Trademark Licensing — Licence Agreements and Registered User Recordal
Trademark licensing lets another business use your brand on agreed terms while you stay the owner. The Trade Marks Act, 1999 recognises it as “permitted use”, and a licensee can be recorded as a registered user under Section 49 in Form TM-U for ₹4,500 per mark (e-filing). We check the mark, draft the agreement for your review and file the recordal.
What it is
A trademark licence is permission to use your mark. Ownership does not move. The licensee pays for the right, follows your quality standards, and stops when the licence ends. A sale of the mark itself is an assignment, which is a different filing.
The Act calls licensed use “permitted use”. Under Section 2(1)(r), that means use by a registered user, or use by another person with the proprietor’s written consent, in line with the conditions on the register.
Section 48(2) is why this matters. Permitted use counts as use by the proprietor, so your registration stays safe from a non-use attack under Section 47 even if only your licensee sells the goods.
Recording the licensee goes through Section 49. The proprietor and the proposed user apply jointly on the IP India portal in Form TM-U, with the written agreement and the proprietor’s affidavit.
Who it applies to
License out your brand
Franchisors and manufacturers who outsource production. A common case: a founder registered the mark in their own name, and their Faridabad private limited company has sold under it ever since without any paper.
Take a licence safely
Franchisees and contract manufacturers who need written proof that they may use the brand. Picture a Palwal unit packing spices for a Delhi brand: without a licence, it has no written right to put that name on the packs.
Share a mark within a group
A holding company owns the mark, and subsidiaries or sister concerns use it. One short agreement per user does the job.
Why it matters
Keep your registration alive
Section 48(2) treats permitted use as your use. Without written terms, a licensee’s sales may not count, and an unused mark can be removed after five years.
Let the licensee fight copies
Under Section 52, a registered user can sue for infringement in its own name, subject to the agreement. An unrecorded licensee cannot (Section 53).
Puts the deal in writing
Royalty, territory and term sit in one signed document, so a disagreement is settled by the paper, not by memory.
Licence agreement or registered user: what each gives you
| Written licence only | Recorded registered user | |
|---|---|---|
| Counts as permitted use | Yes, with written consent (Section 2(1)(r)) | Yes |
| Protects against non-use removal | Yes, through Section 48(2) | Yes, through Section 48(2) |
| Licensee can sue infringers | No (Section 53) | Yes, in its own name, with the proprietor as defendant (Section 52) |
| Shown on the register | No | Yes |
| Government fee | None at the Registry | ₹4,500 per mark e-filing in Form TM-U (₹5,000 on paper) |
| Mark must be registered | Permitted use under the Act applies only to registered marks; a pending mark can be licensed by contract | Yes (Section 48(1)) |
In practice, one more rule trips people up. A registered user’s rights are personal. Section 54 says they cannot be assigned or transmitted, so a new licensee needs its own recordal.
Documents required
From the brand owner
- Registration certificate and current status from IP India
- Board resolution, for a company owner
- Quality standards or product specifications
- Affidavit on the relationship, control, goods, conditions and term
From the licensee
- Incorporation or registration certificate
- PAN and GST registration
- Board resolution or partners’ authority
- Address of the premises where goods are made or sold
The agreement itself
- Signed licence agreement, or an authenticated copy
- Royalty and payment schedule
- Authorisation for the agent filing Form TM-U
How it works
Verify the mark before anyone signs
We run a register check on the IP India portal to confirm the licensor is the recorded owner, the classes cover the licensed goods, the mark is in force, and the renewal date is not about to pass.
Draft the licence agreement
We draft for your review: licensed goods, territory, term, royalty, quality control, inspection rights, who acts against infringers, and what happens on termination.
File Form TM-U
Owner and licensee apply jointly with the agreement and the proprietor’s affidavit. You can ask the Registrar to keep commercial details from competitors under Section 49(4).
Keep the record current
When goods change or the licence ends, we file for variation or cancellation of the registered user entry under Section 50.
