Trademark Licensing FAQ

Trademark licensing is an agreement in which the owner of a trademark grants another company limited rights to use the mark on specific products or services, in a defined territory and time period, usually in return for royalties. The owner keeps ownership and controls quality.

A license grants permission to use the mark while the owner keeps it. An assignment transfers ownership of the mark to someone else.

IP licensing covers the permission to use any form of intellectual property, including trademarks, copyrights such as artwork and characters, designs and patents. Brand licensing mostly involves trademarks and copyrighted artwork.

Royalty rates are negotiated and vary by category, channel and the strength of the brand. They are usually a percentage of net sales, often with an advance and a guaranteed minimum.

An upfront payment at signing that is credited against royalties the licensee owes later. It shows commitment and gives the licensor early income.

An exclusive license means the licensor will not grant the same rights to anyone else within the defined category, territory and term. Exclusivity usually comes with higher minimums.

Because a trademark identifies the source of goods. An owner who licenses a mark without controlling the quality of what is sold under it risks weakening the mark, which is why agreements include approval rights.

The licensed marks, products, territory, channels, term, exclusivity, royalty rate and base, advances and minimums, reporting and audit rights, approval process, quality standards, termination and sell off terms.

A licensing agent represents the brand owner: building the program, finding and vetting licensees, negotiating deals, managing approvals and royalty reporting, and watching the market.

No. Garfield Agency is a licensing strategy and business agency, not a law firm. We work alongside your trademark attorney, who handles registrations, clearance opinions and legal disputes.

Yes. NFTs, virtual goods, avatar items and other digital IP scopes are licensed categories. The license should define what the buyer owns, allowed uses, platforms and how resale royalties work.

Bruce Garfield is the CEO and Founder of Garfield Agency in Los Angeles. He spent more than 23 years at American Honda overseeing branding and licensing programs for Honda, Acura, Honda Motorcycles, Honda Power Equipment, Honda Racing and HondaJet.

Los Angeles, California. The agency serves brand owners on the West Coast.

Start with an inventory of what you own and where it is registered, then identify the categories your customers would welcome. From there you can build a licensee profile and approach partners. Our contact page is the quickest way to begin that conversation with us.