Shareholder Trade Mark Licence

When do I use this document?

• for a licence of trade marks from a shareholder to a company
• for registered and/or unregistered trade marks
• for a licensee company which is a private limited company incorporated in England and Wales

What are the key features?

• 17 clauses and one schedule over 11 pages
• alternative wording depending on whether the licence is exclusive or non-exclusive
• optional provisions for either a royalty-free licence or for payment of a royalty based on the percentage of sales
• restrictions on the use of the trade marks by the company
• termination rights for the licensor, including the licensor ceasing to be a shareholder in the licensee

What else do I need to know?

One of the shareholders in a company may own a trade mark which the company requires for its business.

The shareholder may want to retain the ownership of the trade mark but to allow the company to use the trade mark in its business whilst the shareholder remains a shareholder in the company.

The licence of the trade mark could be:

• exclusive or non-exclusive: if exclusive, the shareholder will not be permitted to allow other third parties to use the trade mark whilst the licence is in force
• limited to a particular territory
• royalty free or subject to payment of a royalty, for example a royalty of a specified percentage of the sales made by the company

The licensing shareholder will want to retain control of the manner in which its trade mark is used by the company.

The licensing shareholder may also want the licence to come to an end should it cease to be a shareholder in the company.