The only way to legally sell items with a trademark that you do not own is to obtain a license from the trademark owner. Trademarks are valuable property rights and are vigorously protected by their owners in most cases -- even against a small, localized business. Because the trademark owner has the exclusive right to use the trademark on his items, you must meet the requirements of the trademark owner to obtain a license to use the trademark.
Trademark Basics
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A trademark is created when a distinctive design, word or logo is identified with a product or service that is actually used in commerce. The business owner establishes trademark rights from the first use of the trademark without the need for any type of government regulation. Trademark rights continue as long as the mark remains in continuous use. Trademark rights created solely through use in commerce are generally limited to the geographical location where the items using the mark are sold. The ™ symbol may also be used with such trademarks, but it is not required.
Registered Trademarks
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To expand trademark rights, the owner can register the trademark with either the state or federal government, or both. State registration is typically done through the secretary of state's office and provides the owner with the right to exclusive use of the trademark throughout the state. Federal registration is done through the U.S. Patent and Trademark Office. Obtaining federal registration gives the trademark owner the exclusive right to use the trademark throughout the U.S. and the right to use the symbol ® with the trademark.
The owner of a federally registered trademark has greater remedies when someone infringes on the trademark. These remedies include the right to sue for trademark infringement in federal court, obtain the infringer's profits and threefold damages and to recover the costs incurred in the lawsuit.
Trademark Licensing
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Every trademark owner has the right to license other businesses to use the trademark. Companies and organizations with well-known federally registered trademarks typically have established guidelines for submitting proposals to license the trademark. If the item you want to sell with the trademark meets the owner's requirements, you should be able to negotiate a nonexclusive licensing agreement to use the trademark.
If you are unsure how to contact the owner of a registered trademark, you can search the records of the U.S. Patent and Trademark Office for the owners of federally registered trademarks through the Trademark Electronic Search System, or TESS, on its website. The ability to search state registered trademarks vary by state, with some states providing the information online and others making it available by mail or phone.
Other Considerations
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Before you contact a trademark owner about a licensing agreement, conduct market research and analyze whether using the trademark with your merchandise will be profitable enough to warrant the costs involved. A portion of the price you charge for your merchandise will be paid as a licensing fee to the trademark owner.
Negotiating a licensing agreement for using a trademark will require you to retain an attorney to review the agreement -- before you sign it -- due to its complexity. Attorney's fees are another cost added to the price of your product. If the licensing agreement requires you to submit periodic audited financial and sales information to the trademark owner, these additional accounting fees also will be in the product price. Consider whether it may be more profitable to create your own trademark for your merchandise rather than to use a licensing agreement.
