How to commercialise a trade mark

Commercialising a trade mark can generate substantial revenue for a trade mark owner, particularly if the trade mark is registered. The two main ways to commercialise a trade mark are via a licensing arrangement and by assignment.

Licensing a trade mark

Licensing a trade mark to a third party means that the trade mark owner is consenting to a third party (licensee) using their trade mark. A licensee’s use of a trade mark is usually documented and governed by a licensing agreement between the trade mark owner and the party to be licensed to use the trade mark.

A licensing agreement will set out the terms upon which a licensee may use a trade mark. It typically includes terms that address:

• the length of time that a licensee may use the trade mark for (e.g. five years);

• whether or not the licence is exclusive or non-exclusive;

• how the trade mark may, or may not, be used (e.g. in relation to t-shirts and sunglasses only);

• the territory in which the trade mark may be used (e.g. Queensland or Australia);

• the payments that a licensee must make to the trade mark owner for using the trade mark (this may be a fixed annual amount, a royalty or a combination of these); and

• how either party may terminate the licensing arrangement.

Assigning a trade mark

Since a trade mark is classified as being personal property, it may be assigned from one party to another. This means that a trade mark may be gifted or sold. In these circumstances, the trade mark owner would completely relinquish their rights in relation to the trade mark. Put simply, assigning a trade mark means that you are transferring ownership of it.

A trade mark assignment must be in writing and should be recorded on the Trade Marks Register. This is so that proof of ownership of the trade mark is clear and a matter of public record.

Regardless of how a trade mark is commercialised, it’s important to first apply to register it, as a trade mark. This is because the asset to be commercialised (the trade mark) will become more secure and valuable, once it becomes registered.