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Properly documenting trademark assignments and licences is essential to protecting the value and distinctiveness of your brand. A well‑papered chain of title and clear evidence of quality control in licensing can make the difference between a strong brand and one that is vulnerable to challenge.
Licences: "Control" turns licensed use into your use
Licensing is a powerful way to grow a brand, but it comes with conditions. The owner must maintain direct or indirect control over the character or quality of the licensed goods or services. If that control is documented and maintained, the licensee's use is deemed to be the owner's use, preserving and growing the trademark's distinctiveness. If that control is not documented and maintained, the trademark's distinctiveness may be eroded, making your trademark liable to be removed from the trademark register. Evidence of control can include quality assurance procedures and well‑drafted agreements that spell out how control is exercised.
Assignments: Papering the chain of title
Canadian trademark law allows for trademarks to be sold. Trademarks can be assigned with or without the goodwill of the business, and for some or all of the goods and services in association with which it has been used. Clear, dated assignment agreements and prompt updates to the trademark register help preserve rights during ownership changes. the new owner must be ready to show recent use of the trademark or provide a valid reason for any stop in use. If the assignment is not clearly documented, it can be difficult to rely on the prior owner's use and goodwill. That can be important if the trademark registration is challenged in non‑use (also known as expungement) proceedings.
The business impact
Investing to properly "paper" your trademark rights pays off by reducing the risk of non‑use or non‑distinctiveness challenges, preserving brand value through transitions and ensuring licence expansion supports rather than undermines the trademarks. An internal review of your trademark portfolio focusing on recent acquisitions and active licenses can identify gaps and reduce future litigation or enforcement issues.
About Dentons
Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com
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