How to make money from trade marks
Trade marks, like other types of intellectual property (IP), are business assets. As such, they may have significant monetary value if you choose to sell or license them.
How to license your trade mark?
A licence gives someone the permission to use a trade mark belonging to someone else. It is a common way of monetising trade marks in the UK. A licence can be:
- exclusive - where the licensee has exclusive rights to exploit the trade mark
- non-exclusive - where more than one licensee can exploit the same mark
The terms of a trade mark licensing agreement can include:
- the amount paid for using the mark
- the duration of the licence
- the business sectors or products to which applies, etc
The trade mark owner and the licensee should negotiate the terms and agree them, preferably in a written contract.
Upon agreement, you must tell the Intellectual Property Office (IPO) about the licence, using the application to record a licensee, and keep them informed if the licence agreement ends, or any of the details change.
How to transfer a trade mark?
Since trade marks are property, you can sell or transfer them to another party as you would any other business assets. In legal terms, this is known as transfer of ownership or trade mark assignment.
There are a few situations where you might want to transfer a trade mark. For example, you may want to sell your trade mark:
- if you sell or close your business
- if you split off a product line
- if you are not able to use or utilise it
You may want to buy a trade mark:
- if you buy a new business or a part of a business
- if you merge your business with another
You can transfer ownership of a trade mark fully or partially. Make sure that you negotiate the terms of the transfer carefully and create a legally binding assignment agreement.
If you take ownership of a trade mark through sale or company merger, you must report the transfer to the IPO .
Before considering any kind of sale or licensing arrangement, you should seek out qualified advice from professionals experienced in trade mark law. An accountant may be able to carry out a business asset valuation to help determine how much your trade mark may be worth.
Use trade mark as collateral
Another way of using your trade mark is as security for a loan. The lender retains a legal right in your trade mark until you repay the loan, but allows you to use the mark in the meantime.
If you use your trade mark as loan collateral, you must tell the IPO. They will record the security interest against your registered mark. When you repay the loan, they will remove the details from the register. See application to record a security interest.
Trade mark revocation and invalidation
Keep in mind that you must use your trade marks in order to maintain their validity and their ability to make you money. If you do not use your trade marks, they could potentially be revoked and you may not be able to sell or transfer them. Read about revocation (non-use) proceedings.