Under Canadian law charities and non-for-profit organizations can own trade-marks which may or may not be registered with the Canadian Trade-marks Office and can license use of those marks to others.
Under licensed use, the owner of the trade-mark is known as the “licensor”. The person or party licensed to use a trade-mark is known as a “licensee” or “permitted user”.
While a trade-mark license can, in Canada, be oral, this is not recommended.
Written licenses allow clarity as to which mark is under license, for what goods or services, the duration of the license, and the quality control provisions that govern the use of the trade-mark by the licensee. These are the minimum requirements of a trade-mark license and must be present even if the licensor and the licensee have some type of shared governance structure. For example, a national charity may wish to license its provincial organizations to use a mark. If the provincial organizations have legal identities separate from the national organization, a license must be put in place.
While a trade-mark owner may engage in as many licensing relationships as it wishes, it may also wish to exclusively license one party for one product or service. For example, a Foundation may own a trade-mark for fundraising services and hats and t-shirts. It may wish to exclusively license one party for the fundraising services and exclusively license another party for the hats and t-shirts. Typically, such relationships mean that the licensee is guaranteed that it is the sole or exclusive licensee allowed to offer the specific goods or services, that is, no other parties will be licensed to use the trade-mark for the same goods or services.
A license may also be defined territorially. As an example, a national charity may wish to license its provincial counterparts on a province-by-province basis, that is, the British Columbia organization can only make use of the licensed mark in that province.
A non-exclusive license means that the trade-mark owner can license multiple parties to use a trade-mark for the same goods or services.
Regardless of whether a license is exclusive, it must contain “quality control provisions” which allow the owner to control how the mark is used by the licensee. For example, if a trade-mark is licensed for t-shirts, the quality control provisions should set out the basic quality of the t-shirts to be offered to the public and how the trade-mark will be used on the t-shirts or their packaging. Also, the quality control provisions should specifically state that the licensor can inspect the quality of the t-shirts, perhaps annually. The licensor should follow through and inspect the t-shirts and how the mark is being used as required under the license and a record of that inspection and redress of any problems should be kept as proof that the licensor is exercising the quality control provisions.
A charity or non-for-profit organization should not permit use of its trade-marks by any other entity, even if that entity is related, without a license. Failure to have in place an adequate license governing use by another party can lead to loss of rights in a trade-mark and/or the inability to enforce rights in a trade-mark.