Protect Your Goodwill: Allowing Third Parties to Use Your Trademarks

Insurers naturally allow their agents and other third parties to use their trademarks and service marks. But unless you set clear guidelines for third-party use of your brands, this can be risky. To help protect your significant investment in your intellectual property, consider the following principles before allowing third parties to use your trademarks.

U.S. trademark law requires brand owners to maintain control of their marks; failing to exercise such control can result in loss of trademark rights. To help establish control, brand owners can require their licensees to execute agreements defining the permitted uses of the marks, such as:

• Scope, Goods, Services, and Territory: The license should identify the marks and logos that the licensee may use; the goods or services to be offered under those marks; and the geographic area where those marks can be used.
• Quality Control: Consider listing the types of materials the licensee can produce and requiring the licensee to obtain your advance written approval of materials displaying your brands. It can also be helpful to require licensees to comply with your branding manual. (Branding manuals spell out requirements for consistent display of trademarks, such as their color, size, surrounding clear space, proper trademark notices and use adjacent to other brands.)
• Termination: The license should define how and when the license will be terminated. For example, you may wish to state that the license will automatically terminate if the third party fails to comply with the agreement or allow a specified time frame to correct unauthorized uses.
• Prohibitions: To minimize disruption upon termination, consider prohibiting licensees from registering business names, D/B/As, email addresses, domain names and social media usernames incorporating your brands.

Brand owners’ responsibilities do not end with an executed license agreement. It may be appropriate to conduct periodic online and in-person checks on your licensees’ use of your marks to assess compliance with the license.

Faegre Drinker’s intellectual property team stands ready to assist with any questions you may have as you navigate the trademark licensing process.