Can you earn royalties from your trademark by licensing it to another party? Yes, but you need a trademark license agreement that will protect and preserve the trademark. 

A trademark is considered intangible personal property. This means that it can be licensed to a third party. This situation usually arises where the party owning the mark [that would be you] is approached by a much larger company looking to pursue a joint venture or to pursue a different avenue of business that you are either incapable of entering or simply no interested in. Regardless of the reason, a licensing agreement can be struck that allows you to earn money off your mark while the other party does all or most of the heavy lifting. 

A trademark licensing agreement is a very important document. The devil is in the details as they say. The problem is the agreement must be detailed enough to avoid your mark being harmed. There is a concept in intellectually property known as generalization. It states that if any intellectual property becomes generally used in the market in question, then the protection applied to the property rights is forfeit. 

In English, this means you need to closely detail what the license allows the other party to do with the mark and what it does not allow them to do. For instance, can they make alterations to the color of the mark? How about combining it with another mark? How about using it in combination with controversial political or adult content? Then we have the basic practical issues such as how long the license will last and how royalties will be set up. 

Whether you are considering licensing your mark or the mark of another party, a trademark license agreement is a very important document. Contact me today at 619-637-6043 to learn more.

Richard A. Chapo, Esq.