Inventions, designs, names, symbols, literary creations, artistic creations, and pictures used in trade are all considered forms of intellectual property (IP). IP gives creators and innovators legal rights over intangible property, motivating innovation and creativity by providing protection and economic benefits as well.
Intellectual Property is broadly divided into the following categories: copyrights, patents, trademarks, industrial designs, and trade secrets. Each of them perform a unique function in protecting original work and enable fair competition in the market.
Trademark can be a word, phrase, symbol, design, or a combination that identifies and distinguishes a product or service of one person or company to another person or company. It is crucial for the creation of brand identity, safeguarding a company's reputation, and the instilling of confidence in customers. They identify products or services in the marketplace to distinguish them from other competitors, which ensures customers can recognize the source and quality upon which they depend.
Additionally, a trademark is also a registered asset to the business with commercial use options through licencing, franchising or business sale which makes it important in terms of a brand's growth and creating revenue.
Trademark commercialisation is the formal means of turning a registered or legally protected trademark into something economically viable where a trademark (whether that be a brand name, logo, slogan or symbol) provides not only a way for businesses to distinguish their products or services in the marketplace, but also provides an intangible asset of considerable economic value. Trademark protection is about ensuring exclusivity of use and a right to enforce protection against misuse, mainly infringement and protection of the brand's integrity. Trademark commercialisation is more about monetising the protected brand into income, visibility and competitive advantage.
The scope of trademark commercialisation includes:
- Licensing, under which third parties are allowed to use the mark in exchange of royalties.
- Franchising, where a broader business model, including trademark rights, is shared.
- Merchandising, which allows the brand to appear on a variety of consumer goods.
- Assignment is the sale of the trademark itself in its entirety.
- Collateralisation, where trademarks are used as security for loans or investments.
The primary aims of trademark commercialisation are revenue generation, brand extension and leverage in the market. In the brand-driven society we live in today, trademarks are no longer simply a legal mechanism—they are business assets. Nurtured and properly commercialised, trademark rights enable a business to leverage brand awareness and convert goodwill into cash in hand.
Trademark commercialisation can take place in different forms, depending on how the rights holder wishes to. The most common forms of commercialisation are shown below:
- Licensing: Trademark licensing is the arrangement which a trademark owner (licensor) allows another party (licensee) to use the trademark according to agreed terms while the licensor retains the ownership of the trademark. There are two types of licensing agreements, where in one, the only licensee may use the trademark (and notwithstanding the licensor may use the trademark) – exclusive license, and in the other, more than one licensee may be allowed to use the trademark at the same time (the licensor still has usage rights) – non-exclusive license.
- Franchising: A franchising arrangement, the trademark is at the heart of the brand as it is transferred from the franchisor to the franchise, with other elements of the business model, operational manual, and know-how. The focus of franchising is to maintain brand consistency at each of the franchised outlets. Creating uniformity with a trademark enhances and sustains consumer recognition, reassures consumers of the trust they have in that brand while seeking to maintain the brand loyalty that consumers had with that brand.
- Assignment: The procedure by which a trademark owner (assignor) gives another individual (assignee) full ownership of the trademark. The individual who gets assigned becomes the new legitimate owner of the trademark and has the authority to enforce its rights. All goodwill specifically associated with that trademark needs to be assigned for the assignment to be legally valid (especially in common law countries like India and the UK).
- Merchandising: This involves using trademarks on products unrelated to the original goods/services, usually for promotional or fan engagement purposes. Features: Revenue through product sales or licensing deals and requires strong IP enforcement to prevent counterfeiting.
