TRADEMARKS LICENSES

Unlike patent licences, there are no regulations for trade-mark licences.
The Directive on harmonizing national legislations establishes that a trade-mark may be the object of a licence for all, or part, of the territory of the member state. Licences can also be exclusive or non-exclusive.

The Commission has also made a distinction between the absolute and relative territorial protection enjoyed by the licensee.

Absolute protection allows the licensee, in his territory and in any case whatsoever, to prevent the sale of trade-mark products arriving from the licensor or other licensees. With this protection the licensee can prevent the entrance of goods not only when the other parties intend to export them on their own initiative, but also when the products have been requested by clients in the same territory, or constitute parallel imports.
As in all other fields, the Commission has condemned absolute protection.

In fact, parallel imports can never be prevented, and the Commission has not only confirmed this principle but has not hesitated to inflict penalties on companies which, by contractual stratagems, had tried to prevent such imports (Theal/Watts, GADI, 1976, No 890).

The Commission has looked more kindly on licences which included only a relative protection.
In this type of licence there is only an assurance that both the licensor and the other licensees will abstain from an active sales policy in the territory reserved for third parties, particularly from setting up branches and from specific advertising directed at the territory. No undertaking to refuse any requests for supplies arriving from the territory reserved for third parties is imposed (Campari, GADI, 1978, No 1124).

The Commission believes that the prohibition, imposed on the licensee, from handling products in competition with those covered by the trade-mark licence, comes within the prohibition of Art. 85. However, the Commission believed that it was worth exempting, observing that this prohibition can contribute to improve the distribution of products under licence, preventing a waste of effort in sales, encouraging the creation of stocks and shortening delivery times.
Such a prohibition is not admissible for patent licences and know-how licences.

Even if the Commission has not made a formal pronunciation, it seems that any clause which limits the autonomy of the licensee in establishing his prices is quite inadmissible (Art. 85 of the EEC Treaty).
The Commission has admitted that the licensee may be prohibited from assigning the rights granted to him. One of the main prohibitions is that sub-licences may not be granted (Campari, GADI, 1978, No 1124).

In trade-mark licences it is normal for the licensor to establish minimum quality specifications and to check that these specifications are respected.
In fact, it is commonly held that this verification by the licensor of the product obtained by the licensee and marked with the licensed trade-mark is an essential element of the licensing agreement, and that in the absence of such an element the agreement is void.

For other details which an agreement for a trade-mark licence may include, please refer to the Regulation on patents and know-how and to the sentences given by the Commission. The main ones are as follows:

• Hag, GADI, 1974, No 667;
• Fruit of the Loom, GADI, 1985, No 1953;
• EMI Records, GADI, 1983, No 1667;
• Campari, GADI, 1978, No 1124.