Taking a Trademark Licence: What Should the Licensee Watch Out For?

The licensee's position can be summed up in a single sentence: you are building a business on someone else's trademark with your own money. That is why your checklist comes down to five headings: verifying the trademark's register record before signing, clarifying the degree of exclusivity of the right you are acquiring, having the licence recorded in the register, getting the licensor's undertakings in writing (renewal, validity, defence) and planning the exit scenarios on the way in.

In brief:

• The register before the fee: is the trademark actually registered, is its scope enough for your business, and is it subject to any encumbrance or litigation?
• If the agreement is silent, your licence is not exclusive — tomorrow your competitor could take the same licence.
• A licence that is not recorded in the register cannot be relied on against third parties acting in good faith; if the trademark is sold, you may be left exposed.
• Renewing and defending the trademark is in the licensor's hands; if you do not tie these to undertakings, your investment is left to someone else's diligence.
• Provisions on stock, investment and transition for termination and expiry must be written in on the way in.

We explained the general structure of the agreement in our Trademark Licence Agreement guide and the licensor's perspective in the licensor's checklist; if you are still deciding between a licence and a franchise, start with our comparison article.

Before Signing: Pull the Trademark's Register Record

The first step in a licence negotiation is not the fee but verification. Examine the register entry using the trademark number — we have explained how to do a trademark search separately — and get an answer to every one of these questions:

1. Is the trademark registered, or still at the application stage? An application can be refused; a licence fee paid for an unregistered sign is the price of an agreement whose subject matter never came into existence.
2. Does the scope fit your business? If the product you manufacture or the service you provide is not on the registration's class list, the permission you have been given does not protect you.
3. When does the term of protection expire? For a trademark whose term is nearing its end, the renewal undertaking becomes critical.
4. What is registered against it? A pledge, an attachment, an interim injunction, other recorded licences — all of these affect the framework of your use.
5. Is there any pending litigation? An invalidation or revocation action brought against the trademark could remove the very subject matter of the licence.
6. Is there a non-use risk? A trademark that has not been used for five years is open to a revocation request; ironically, your use will save the trademark, but if revocation proceedings have already begun it may be too late.
7. Is the other party really the proprietor? The proprietor shown in the register and the person or company signing the agreement must be the same; if the name has changed or an assignment has been taken but not entered in the register, those records must be corrected first.

Exclusivity: What Exactly Are You Buying?

The statutory default works against the licensee: unless otherwise agreed, a licence is not exclusive. If the agreement contains no exclusivity clause, the licensor can grant the same licence to your competitor tomorrow and continue to use the trademark itself — and legally you cannot object. If your marketing plan is built on being "the only representative of this brand in the region", have three things expressly written in: that the licence is exclusive, the scope of the licensor's own use (and its limits, if that use is to continue), and the geographical and channel-based framework of the exclusivity. How online sales fit into the definition of territory must also be resolved in this clause.

Recordal in the Register: The Licensee's Life Insurance

When it comes to recordal, the parties' interests are asymmetric: for the licensor it is a matter of good order, for the licensee a matter of existence. A licence that is not recorded in the register cannot be relied on against third parties acting in good faith; if the trademark is assigned, pledged or new rights are created over it, your unrecorded licence is invisible to those persons. A recorded licence, on the other hand, can also be relied on against the new proprietor who acquires the trademark. The practical rule: do not make the recordal request a bargaining point, make it a precondition — tying the first instalment of the fee to completion of the recordal in the register is a legitimate and common structure. Under the 2026 fee schedule the recordal fee is TRY 9,870; which party pays it is written into the agreement.

The Licensee's Seven Protective Clauses in the Agreement

1. Warranty of ownership and validity. The licensor should represent and warrant that it owns the trademark, that it is not aware of any conflict with third-party rights and that the register is clean.
2. Renewal undertaking. If the term of protection expires during the licence term, the licensor's obligation to renew the trademark on time and the sanction for failing to renew must be written in.
3. Defence obligation. The licensor's obligation to take action against third-party infringement, your notification duty and (under an exclusive licence) your right to sue, and cost sharing should be regulated.
4. Invalidation/revocation scenario. If the trademark is invalidated or revoked, the refund of fees and liability must be expressly written in; the statutory regime, as a rule, does not affect performed agreements retrospectively, and a refund can be argued only to the extent fairness requires — the agreement is what closes the uncertainty.
5. Continuity in the event of assignment. If the licensor sells the trademark, the passing of the licence to the assignee (assignment of the agreement, or a new agreement on the same terms) should be secured.
6. Scope and extension options. If the business grows, have the right to expand into new product groups or territories written in today, together with its terms; negotiate while your bargaining power is strong.
7. Exit provisions. On expiry and termination, the stock clearance period, what happens to semi-finished goods and packaging, the transition period and the amortisation of investment should be regulated.

