field of Use specified herein."
UNFAVORABLE
Overly Broad Exclusivity
"Licensee shall have exclusive rights to all territories and fields of use without limitation."
Fallbacks
High-Value Market Segments
In high-value segments, exclusivity can protect market share but should be balanced with flexibility for future opportunities.
Emerging Markets
In emerging markets, non-exclusive licenses may be preferable to encourage growth and partnerships.
Strategic Partnerships
Carve-outs for strategic partners can maintain existing relationships while granting exclusivity in new areas.
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