Licensing of Trademarks
As per the Trademarks Act revision in 1999 to match the needs of the modern methods of trade a provision of enabling proprietors of trademarks to license their trademark to other users has been made possible. In legal terms the person or entity which purchases this license from the registered proprietor is called as the Registered User. The Trademarks Act 1999 has also simplified the law which governs the licensing of trademarks.
Licensing enables the holder of a particular trademark to pass-on the goodwill of the trademark for financial benefits keeping the ownership intact. This license can be terminated anytime or as per the agreements between the proprietors. Under the provision enabled by the new Trademarks Act the licensee becomes the Registered User and is acknowledged by the Trademarks Registry for the said Trademark. This enables the registered user to prove his authenticity in the market.
It is a known fact that any goodwill which is added due to the use of a particular brand name by the registered user stays with the original owner and proprietor of the Trademark only. No later claim can be made by the Registered User on any grounds whatsoever to be allowed the use of the Trademark once the agreement is terminated between the Registered User and the Proprietor. This protects the original owner of the Trademark and prevents any misuse later on.