The Trademark Sublicense Agreement is essential when a master licensee wishes to extend trademark rights to additional parties while maintaining control over the brand's integrity. This document, governed by U.S. trademark law, establishes the framework for authorized trademark usage, including quality standards, territorial limitations, and financial terms. It ensures compliance with the master license while protecting the trademark owner's rights through careful monitoring and control provisions. The agreement is particularly vital in franchise operations, merchandising, and brand expansion strategies where multiple layers of trademark rights are involved.
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1. Parties: Identification of licensor and sublicensee, including full legal names and addresses
2. Background: Context of the agreement, confirmation of master license rights, and intention to grant sublicense
3. Definitions: Key terms used throughout the agreement including 'Licensed Marks', 'Territory', 'Term', etc.
4. Grant of License: Scope of sublicense, permitted uses, and territory restrictions
5. Quality Control: Standards, inspection rights, and approval requirements
6. Royalties: Payment terms, calculation methods, and reporting requirements
7. Term and Termination: Duration, renewal options, and termination conditions
8. Representations and Warranties: Standard warranties regarding ownership and right to sublicense
1. Minimum Performance Requirements: Sales targets or usage requirements for ensuring minimum market presence
2. Audit Rights: Right to audit sublicensee's books and records when royalties are based on sales or usage
3. Anti-counterfeiting: Measures to prevent counterfeiting and enforcement cooperation for high-value or frequently counterfeited marks
4. Marketing Requirements: Minimum marketing spend and approval processes when brand promotion is critical
1. Schedule A - Licensed Marks: List and images of all trademarks covered by the agreement
2. Schedule B - Licensed Products: Detailed description of products/services allowed under the license
3. Schedule C - Quality Standards: Detailed quality control requirements and specifications
4. Schedule D - Territory: Detailed description of geographic territories covered
5. Schedule E - Royalty Calculations: Detailed formulas and examples for royalty calculations
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