Trademark quality control is an important part of maintaining the value of your trademark if you are interested in licensing. You want to be sure that whoever is using your trademark won't damage the mark's value through their use.

Trademark Licensing Quality Control

Licensing trademarks can be very financially rewarding, particularly if you're careful about how you're manufacturing your marks. Companies that manufacture products, for instance, will willingly pay royalties to use an established trademark that consumers easily recognize.

If you are the owner of a trademark, a licensing arrangement can help you expand into new markets or increase your influence in existing markets. This method of expanding your business is very cost-effective and poses little risk as long as you are licensing your trademark to the right company. When arranging a licensing agreement, you should be careful about maintaining your trademark's integrity as well as its value. Only allowing your mark on quality services and goods should help you protect your brand.

Try to license your trademark only to manufacturers that have goals similar to your own. There are several other characteristics you should look for in a manufacturer:

  • Reliable support team
  • A well-defined management structure
  • Financial stability
  • Numerous channels for distribution

Avoid licensing your trademark to manufacturers whose products compete with your own. Instead of helping you increase your market share, licensing your trademark in this way will do the exact opposite.

Why Quality Control is Important

Strong trademark licensing agreements are founded on quality control.

Protecting the reputation of the trademark owner is one of the main purposes of quality control. The licensing agreement will note the minimum standard of quality that the licensee must meet. These standards are crucial, as they can be the difference between a consumer deciding to buy the trademarked product, or them taking their money to a competitor.

Another reason that quality control is important from the standpoint of the trademark owner is that it may be possible to lose trademark rights if standards aren't maintained. In the United States, if the services or goods of the licensee are poor, and the licensor makes no efforts towards quality control, the trademark can be considered abandoned.

The trademark licensor, however, needs to be careful that they aren't exerting too much control, as this may expose them to product liability claims. Trademark owners should spend the time necessary to make sure their licensing agreements contain quality control provisions that will protect the mark's value without interfering too heavily in the licensee's business operations.

A good solution for protecting a mark's value is making sure that the quality of services or goods offered by the licensee are at the same level as those the licensor provides. In the quality control provisions of your licensing agreement, you should also be certain that there are firm guidelines for properly using your trademark. This can include describing where the trademark should be attached to a product.

There are several other items that you should include in your quality control provisions:

  • Clear specifications for products
  • Steps for product inspections
  • Procedures for product approval

Be certain that your quality control provisions include language that gives you, the licensor, the right to inspect products that will carry your trademark. These inspections will make sure that the licensee is abiding by the licensing agreement, as well as any laws that may apply. You should also reserve the ability to review complaints and comments from customers.

Guidelines for Using Trademarks

When licensing your trademark, you should provide the licensee with an electronic version of your mark. You may also need to provide electronic versions of logos, designs, and artwork related to your mark. This will prevent the licensee from trying to recreate your mark, and it will also make sure that your trademark is being displayed correctly.

In your license agreement, make it clear that the licensee can only create copies of your trademark using the materials that you have provided. Also, if the licensee wishes to modify the trademark in some way, you must give your approval before this modification can occur. If for some reason you cannot provide an electronic version of your trademark, you should fully describe to the licensee how they can correctly create the mark.

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