An Insight into Licensing of trademarks in Nigeria

Trademark is a distinctive sign or indicator used by an individual, business organization or other legal entity to identify a particular product or service as originating from a unique source, and to distinguish the product or service from those of other entities.

Trademark Licensing basically entails permission granted by a registered trademark owner, known as the Licensor to another, known as the Licensee to utilize his trademark in instances where such utilization would otherwise result in infringement if done without such permission. A Licensing Agreement is usually
entered into in writing to serve as evidence of the grant of the license, and to detail the scope of the license as well as the rights and obligations of both parties. It is thus imperative that the Licensee carries out the acts specifically outlined under the Licensing Agreement (“the Agreement”) between parties in order to avoid an action for infringement. Where a trademark license is granted, the ownership of the trademark remains vested in the Licensor/Proprietor while the Licensee has the authority to exercise some or all of the proprietor’s rights to the extent as is allowed in the agreement between the parties. This can be likened to a lease agreement where a landlord gives up possession and not ownership of his property, for a tenant to enjoy for certain period of time, subject to the payment of rent; and upon the expiration of the period, the property is taken back by the landlord. Licensing is usually preferable to outright sale or assignment because it gives the proprietor much control over the use of the trademark, and most importantly, the ownership remains with the licensor.