Document type: Checklist Practice area: Intellectual Property — Trademarks Jurisdiction: United States (federal and state) Last reviewed: 5 September 2026

Part 1 — Before any license: fix the foundation

Ownership:

  • Clean, recorded chain of title to every mark to be licensed.
  • No marks stranded in a predecessor entity, a founder's name, or a merged subsidiary.
  • Any security interest or credit agreement restriction on licensing identified.

Registrations:

  • Registered in the classes covering the licensed goods, not just your core goods.
  • Registered in every country where the licensee will manufacture or sell — before licensing, because most of the world is first-to-file.
  • Maintenance current: renewals, declarations of use, no unanswered office actions.
  • Clearance search completed in each new class and each new country.

Brand assets:

  • Style guide exists: correct forms, colors, clear space, lockups, prohibited uses, notices.
  • Product specifications exist and are specific enough to test against.
  • Category strategy written: what is licensable, what is core and never licensed.

Part 2 — Licensee diligence

  • Facility visited; products they make for others examined.
  • Two current licensors contacted for references.
  • Quality management system reviewed — who signs off on production, what happens when a run fails.
  • Their other brands assessed for positioning fit.
  • Financial condition reviewed, including an insolvency scenario — note that after Mission Product Holdings a rejected license does not terminate.
  • Compliance record checked: recalls, regulatory actions, labor and sourcing issues.
  • The people who will do the work have been met, not just the business development team.
  • Honest answer recorded: can we actually evaluate the quality of goods in this category? If no, a third-party lab is named in the agreement and budgeted.

Part 3 — Economics

  • Royalty rate benchmarked against comparables, not guessed.
  • "Net sales" defined precisely — permitted deductions itemized; marketing costs, bad debt, and non-arm's-length affiliate sales excluded from deduction.
  • Minimum guaranteed royalties by year, escalating, tied to a business plan the licensee supplied.
  • Advance, and whether it is credited against minimums.
  • Marketing commitment stated as a percentage of net sales, with reporting.
  • Payment terms, currency, withholding tax treatment, interest on late payment.
  • Additional categories and territories structured as earned expansions, not granted upfront.

Part 4 — Scope

  • Licensed marks listed by registration number; style guide incorporated.
  • Whether the licensee may combine the marks with its own, and in what form.
  • Licensed products enumerated, not categorized — with an amendment mechanism for additions.
  • Territory by named country.
  • Online sales addressed expressly: own site, marketplaces, geo-restriction, what happens when goods cross borders.
  • Channels specified, including express treatment of off-price and marketplace channels.
  • Exclusivity type stated: exclusive / sole / non-exclusive — and conditioned on performance.
  • Reservation of all rights not expressly granted.

Part 5 — Quality control architecture

This is the part that protects the mark. Under 15 U.S.C. § 1055 licensee use inures to your benefit only because the licensee is a related company — one whose use you control as to nature and quality under 15 U.S.C. § 1127.

  • Written specifications as a schedule: materials, construction, performance, safety, testing, labeling, packaging. Drafted with the product team.
  • Pre-production approval required — no commercial production before written approval of a production sample.
  • Submission requirements defined (what, how many, with what documentation).
  • Review period defined; consequence of licensor silence defined.
  • Artwork and marketing approval for every use: packaging, hangtags, labels, advertising, website, social, trade show, press.
  • Production sampling at a stated frequency, tested by the licensor or a named lab.
  • Inspection rights for the licensee's and any third-party facility, on reasonable notice, at least annually.
  • Complaint and incident reporting: consumer complaints above a threshold, warranty claims, returns, recalls, regulatory contact.
  • Corrective action process: notice, cure period scaled to severity, right to halt production or require withdrawal, right to terminate for repeated or serious failures.
  • Product safety on a separate, faster track with no cure period.
  • Compliance obligations: product safety and labeling law, restricted substances, supply chain and labor standards, subcontractor approval.
  • Record-keeping obligations on the licensee, with a retention period surviving termination.
  • Mechanism for updating standards with reasonable notice and a transition period.

