Licensing lets you monetise a brand, a technology or a design without giving it away. But a poorly drafted licence can dilute your mark, create tax exposure and make enforcement difficult.
Scope: the clause that defines everything
The scope clause should specify the licensed rights, the permitted products or services, the territory, the term and whether the licence is exclusive, sole or non-exclusive. Ambiguity here is the single most common source of licensing disputes.
Quality control is not optional
For trademark licences in particular, the licensor must retain and actually exercise quality control over the licensed goods or services. A "naked licence" — one with no meaningful quality control — can put the validity of your mark at risk.
Royalty and payment terms
- Define the royalty base precisely (net sales, gross sales, unit-based)
- Specify reporting frequency and audit rights
- Address withholding tax and who bears it
- Set minimum guaranteed royalties where appropriate
Registration in Bangladesh
Recording the licence with the Department of Patents, Designs and Trademarks strengthens the licensee's position and is advisable for licences of any material duration.
Termination and post-termination
Set out clear termination triggers, a wind-down period for existing stock, and an obligation to cease all use of the mark thereafter. Without a sell-off clause you may find your brand on discounted goods for years.