Timelines
Before signing
Run the ownership and status check first. A licence over a mark that has lapsed or belongs to someone else is worth little.
After registration
Recordal as a registered user is possible only once the mark is registered (Section 48(1)). For a pending mark, rely on a written licence until then.
Every ten years
The registration lasts ten years and must be renewed for the licence to stay meaningful. Put the renewal date in the agreement.
What happens if the licence is not documented
The mark becomes open to removal
Use without written consent is not permitted use. If the owner does not trade under the mark itself, a rival can seek removal under Section 47 after five years.
The licensee cannot sue
An unrecorded licensee has no right to bring an infringement case (Section 53). Only the owner can act.
Loose quality control costs the entry
Section 50 lets the Registrar cancel a registered user entry if quality terms in the agreement are not enforced or complied with.
Frequently asked questions
Is it compulsory to record a trademark licence?
No. Under Section 2(1)(r), use by a person with the proprietor’s written consent is already permitted use, and Section 48(2) treats it as the proprietor’s use. Recording the licensee as a registered user in Form TM-U adds two things: the licensee appears on the register, and it gains the right to sue infringers under Section 52. For a long-term or exclusive licence, recordal is worth the ₹4,500 e-filing fee.
What is Form TM-U and what does it cost?
Form TM-U is the joint application by the registered proprietor and the proposed user to record a registered user under Section 49. The official fee is ₹4,500 per mark when e-filed and ₹5,000 on paper. The same form and fee apply to cancelling a registered user entry under Section 50(1)(b), (c) or (d). We prepare the form and affidavit and file it on the IP India portal.
What must the proprietor’s affidavit contain?
Section 49(1)(b) sets out what it must cover. The affidavit states the relationship between the proprietor and the user, including the degree of control the proprietor will have over the permitted use. It also lists the goods or services, any conditions on the characteristics of the goods or the place of use, and whether the permitted use is for a fixed period or without limit. The Registrar may ask for more. We draft it from the agreement so the two match.
Can I license a trademark that is not yet registered?
You can license it by contract, but you cannot record a registered user yet. Section 48(1) allows registered users only for registered marks, and permitted use under Section 2(1)(r) also refers to a registered mark. Until registration, a written licence protects both sides contractually, and you can file Form TM-U once the certificate issues. If you have not filed at all, start with trademark registration so there is a right to license in the first place.
Can a licensee sue someone copying the brand?
A registered user can. Section 52 lets it sue for infringement in its own name, subject to the agreement, making the proprietor a defendant. The proprietor pays no costs unless it appears and takes part. A licensee that is not recorded cannot sue under Section 53. Most agreements also say who decides whether to act, so the licensee does not go to court against the owner’s wishes.
Can a licensee transfer its licence to another company?
Not as a registered user. Section 54 says a registered user’s right is not assignable or transmissible. A new user must sign its own agreement and apply jointly with the proprietor in Form TM-U. The agreement can still allow sub-licensing as a contract matter if the owner agrees. Any change of licensee should go through the owner in writing.
How is a registered user entry cancelled when the licence ends?
The proprietor or the registered user applies under Section 50(1)(b) in Form TM-U, at ₹4,500 per mark when e-filed. Other grounds under Section 50 include misuse, misrepresentation, changed circumstances, and quality terms that are not being enforced. The Registrar gives notice and hears the proprietor before cancelling. File as soon as a licence ends, so a former licensee does not stay on the register.
Can business details in the licence be kept confidential?
Yes. Section 49(4) lets the applicants ask the Registrar to take steps so that information given for the application is not disclosed to rivals in trade. Royalty rates and supply terms are the usual reason to ask. We include the request in the Form TM-U filing where you want it, so commercial terms stay private.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
Government fee: Form TM-U, ₹4,500 per mark e-filing (₹5,000 on paper), for recording a registered user or cancelling the entry. Stamp duty on the agreement follows the law of the state where it is signed.
Ready to begin?
Tell us who will use your brand and on what, and we will check the mark and draft the licence for your review.