#Trademark Licence Agreement Lawyer in France

A trademark licence allows a brand to be exploited without transferring its ownership. It lies at the heart of franchising, merchandising, co-branding and international expansion strategies. Well structured, it enhances the licensor’s intangible asset while protecting the licensee; poorly drafted, it creates a risk of brand dilution and royalty disputes. We assist licensors and licensees at every stage.

The legal framework for trademark licences in France

Article L714-1 of the French Intellectual Property Code (Code de la propriété intellectuelle) provides that the rights attached to a trademark may be the subject, “for all or part of the territory and of the goods or services protected, of an exclusive or non-exclusive operating licence”. The same article requires a written document on pain of nullity only for assignment and the creation of rights in rem; a licence must, however, be recorded in the French National Trademark Register (Registre national des marques) to be enforceable against third parties (Article L714-7). As the trademark remains the licensor’s property, the licence organises a controlled right of use.

Exclusive or non-exclusive licence: a strategic choice

An exclusive licence reserves exploitation to the licensee alone within a defined scope; the licensor then undertakes not to grant other licences, and possibly not to exploit the trademark itself. A non-exclusive licence allows several licensees in parallel. This choice drives the value of the royalty, the intensity of the exploitation obligations and the licensor’s ability to run a network. It must be aligned with the brand and market strategy.

Royalties: freedom of terms and legal certainty

The law sets no fixed scale: the royalty is set freely, usually as a percentage of turnover or of licensed sales, often combined with a guaranteed minimum. Legal certainty depends on a precise definition of the royalty base (products, territory), the rate, the reporting and audit arrangements, and what happens to royalties on termination. A vague royalty mechanism is the most common source of disputes.

Quality control: a condition for the brand’s survival

Licensing a trademark without controlling its use exposes it to deterioration, and even to revocation. The agreement must provide for objective quality and image standards, a right of inspection and graduated sanctions. Damage to the brand’s image by the licensee is a breach that may justify termination.

Termination of the licence

Termination may result from a dedicated clause (non-payment, damage to the brand’s image, change of control) or from general contract law in the event of sufficiently serious non-performance. The agreement must anticipate the exit: cessation of use of the trademark, sell-off of stock, what happens to materials and customers, and a final royalty audit.

Who we advise

We advise trademark owners (creators, groups, funds) who wish to monetise their asset, as well as licensees (manufacturers, distributors, franchisees) who build a business on a third-party brand. The licensor seeks to generate value without dilution; the licensee seeks predictability for its investments and a stable right of use. A balanced agreement protects both, by locking down the scope, quality and exit.

An illustrative example of what is at stake

A ready-to-wear fashion brand grants an exclusive licence for a range of accessories in France. Having failed to define a guaranteed minimum and quality standards, the licensor suffers half-hearted exploitation that devalues its brand, without being able to terminate easily. Conversely, a licensee who has invested in a network is left exposed if the termination clause is unbalanced. These frequent situations can be prevented at the drafting stage.

Points to watch

• Record the licence in writing and register it in the National Trademark Register (Article L714-7).
• Define the royalty base and rate precisely, with a guaranteed minimum.
• Provide for quality control and objective image standards.
• Anticipate the exit: cessation of use, sell-off of stock, final audit.
• Address what happens to the trademark if control of the licensee changes.

How we act

• Drafting and negotiation of licence agreements (exclusive, non-exclusive, franchise).
• Setting royalties, guaranteed minimums, reporting and audit clauses.
• Clauses on quality control, image and brand protection.
• Handling payment defaults and damage to the brand’s image.
• Termination, licence disputes and trademark infringement actions.

Trademark licensing and international expansion

Extending a licence abroad adds a layer of complexity. A trademark is protected only where it is registered: a licence over a territory where the trademark has not been filed offers no real protection. The filing strategy (national, EU trade mark, Madrid system) must therefore be aligned with the scope of the licence. Governing law, jurisdiction and the tax treatment of cross-border royalties must be addressed from the negotiation stage.

Consistency between licences granted in different territories is also crucial: divergent quality standards or inconsistent pricing policies weaken the brand worldwide. A common framework agreement, adapted locally, protects the whole network while meeting the requirements of each market.

Frequently asked questions

Must a trademark licence be in writing?

No statutory provision requires this on pain of nullity: Article L714-1 of the Intellectual Property Code reserves this requirement for assignment and rights in rem. A written document remains essential to prove the scope of the licence and to record it in the National Trademark Register, which is the condition for its enforceability against third parties (Article L714-7).

Can a licence be terminated if the licensee damages the brand’s image?

Yes, on the basis of a dedicated clause or of serious non-performance, provided objective standards and a formal notice procedure have been defined.

Checklist for a robust trademark licence

• Check that the trademark is validly registered throughout the intended territory.
• Record the licence in writing and specify exclusivity, territory and products covered.
• Define the royalty base, rate, guaranteed minimum and audit arrangements.
• Provide for objective quality and image standards, with a right of inspection.
• Define the termination grounds (non-payment, damage to the brand’s image, change of control).
• Organise the exit: cessation of use, stock, final audit of accounts.

Can the licensor itself use the trademark during an exclusive licence?

It depends on the drafting. Exclusivity may be enforceable against the licensor itself (enhanced exclusivity) or only against third parties. This point must be stipulated unambiguously, as it radically changes the economics of the agreement for the licensee.

Official sources

• Article L714-1 of the French Intellectual Property Code, trademark licences: Légifrance (in French)

Every situation is different and we make no promise of outcome. To negotiate, perform or terminate a trademark licence, our intellectual property lawyers assist you.