Trademark Acquisition Agreement
Imagine the power of the name "Coca-Cola." Now imagine being able to buy the rights to use that name. The ability to purchase trademarks is what trademark acquisition is all about. Trademarks are incredibly valuable business assets. Their ownership must be secured before any product launch or document generation.
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Definitions
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The United States Patent and Trademark Office defines a trademark as a "word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others." A trademark prevents confusion in the marketplace. This focus on preventing confusion is at the heart of trademark law. You may be able to buy and sell your real property to anyone who can afford to pay, but that isn't necessarily true for the sale of trademarks. You can imagine the confusion that would result if a computer were named "Coca-Cola"! This focus on preventing confusion should also govern trademark acquisition.
Benefits
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Trademark acquisition agreements involve licenses or sales. Such agreements benefit both parties because they usually have the effect of increasing the exposure to the products. Regardless of whether it is a licensing agreement or sale, the acquisition is governed by contract principles.
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Licensing
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If the acquisition agreement is a licensing agreement, the owner of the trademark retains ownership of the mark but allows another to use it. Such licenses are generally for a limited period of time. They are granted to a limited number of licensees so that the trademark does not get diluted. The owner of the license usually sets forth strict criteria governing the use of the license so that it is never used on shoddy products or products that are outside the scope of the trademark. The license agreement generally includes a clause to the effect that the license reverts back to the owner if the trademark is misused. An example of misuse would be using a McDonald's trademark on a Burger King hamburger.
Sales
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Acquisition agreements involving the sale of a trademark are less common. Since startup businesses often apply for many trademarks, they commonly end up with trademarks they never use. Eventually, they may decide to abandon these trademarks or sell them. In such instances, the seller retains no control over the use of the trademark. Therefore, the seller should be very careful that the trademark it is selling bears no relation to its products.
Warning
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Consulting an attorney before signing a trademark acquisition agreement is strongly advised. You also should steer clear of the numerous boilerplate agreements that are available on the Internet. While such agreements may be very helpful, don't use one without first talking to an attorney who specializes in trademark agreements and who knows the particulars of your business.
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References
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