How to Terminate or Renew A Trademark License Agreement?

When you enter into a trademark license agreement, you're granting another party the right to use your registered trademark in exchange for specific terms, such as payment or other considerations. However, at some point, you may need to either terminate or renew the agreement based on changes in your business strategy, the performance of the licensee, or changes in the law. Understanding how to properly manage these processes can protect your intellectual property rights and avoid potential legal disputes. This blog post will guide you on how to terminate or renew a trademark license agreement, including information on how to register a name for trademark protection and the trademark registration process in Malaysia.

What is a Trademark License Agreement?

A trademark license agreement allows the trademark owner (licensor) to permit another party (licensee) to use their trademark for specific purposes and conditions, which may include the right to use the trademark on certain goods or services. This agreement can be exclusive or non-exclusive, and it typically involves financial considerations like royalties or lump-sum payments. While the licensee gains access to the trademark, the ownership of the trademark remains with the licensor.

Terminating a Trademark License Agreement

There are various reasons why you may decide to terminate a trademark license agreement, such as:

1. Non-performance by the Licensee: If the licensee fails to meet the obligations set out in the agreement, such as paying royalties, maintaining the quality of products, or adhering to territorial restrictions, you may have grounds for termination.
2. End of Term: Most trademark license agreements have a fixed term. When the contract ends, you can decide whether to renew or terminate it, depending on the business relationship and market conditions.
3. Breach of Agreement: If either party fails to comply with the terms and conditions of the agreement, this may constitute a breach, giving the other party the right to terminate the contract. Common breaches include unauthorized use of the trademark, failure to protect the trademark from infringement, or misuse of the trademark.
4. Termination by Mutual Consent: Sometimes, both parties agree to terminate the agreement before its term ends. In such cases, it's essential to document the agreement in writing, specifying the terms under which the license is being terminated.

Steps to Terminate a Trademark License Agreement:

1. Review the Agreement: Before taking any steps, carefully review the trademark license agreement. Look for clauses that address termination, such as conditions for termination, notice periods, and any penalties for early termination.
2. Send a Notice of Termination: If the agreement allows for termination, the next step is to send a formal notice to the licensee. This should include the reason for termination (if applicable) and the effective date of termination.
3. Ensure Compliance with Legal Requirements: Depending on the jurisdiction and the terms of the agreement, you may need to comply with local laws and regulations regarding trademark licensing and termination. For example, in Malaysia, you may need to inform the Malaysian Intellectual Property Office (MyIPO) if the trademark license is registered.
4. End Use of the Trademark: After termination, the licensee must cease using the trademark immediately unless otherwise agreed. You should also ensure that all materials bearing the trademark are removed from the marketplace or disposed of.
5. Final Financial Settlements: Ensure that any outstanding payments, including royalties or licensing fees, are settled before finalizing the termination. You may also need to address any intellectual property infringement claims.

Renewing a Trademark License Agreement

In many cases, a trademark license agreement is set to expire after a certain period. However, you may wish to extend or renew the agreement if the relationship with the licensee is beneficial. Here's how you can go about renewing the agreement:

Steps to Renew a Trademark License Agreement:

1. Review the Existing Agreement: Similar to terminating an agreement, you should begin by reviewing the terms of the original agreement. Pay attention to any clauses regarding renewal and whether there are any automatic renewal provisions or specific actions that need to be taken.
2. Assess the Licensee’s Performance: Before renewing the agreement, evaluate how well the licensee has adhered to the terms of the contract. This includes considering the quality of their products or services, their marketing efforts, and their payment of royalties.
3. Negotiate Terms: If you are satisfied with the licensee's performance, you can enter into negotiations for renewal. This is an opportunity to update the terms of the agreement, such as adjusting royalty rates or adding new products or services covered by the license.
4. Execute a Renewal Agreement: Once the terms are agreed upon, draft and sign a renewal agreement. This should outline the new terms and conditions, including the renewal period, any revised payment schedules, and any additional stipulations.
5. Register a Name for Trademark (if applicable): If you're looking to protect your new brand or a variation of an existing trademark, ensure that the trademark is properly registered with the relevant authorities. For example, in Malaysia, businesses can apply for trademark registration through MyIPO.

Trademark Registration in Malaysia

Whether you're entering a trademark license agreement or not, ensuring your trademark is registered is crucial to protecting your intellectual property. In Malaysia, the process of trademark registration is overseen by the Malaysian Intellectual Property Office (MyIPO).

Trademark Registration Services in Malaysia

Exyip, a leading provider of trade mark registration services in Malaysia, offers businesses a streamlined process for registering their trademarks. Whether you're launching a new product line or protecting your brand name, Exyip helps guide you through the application process to ensure that your intellectual property is secure.

To register a name for trademark in Malaysia, you'll need to:

1. Conduct a Trademark Search: To ensure that your trademark is unique and not already registered, it’s advisable to conduct a search of the MyIPO database.
2. Submit the Application: Once you've confirmed that the trademark is available, you can file the application with MyIPO. You’ll need to provide details about your business and the goods or services the trademark will cover.
3. Examination and Approval: MyIPO will examine the application to ensure that the trademark complies with Malaysian trademark laws. If approved, your trademark will be registered and published in the official Gazette.
4. Maintaining Your Trademark: Once registered, your trademark is protected for 10 years, after which it can be renewed. Keeping track of renewal dates is essential to maintaining trademark protection.

Conclusion

Terminating or renewing a trademark license agreement is an important process that requires careful planning and attention to detail. By understanding the steps involved and seeking professional advice when necessary, you can ensure that your intellectual property rights are properly protected. If you’re considering registering a new trademark or renewing an existing license in Malaysia, Exyip offers reliable trade mark registration services Malaysia to assist you in safeguarding your brand. Whether you're terminating, renewing, or registering a trademark, taking the proper steps can provide long-term protection for your business assets.