The Licensee's Arithmetic in the Fee Structure

As important as the royalty rate is the definition of the royalty base: gross turnover, or net sales after returns and discounts? If you are giving a minimum royalty undertaking, sign knowing that you will still pay that amount in a scenario where sales fall short of expectations, and ask for a stepped minimum for the first years. The currency of the fee, the indexation for increases and the reporting periods should be clear; and in return for the licensor's right of audit, you should also have a mechanism for finalising the accounts (an objection period).

During the Licence: Compliance, Evidence and Digital Assets

• Follow the manual and document approvals. Obtain packaging and advertising approvals in writing; the defence that "verbal approval was given" is of no use in a termination dispute.
• Archive evidence of use on both sides. Keep a copy of the invoices and visual samples you send to the licensor on your own side as well; in a dispute, you will have your own evidence file too.
• Decide at the outset who owns the digital assets. In whose name the branded domain name, social media accounts and marketplace stores will be opened, and to whom they will be handed over on termination — if these lines are not written, this is where the toughest negotiation takes place on the day of termination.
• Do not neglect your own brand. In the shadow of the licensed trademark, register and keep alive your own trade name and trademark too; if the licence ends, do not be left nameless in the market.

5 Typical Licensee Mistakes

1. Paying the full fee for a sign still at the application stage. An agreement signed without payment conditional on registration and without a refund clause collapses together with the refused application.
2. Assuming exclusivity. The statutory default is the opposite; exclusivity that is not written in does not exist.
3. Leaving recordal to the licensor and forgetting about it. Recordal is your insurance; put the follow-up into your own calendar.
4. Signing a royalty without a defined base. The phrase "5% of turnover", unless turnover is defined, means renegotiating every year.
5. Never thinking about the exit. A business that has grown dependent on the trademark, from its shop sign to its packaging, can find itself without an identity overnight on the day of termination.

Three Real-World Scenarios

Scenario 1 — The scope trap. A food manufacturer takes a licence for a well-known trademark and starts producing branded snacks. Months later it emerges that the registration covers only "services" classes; in the product group it manufactures, the trademark is not protected at all. The permission obtained in return for the fee paid exists only on paper. Lesson: the class list before the fee, and the register before the class list.

Scenario 2 — The default exclusivity shock. A licensee who believes it is "the sole authorised seller" in its region sees a second licensed seller open in the same province. The agreement contains no exclusivity clause; under the statutory default the licence is non-exclusive, and the licensor's second licence is lawful. Lesson: exclusivity that is not written in does not exist.

Scenario 3 — The trademark changes hands. In the third year of its five-year agreement, the licensee learns that the trademark has been assigned. If the licence was recorded in the register, its position is protected against the new proprietor and the relationship continues; if it was not recorded, it sits down at the table with an assignee acting in good faith, holding only an agreement it can rely on against the former proprietor. Lesson: recordal is insurance not just for a rainy day — but for every register entry that changes hands.

Conclusion

Taking a licence means renting the strength of an established trademark — but the tenant's security lies not in the landlord's word but in the agreement and the register. The five-step formula is clear: verify the register record, have exclusivity written in, make recordal a precondition, turn the licensor's undertakings (renewal, defence, continuity) into clauses, and plan the exit on the way in. Once these are done, a licence is a lever that grows your business; if they are skipped, it is an irreversible investment in someone else's trademark. The moment your bargaining power is at its highest is the moment before signing — ask for all of the protective clauses at that moment.

Negotiating a Licence for a Trademark?

Send us the trademark number and the terms on offer via our contact page; we will pull the register record for you (scope, encumbrances, litigation, non-use risk), work with you to structure the clauses that protect the licensee's side of the agreement, and follow through on the recordal in the register. Our legal protection team runs the process from signing through to recordal.