Licences and assignment
In the beginning, we looked at the idea that, as the owner of the property, you can decide what to do with it. This is where licensing and assignments come into the discussion.
Licences
Probably all the fast-food outlets and most coffee shops we can think of are franchises. A KFC franchise, for example, consists of a number of licences: to use the trade mark, to equip your outlet to look like a KFC outlet, to use the KFC menus and the KFC recipes, to wear the KFC uniforms — and so on.
It works like this. The owner of the KFC intellectual property, a company based in Kentucky, USA, gives the South African main licence to a South African company to franchise KFC outlets in South Africa. That company will then give a licence (actually, a sublicence) to each outlet.
See the Franchise Association of South Africa for more information: www.fasa.co.za.
There are other kinds of trade mark licences which are not franchises in this sense. If my GOXXA erasable pen invention is a good idea with potential, one of the big pen manufacturing companies may want to manufacture and sell the pens. I would give them a licence for the trade mark. Many of the products we use and consume daily are made under licence. Have a look at the labelling on products and you might see this.
Generally speaking, licences do not have to be in writing, but most ordinary commercial licences and franchise agreements will be in writing.
There are different types of licence:
- Non-exclusive licence — where there may be more than one licensee.
- Sole licence — where there is only one licensee.
- Sole and exclusive licence — where the licensee is the only entity licensed to use the mark and the proprietor is also excluded from using the trade mark.
For help with licensing, speak to your lawyer. There is also the Licensing Executives Society of South Africa: www.licensing.co.za.
Read section 38 of the Trade Marks Act.
It is advisable to record all licensees as registered users in your entry in the trade marks register.
Assignment
With licensing, the trade mark proprietor remains the owner of the property — he merely licenses (grants permission to) others to use it. Licensing is different from assignment. In assignment, you transfer your ownership of the trade mark to someone else.
To be effective, the assignment of a registered trade mark (or of a trade mark which is the subject of a pending application for registration) must be in writing and signed by the assignor — that is, the registered proprietor.
Read section 39 of the Trade Marks Act.
Assignments of registered trade marks must be recorded in the Trade Marks Register.