- Securitisation and Collateralisation: Trademark securitisation involves using the financial value of a trademark as collateral for loans or other financial instruments. It's common in luxury brands, entertainment, and tech industries
India's trademark regime is governed by the Trade Marks Act, 1999, which facilitates both the protection and commercial use of trademarks. Under Section 18, the owner who registers the trademark is granted exclusive rights to use the mark in relation to the registered goods or services. Section 28 ensures legal protection and the right to assign or license the trademark for commercial use. In India both common law rights i.e. from prior use and statutory rights i.e. from registration are recognized. Section 27 allows unregistered mark holders to file passing off suits, whereas registration allows for infringement actions. Enforcement can occur through civil remedies (Section 134), criminal penalties (Sections 103–105), or contractual dispute resolution (like arbitration in licensing/franchising). Courts of appropriate jurisdiction handle infringement and passing off cases.
Strategic Considerations in Commercialisation
- Valuation of Trademarks
Proper valuation is critical for licensing, franchising, securitisation, and mergers. Factors include market reputation, consumer loyalty, and revenue potential. - Risk of Brand Dilution
Excessive or uncontrolled use of a trademark, especially through licensing, can weaken its distinctiveness and reduce brand equity. - Maintaining Quality Control in Licensing/Franchising
Quality control clauses in agreements are vital to ensuring that licensees and franchisees maintain consistent product/service standards, protecting the brand's reputation. - Cross-Border Trademark Issues and International Treaties
India is a signatory to the Madrid Protocol, which, simplifies international trademark registration. But, businesses must still navigate differing national laws and enforcement mechanisms.
Case Studies
Companies like Coca-Cola and Disney effectively license their trademarks globally, generating substantial revenue while maintaining brand control. The brand licensing scheme for Amul permits licensed partners to manufacture and sell dairy products under its trusted brand name and a careful regime of quality standards reliefs quality control from the contract owner and helps ensure some semblance of brand integrity. There are notable examples of trademark licensing being improperly administered, such as with some luxury fashion brands that over-licensed their trademark and in doing so caused brand dilution and loss of exclusivity in the marketplace.
Risks and Challenges
- Trademark Squatting and Piracy: In some territories, we see third parties registering trademarks,, in racially discriminatory ways on the basis of bad faith registration., This will block the legitimate products and brand owners from their true rights.
- Loss of Distinctiveness: A trademark can lose safety and legal protection if it is used excessively, or not under the control of the rightful owner (for instance by granting licenses and franchises uncontrolled).
- Agreements: If licensing or franchising agreements are poorly drafted then disputes over royalties, territorial rights and quality of products may end in litigation.
- Enforcement in Digital/Online Markets: Online infringement, such as counterfeit products on e-commerce platforms and misuse in domain names, poses growing challenges for trademark enforcement.
Balancing legal protection and appropriate business strategy while commercialising trademarks is vital. Legal advisors are an important part of the process of structuring, drafting and negotiating agreements that help to maximise brand value and mitigate risk. Trademarks are not only a legal asset, but they also represent a business asset that generates revenue, presence in the market and competitive advantage.
References
- Lodha N, Thapliyal V and Nandkeolyar M (Strengthening IP Securitisation in India, 7 August 2024) accessed 5 June 2025
- Jain M and Singh S, 'EMERGING ISSUES AND CHALLENGES IN THE PROTECTION OF TRADEMARK IN INDIA' (2024) 4 INTERNATIONAL JOURNAL OF ADVANCED LEGAL RESEARCH accessed 5 June 2025
- Tomar V, 'Trademark Licensing & Franchising: Trends in Transfer of Rights' (2009) 14 Journal of Intellectual Property Rights 397 accessed 4 June 2025
- Shewale KT, 'COMMERCIALIZATION OF INTELLECTUAL PROPERTY RIGHTS: A COMPREHENSIVE REVIEW AND IMPLICATIONS ' (2023) 1 IPR Journal of Maharashtra National Law University, Nagpur 56 accessed 4 June 2025
- 'For Consumers' (International Trademark Association, 29 July 2024) accessed 4 June 2025
- 'What Is Intellectual Property (IP)?' (ip) accessed 4 June 2025
- Trade Marks Act, 1999
- com, 'Amul Topical Story' (Amul) accessed 7 June 2025
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
