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Trademarks – Can You Make Royalties Off Them?
A trademark is considered a form of intellectual property. For the purpose of this article, it is also considered a form of intangible personal property. Why should you care? This means it can be assigned, sold or licensed to another party. What do we mean by a license? Well, the owner of a trademark has the exclusive right to use it. Most people assume this means to actually use the mark on products, websites and so on. While this is true, the owner also can grant permission for third parties to use it as well. This is done through a trademark license. Why would an owner possibly want to license their mark to a third party? The simple answer is to bring in money. The money comes in as a royalty. How much is the royalty? There is no hard number. It is often suggested that there are audits and the like that can be used to arrive at the number, but this is not a leveraged position. Ultimately, the party that wants the license has to come up with an amount that will convince the trademark owner doing so is a good deal. Are there any dangers associated with a trademark license? Yes. It is important to strictly define what the partying paying for the license can and cannot do with the mark. Generally, the license should be heavily restricted to avoid it being used in a manner you do not care for or a manner which would dilute it and weaken the protection. Given this concern, most trademark licenses tend to be fairly long and complex. Should you look to your trademark as a revenue tool? It depends entirely on your business model. It is a good move for some companies, but not for others. Article Directory: http://www.articledashboard.com Richard A. Chapo is with SanDiegoBusinessLawFirm.com - providing trademark license agreement preparation services. |
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