Maintaining control of a trademark when growing a business

Glenn W. Peterson

While some Sacramento small business owners are content with one shop, many others are not. They intend to grow their business and perhaps even begin allowing other potential small business owners to work under the same company trademark. This requires careful planning in order to avoid losing control over it, however.

A trademark must be used consistently in order for its owner to retain it. A trademark identifies a certain business to consumers, and they expect certain goods and a certain quality from those goods. If a business using the trademark does not meet those minimum requirements, then the owner of it could lose it.

The original trademark owner needs to work with licensees in order to ensure that the goods and the quality of the goods meets with the specifications of the original business. This requires a certain amount of oversight on the part of the trademark owner. For example, McDonald’s remains in close contact with franchise owners who use its trademark in order to ensure they maintain the goods and quality of the company.

Using that example, consumers should expect to purchase the same types of products regardless of what McDonald’s they frequent. Small business owners here in Sacramento who intend to license their trademark to another business may want to keep this in mind. This often requires periodic inspections to ensure quality is maintained. There is a substantial amount of case law regarding the issue of maintaining a trademark under these circumstances.

A small business looking to license its trademark to another business would greatly benefit from gaining an understanding of the law in this area before proceedings. An intellectual property attorney could assist in providing an understanding of the law and the rights of each party in a licensing agreement. Moreover, having a legal advocate to help negotiate and draft the licensing agreement could help ensure it provides adequate protections for the trademark owner should a dispute arise.