A trademark is the brand identity of a business which can distinguish the goods and services of a business from those of another. You can register a logo, colour, or slogan as a trademark. A trademark can indicate the commercial viability of a company. In the UAE, a trademark can be legally protected by registering it. So, if someone tries to misuse a registered trademark, then the trademark owner can move legally against the infringement.
Trademark licensing will allow business to expand their market, generate revenue, and also for brand expansion at minimal cost. Brand owners who like to enter the UAE market can choose this strategy.
What is Trademark Licensing in the UAE?
Trademark licensing is an agreement in which the trademark owner will permit another entity to use their mark for the specific goods and services without transferring the ownership. The agreement will have the duration for which the trademark can be used, and the exchange will be done for royalties or licensing fees.
There will be certain conditions in the agreement regarding how the trademark should be used without affecting its value, and the licensee should follow those.
A trademark should be registered in the UAE to be eligible for trademark licensing. Additionally, there will be terms of termination in the trademark licensing agreement, such as breach of contract. In trademark licensing, the licensee can only use the mark for which it is registered, and it can only be used for the goods and services specified in the agreement.
A trademark licensing agreement won’t be valid without recording it with the UAE Ministry of Economy and Tourism (MoET), and the license is limited to the scope of the trademark.
Trademark Licensing and its benefits in the UAE
Generate revenue
Trademark licensing can be a source of income for the licensor. The trademark owner can assign multiple entities to use the mark in a different manner, and this will be useful for the marketing of the mark. If you are a foreign investor who is new to the UAE business market, then you can choose trademark licensing to enter the business market with fewer complications.
To establish a trademark, you may need to spend lots of time and money, while trademark licensing will allow you to establish a trademark very easily. Also, the licensee will have good knowledge regarding the competition in the region and can choose a better marketing strategy.
Business expansion
Trademark licensing will allow business to expand their market to newer regions and thus business expansion is possible without the need to spend energy and money. Additionally, the trademark owner can enter into a partnership with the licensee, and thus both entities can share their resources to achieve individual business goals.
There could be several risks while expanding a business to a new market, but if you license your trademark to someone who is familiar with the market situation and legal requirements, then you could avoid financial and legal risks.
Minimal risk and flexibility
Trademark licensing is not the shifting of ownership; it is the transfer of the ownership rights for a fixed period of time, which will be mentioned in the agreement. After the end of the licensing period, the trademark owner can retain their ownership. Also, the trademark owner can add a relevant clause regarding how the trademark should be used without affecting the value and quality of the mark.
So, the trademark owner can determine how their trademark should be used, and the licensee doesn’t need to build up a reputation for the mark. The trademark owner can add specific terms in the agreement, such as licensing duration, scope of use and territory.
Trademark protection
While entering into a new market, a business should take relevant precautions to secure its mark, but through trademark licensing, the trademark owner can leverage the resources of the licensee to secure their mark.
If a business plans to expand to different markets or industries, trademark licensing will be helpful to prevent the risks associated with it. The expertise of the licensee with the local market and legal procedures will be beneficial for trademark protection.
Secure your Trademark in a partnership or licensing agreement with the help of IP professionals in the UAE:
Business should secure their intellectual property while expanding to new domains, and for that, they can seek the guidance of IP professionals. In a licensing agreement, if proper standards are not maintained, then it could affect the quality of the mark. In some instances, there could be disputes due to the licensing of the marks.
Jitendra Intellectual Property can help businesses to secure their valuable IP assets. We can help you with trademark protection and enforcement in the UAE.
