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Trademark Licensing

If you are a business owner wanting to allow others to use your trademark as part of their advertising to sell your product, it is always best to get a trademark licensing agreement. A trademark licensing agreement is between the trademark owner (the “licensor”) and someone else (“the “licensee”) and permits the licensee to use the licensor’s trademark in connection with specific products or services. A couple examples of such an agreement would make sense is when a website using your logo to advertise they sell your product or when you give a print company authority to use your logo on materials prepared for you, but only for you. A good case about this is John C. Flood of Virginia, Inc. versus John C. Flood, Inc., 642 F.3d 1105; 395 U.S. App. D.C. 284 (2011).

John C. Flood started his plumbing company in the D.C. area and in Maryland in 1904. John C. Flood never registered his company name with the United States Patent and Trademark Office, even though they were driving across state lines to do plumbing repairs. In 1988 some of the company members left for Virginia to start a second John C. Flood and by an oral agreement were allowed to use the name John C. Flood as their business name. There was a falling out between the two businesses via a 1991 bankruptcy. In 1996 the Maryland John C. Flood purchased the name “John C. Flood” from the bankruptcy court. In 1999 the Virginia John C. Flood successfully registered John C. Flood as a trademark. Both companies were driving into D.C. and customers did not know they were separate entities. In 2001 the Maryland John C. Flood wrote a cease and desist letter to John C. Flood of Virginia to stop using their trademark and started an action with the Trademark Office to have John C. Flood of Virginia’s trademark cancelled. It then ended up in court. The two main issues were the Maryland John C. Flood never registered their trademark and there was no written licensing agreement. The Flood court agreed there was an oral licensing agreement and said, "Undoubtedly, the general rule is that, as between conflicting claimants to the right to use the same mark, priority of appropriation determines the question." In the end John C. Flood of Virginia lost and had to stop using just the name “John C. Flood” and is now known as “John C. Flood of Virginia.” Priority of appropriation means you acquire the paramount rights for protection in regard to using the mark in commerce.

A trademark agreement must contain certain provisions that include:

• The legal names of the licensor and licensee
• Identification of the trademark(s) that are the subject of the licensing agreement
• Identification of the products/services with which the licensed mark may be used
• The geographic territory in which the licensee may operate and sell its products/services
• Quality control provisions that set forth clear standards as to the nature and quality of the licensed products/services

To have your agreement drawn up correctly, it is important to consult a trademark attorney to make sure your trademark agreement is valid and enforceable. If you have an questions about this article, please call Citadel Patent Law and ask to speak with trademark attorney George Leone.

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