Don't Get Caught Naked: Losing Trademark Rights Through "Naked Licenses"
Getting our minds out of the gutter, "naked licenses" have nothing to do with nudity. Naked licenses are when a trademark owner licenses the use of a trademark without controlling the quality of the goods or services provided by the licensee. If consumers cannot expect consistency of goods or services associated with a trademark, in effect, consumers will cease to attribute those products with that mark. This is essentially the same as non-use of a trademark.
Quality control is vital in trademarks and licensing, which is why many franchises thrive. The intolerance for anomalies assures consumers that they can depend on the goods and services to be exactly as they expect. This high level of predictability is the secret to many franchises' success.
So trademark owners, don't be caught with your pants down when licensing the your rights. Ensure that your licensees are delivering the same quality of goods and services that you have originally attached to your trademark.
Labels: consumer confusion, franchise, franchising, goods and services, licensing