And the part that is not in the contract:

  • Internal commitment to actually exercise these rights. An unexercised inspection right is evidence against you.

Part 6 — Ownership and protective clauses

  • Licensor owns the marks; all use and goodwill inures to the licensor.
  • Licensee acquires no rights beyond the license.
  • No registration of the marks or anything confusingly similar, anywhere in the world; obligation to assign anything acquired.
  • Obligation to notify of third-party filings the licensee becomes aware of.
  • Proper use: style guide compliance, correct notices, use as an adjective, no genericizing or diluting use.
  • No challenge to validity or ownership.
  • Notification of infringement, with cooperation; control, cost, and recovery allocated.
  • No sublicensing without consent — and contract manufacturers treated as sublicensees.
  • Any permitted sublicense binds the sublicensee to the same quality obligations and gives the licensor direct rights.
  • No assignment without consent; change of control expressly defined as an assignment.

Part 7 — Reporting and audit

  • Quarterly royalty reports in a specified format: gross sales, itemized deductions, net sales, rate, royalty due — by product, territory, and channel.
  • Books and records maintained for a defined period, surviving termination.
  • Annual audit right on reasonable notice, by the licensor or its accountants.
  • Cost shifting on an underpayment above a stated threshold (commonly 5%), plus shortfall and interest.
  • Compliance reporting folded into the same cycle: insurance certificates, subcontractor lists, quality metrics, marketing spend against commitment.
  • The audit right is actually exercised on significant licensees on a rotating basis.

Part 8 — Termination and exit

  • Material breach with cure period; non-payment on a shorter period.
  • Quality breaches on a separate track; no cure period for safety issues or deliberate unauthorized use.
  • Failure to meet minimums: termination or conversion of exclusivity, at licensor's election.
  • Insolvency and change of control.
  • Brand damage termination right for conduct, not just products.
  • Sell-off period defined: length, channels, pricing, royalties still payable, reporting continues, conditions on availability.
  • Destruction or delivery of goods, packaging, labels, tooling and molds, and marketing materials, with certification.
  • Schedule of domains, social handles, and marketplace storefronts maintained during the term and transferred on termination.
  • Removal of the marks from the licensee's corporate name.
  • Return or destruction of confidential specifications; final royalty accounting.
  • Survival clause: confidentiality, indemnity, ownership, audit, dispute resolution, post-termination obligations.

Part 9 — Insurance and indemnity

  • Licensee indemnifies for product liability and its own conduct.
  • Licensor indemnifies for infringement claims arising from the marks as authorized.
  • Product liability insurance at a level appropriate to the goods, naming the licensor as additional insured.
  • Certificates delivered at signing and annually thereafter, with a calendar entry.
  • Notice obligations on cancellation or material change of coverage.

Part 10 — The franchise screen

Run this before signing any royalty-bearing trademark license.

  • Element 1 — trademark license? (Yes, by definition.)
  • Element 2 — significant control over or assistance to the licensee's method of operation?
  • Element 3 — required payment?

All three = a franchise, whatever the parties call it.

  • Distinguish product quality control (specifications, testing, approvals, inspections of goods) from control of the licensee's business (operations manual, mandated hours or site, required equipment from designated vendors, mandated staff training, required marketing programs).
  • Exemptions considered: minimum payment threshold, fractional franchise, leased department, state-specific single-trademark-licensee provisions.
  • State franchise registration requirements checked for each state of offer or operation.
  • State business opportunity statutes checked.
  • Industry-specific dealer/distributor protection statutes checked (vehicles, equipment, alcohol, petroleum).
  • Reviewed by someone who actually practices franchise law.

