What do the most iconic brands in the world have in common? Aside from the obvious, which would be the massive following and sales of their products all over the world for years, the answer is in the question itself. Iconic brands got their iconic status from years of building their brands or trademarks into what we know and recognize today. The most successful global companies in different industries didn’t just happen overnight. Even Apple, Forbes’ most valuable brand in the world for the seventh year running, started somewhere small. It also took years for coffee shop Starbucks to finally establish their identity, settling with the demure mermaid symbol, painted green, long after they went global.
What is a trademark and what makes it such an important deciding factor in a business’ marketing and overall success?
A trademark is defined as a word, phrase, symbol, and/or design, including logo designs, that identifies and distinguishes the source of the goods of one party from those of others. People also refer to it as a brand. Although a company does not solely bank its marketing success on its visual identity, a trademark perhaps plays the most important part throughout every successful company’s history. And while a trademark is more than just a visual identity, a business with every intention to succeed would do well to remember that a certain symbol, a logo can make or break the overall brand in the eyes of the all-too-knowing customer.
Trademarks have always served as symbols of values, loyalty, togetherness and what a business stands for. Because people are visual by nature, you cannot fault them for judging or identifying with a certain product they have loved for years, all in recognition of what these products symbolize. When thinking about licensing the trademark your small business has developed, keep in mind that you may still change a little detail here and there, but not everything.
When you see the Volkswagen logo, for example, you think of a slick car. When you see Nike’s famous “swoosh” mark, you think of sporty trainers and, of course, sports. Because what it boils down to is creating something which the business would always be known and remembered for. This is also why trademark licensing agreements are very important. You are protecting your brand identity, otherwise, there is a big chance that others would be able to use it, taking advantage and riding on the reputation that your company worked hard to make.
Trademarks existed long before stores had names, as far back as the 14th and 15th centuries when there were a dramatic surge and emergence of merchants and guild-crafters. The need for symbols and logos became evident everywhere to mark the identification of merchandise or services being sold. At the height of English monarchy’s powers and the Industrial Revolution, the guild system gradually moved into free businesses, thereby warranting civil protection against entities who try to copy or replicate another merchant’s mark. You may also see word agreement templates.
Perhaps one of the finest examples of both the ancient and modern use of the trademark was the barber’s pole. This was used as an identifying mark of a business location. Blacksmiths and sword makers during English medieval times were required to put identifying marks. Because product warranty obviously didn’t exist yet, it was the only way a weapon can be traced back to its producer and hold him accountable when rendered defective. Soon after, the use of marks became the grounds and basis for proof of goods and merchandise ownership, as trading eventually became an evident part of society in the 10th Century. You may also see simple legal agreements.
Trademarks also prevailed as common law marks before the statutory law came into effect in Britain. There was an obvious need for a law enforcing trademarks to be registered and protected against infringement, thereafter making the first ever enactment of the statutory law in Britain in the year 1875. The British Trademark act of 1875 paved the way for formal trademark registration on the basis of criterion fulfilled and met by recognizing the trader’s merchandise. The modern times have allowed for the expansion of businesses, making companies entrust the use of their brand to third parties promising a wider scope in sales and opportunities, that is why aside from registration, trademark license agreements also became a big part of the trade.
Obviously, trademarks are business assets. And every business needs to protect their assets, which is what a trademark ought to do. Licensing it, however, can provide advantages to the brand and will also serve as a reliable strategy that would introduce and expose the brand to new markets. A trademark license agreement is a contract made between the owner of the trademark, the licensor, and another party. It also involves the licensee where they reserve the right to use the licensor’s trademark in which otherwise would risk infringement of the owner’s rights. A license, however, is not a sale and the owner maintains ownership over the brand or mark. You may also like agreement templates in a word.
This means the trademark license owner can then license the use of the mark to other manufacturers with goals of brand expansion and exposure to new markets to take full advantage of the financial benefits and build strength on the brand with consumer following. A likely example will be a movie studio that was granted the license to make a line of shirts with the characters from a top rating TV series and the shirt manufacturer. The latter wouldn’t get to own the trademark. The movie studio is still its owner but the shirt manufacturer or company get to have limited rights to release goods with the movie studio’s trademark. You may also see patent agreement templates.
Nothing governs the business relationship between two parties who want to establish the scope of trademark use with specific goods and services than a license agreement. The fees due to the licensor in exchange of having limited use of the trademark and the terms and conditions by which the two parties would agree to end the relationship, should be indicated according to State, Federal and in some cases, even international law, because other companies grow big enough to cater to a global market. A contract like this would establish and further business goals for all parties concerned, protecting their interests, in the process. You may also see content license agreements.
License agreements for trademarks allow a good increase of customer connections. It makes them feel more involved with the product categories being licensed. Brand extension via licensing offers opportunities and multiplies it a hundredfold when it comes to consumer connections. If the owner also decides to extend the license into other goods by a certain product or company, the brand would gain a bigger following by way of brand exposure, because the goods bearing the trademark will be sold in perhaps a sizable number of retail stores. Won’t it be just grand to look at catering to different, better and bigger markets? You may also like patent agreement templates.
In the part of a licensor, it is important to monitor and double check the diligence of other parties on a potential licensee, making sure that they are stable enough to manage and finance the use of the trademark in ways that would benefit everyone. Otherwise, there is no point agreeing to the contract, especially if signs of shortcomings are pretty much evident. There are some things you simply cannot force, so you have to also choose who you trust business with before the legalities are established. But whether you are the licensee or the licensor, it is important to create an agreement that would help avoid issues.
The most important clauses of that document should be the effective date for the licensee to use the trademark, and termination date if necessary, information of all parties involved, a granting clause explaining the license terms and payment details for fees due to the licensor, including applicable royalties. The agreement should be nowhere less than that. You may also see franchise agreements.
The best thing about a trademark is that it never expires. It stands the test of time, allowing continuity for as long as the brand and the company are still standing to serve its customers, and of course, as long as its main use is in the United States commerce. You probably have already noticed that the most iconic and recognized logos and brands that you see today have been around for a long, long time. Some of them have even been there for more than a hundred years. Luxury car brand Mercedes was first registered in 1900 and Pepsi-Cola was registered in 1896. You may also see sample lease agreements.
Brands are a very critical asset. That is why your trademark needs to be protected. Be vigilant and exercise diligence in deciding how it fits your company. Secure a clearance search to make sure your trademark is available to use and doesn’t cause infringement to existing rights of possible prior owners to avoid trouble with the law. Do the same with licensing later on. You may also see formation agreement templates.
Do not forget that the more you separate your business mark from others in a complicated industry, the easier it will be, for you to protect. Furthermore, it will also offer probably the best way your business and its products will be identified today and if you’re lucky, maybe for the next one hundred years. You may also see vendor agreement templates.