Part 11 — International adaptations

  • Marks registered before licensing in every licensed jurisdiction.
  • License recordation requirement checked with local counsel — in some jurisdictions licensee use does not count toward use requirements unless recorded.
  • Use evidence collected and retained per jurisdiction against non-use cancellation.
  • Quality control mechanism realistic at distance — third-party inspection service named in the agreement.
  • Governing law, forum, and an enforceable award path where the licensee's assets are.
  • Interim relief realistically available.
  • Extraterritorial limits understood — 15 U.S.C. § 1114 and § 1125(a) reach domestic uses in commerce.
  • Local formalities budgeted: notarization, legalization, translation, stamp duty, exchange control, royalty withholding.

Part 12 — Onboarding and administration

  • Kickoff held with legal, brand, product, and licensee counterparts.
  • Package delivered: style guide, specifications, approval templates, contacts, reporting templates, obligation calendar.
  • Submission system set up — shared folder or queue, not email.
  • First artwork and first production sample reviewed carefully and on time.
  • Named program owner — a person, not a department.
  • Approval service levels are ones you can actually meet.
  • All recurring dates calendared: royalty reports, insurance, inspections, minimums measurement, renewal and termination notice deadlines, registration maintenance in every licensed country.
  • Quarterly business reviews scheduled with significant licensees.
  • Licensed products bought at retail periodically and examined.
  • Marketplaces monitored for diversion and unauthorized sellers.
  • Scope creep addressed in writing and by amendment, never by acquiescence.

Part 13 — The control file

The file that answers a naked licensing challenge. Maintain it as you go.

  • Every approval, with date, submission, decision, and decision-maker.
  • Every rejection and the reason.
  • Every inspection report.
  • Every sample result.
  • Every corrective action notice and resolution.
  • Complaint and incident records.
  • Test: pick a licensee at random. Could you prove, from documents alone, that you controlled the nature and quality of its goods over the last three years? If not, fix it now.

Part 14 — Annual program review

  • Licensee scorecard: royalties vs. minimums, quality record, approval responsiveness, complaints, marketing spend, brand fit.
  • Underperforming or brand-damaging licensees identified — and actually terminated.
  • All licensed marks registered and current in all licensed countries.
  • All licenses recorded where recordation matters.
  • Terms, renewals, and notice deadlines confirmed.
  • Control file audited on a sample basis.
  • Specifications and style guide refreshed; updates issued under the contractual mechanism.

Part 15 — The licensee's checklist

  • Term long enough to recover investment; renewal not purely discretionary.
  • Approval process: defined submissions, fixed response period, deemed approval on silence, specific reasons for rejection, approvals that stay approved.
  • Standards changes: notice, transition period, treatment of existing inventory and committed orders.
  • Licensor warranties: ownership, registration in your territory, no pending challenge, no conflicting license.
  • Indemnity for third-party claims arising from authorized use.
  • Licensor obligation to maintain registrations and to enforce — or your right to act.
  • Insolvency protection: escrow of specifications, step-in rights to maintain registrations, set-off.
  • Minimums tied to a plan you believe, with relief for licensor delay and events outside your control.
  • Sell-off period matched to your actual inventory cycle, not conditioned on freedom from any breach.
  • Change of control: consent not unreasonably withheld, with objective criteria.

Part 16 — Diagnosing a program you inherited

  • List every license. Confirm each is signed, in term, and locatable.
  • For each: are there quality control provisions, and are they specific?
  • For each: is there a control file?
  • Any licensee operating outside scope — product, territory, or channel?
  • Any sublicensees or contract manufacturers not bound by flow-down obligations?
  • Any royalty-bearing license that has never had a franchise screen?
  • Any licensed country where the mark is unregistered, or registered to the licensee?
  • Any assignment in the chain that did not carry the goodwill — 15 U.S.C. § 1060 makes an assignment in gross invalid.
  • Any intent-to-use application assigned before a verified statement of use was filed?
  • Prioritize: fix the unregistered countries first, then the licenses with no control provisions, then the control files.

Related documents

This checklist is general information, not legal advice, and does not create an attorney-client relationship.