To get a license to sell trademarked items, you identify the trademark’s owner through the USPTO database or the company’s website, send a written proposal describing your business and product plan, and negotiate a licensing agreement that spells out which goods you can sell, where, for how long, and what you’ll pay in royalties. The agreement is a contract, and the terms in it will govern your entire relationship with the brand.
When a License Is Actually Required
Not every sale of a branded product needs one. If you buy genuine, unaltered goods from an authorized distributor and resell them as-is, the first sale doctrine generally protects you. Once the trademark owner has sold the item into the marketplace, their right to control its further distribution is largely exhausted.
You need a license when you want to manufacture new products carrying someone else’s mark. Printing a brand’s logo on shirts you designed, producing accessories with a team’s name, or creating merchandise featuring a licensed character all require written permission. Using a registered trademark on your own goods without it exposes you to a federal infringement suit under the Lanham Act, which makes it illegal to use a mark in commerce in a way likely to confuse consumers about a product’s source.1Office of the Law Revision Counsel. 15 U.S. Code 1114 – Remedies; Infringement
Find the Trademark Owner
Start with the USPTO’s free Trademark Search database, which lets you look up any registered or pending mark by name, keyword, or design code.2United States Patent and Trademark Office. Search Our Trademark Database Each record shows the current owner’s name and correspondence address, whether the registration is live or dead, and the specific categories of goods and services covered.
That last detail matters. A mark registered for clothing doesn’t necessarily cover home décor, so confirm the registration is active in the product category you’re targeting. Search the exact name and any phonetic variations, because owners sometimes register several versions. Write down the owner’s name, address, and registration number for your outreach.
Many large brands post licensing information directly on their corporate websites, often under headings like Licensing, Partnerships, or Brand Collaboration. These pages frequently name a dedicated licensing agent or department and sometimes link to an application form. Starting there can save weeks, because the agent already knows the company’s standard deal terms and approval process.
Prepare a Proposal Worth Reading
Trademark owners receive pitches constantly, so yours has to look professional and complete. A strong proposal covers three things: your business, your product, and your plan to sell it.
- Company background. Who you are, how long you’ve been in business, your relevant experience, and any prior licenses you’ve held.
- Product details. Mockups, renderings, or physical samples showing exactly how the trademark will appear on your goods. Owners want to see that you’ll represent the mark at a quality level that matches their standards.
- Sales and marketing plan. Target customers, distribution channels, pricing, promotional plans, and financial projections covering anticipated sales volume and revenue. This is the section that tells the owner whether the deal is worth their time.
Treat the pitch like a job application. The owner isn’t just granting permission; they’re choosing a business partner whose products will reflect on their brand.
Submit the Request and Wait
Submission depends on the company’s setup. Larger corporations often route applicants through an online licensing portal with a standardized form and document uploads. If no portal exists, send your proposal to the legal or licensing department by email or certified mail, using the address you pulled from the USPTO record or the corporate site. Include a short cover letter summarizing what you’re asking for.
Expect a wait of several months. Owners of high-demand marks take longer. During review you may get follow-up questions or requests for more samples; responding quickly and thoroughly is itself part of what the owner is evaluating.
What the Licensing Agreement Will Cover
If the owner says yes, the terms of the deal live in a written licensing agreement. Every deal is different, but most address the same core issues.
Grant of Rights and Exclusivity
The grant clause defines which products you’re authorized to sell under the mark. It also states whether your license is exclusive or non-exclusive. Exclusive means you’re the only party permitted to use the mark for those products in a defined territory, and depending on the terms, not even the owner may compete with you there. Non-exclusive means the owner can grant similar rights to other licensees at the same time. Exclusive deals command higher royalty rates but give you a stronger competitive position.
Territory and Term
The territory clause restricts where you can sell, whether that’s the entire United States, a single region, or only online channels. The term sets how long the deal lasts, commonly two to five years, with conditions for renewal. Read the renewal language carefully: some agreements renew automatically, others require you to hit minimum sales targets first.
Quality Control
Every legitimate license includes quality control provisions, and this isn’t optional. Federal law requires trademark owners to maintain control over the nature and quality of goods sold under their mark.3Office of the Law Revision Counsel. United States Code Title 15 – 1055 Use by Related Companies Affecting Validity and Registration An owner who licenses a mark without exercising oversight risks losing it entirely through abandonment. Expect the agreement to give the owner the right to inspect and approve your products, packaging, and marketing materials before they reach consumers.
Indemnification and Insurance
Most agreements require you to indemnify the trademark owner against lawsuits arising from your products. If a customer sues over a defective item you manufactured, you bear the legal costs and any damages, not the brand owner. To back that promise, owners commonly require licensees to carry product liability insurance and often general commercial liability coverage as well. Get quotes early so these costs sit inside your projections.
What You’ll Pay
Financial terms typically have two parts: an upfront fee and ongoing royalties. The upfront payment, sometimes called a signing fee or an advance against royalties, secures your rights and offsets the owner’s administrative cost of onboarding you. Royalties are then calculated as a percentage of your net sales. The rate varies with the brand’s recognition, the product category, and whether the license is exclusive, but commonly falls between a few percent and the low double digits of net sales.
Many agreements also set a minimum annual royalty, a floor you owe regardless of how the products actually perform. Falling short of that minimum can trigger termination. Expect the owner to reserve the right to audit your financial records to verify royalty calculations; some agreements allow audits at any time, others limit them to once a year at the owner’s expense.
Before signing anything, have an intellectual property attorney review the contract. Small definitions decide large sums: how “net sales” is calculated, whether returns and chargebacks come out before the royalty applies, what happens to unsold inventory if the agreement ends. An experienced trademark licensing lawyer will spot terms you’d miss.
Obligations That Come With the License
Tax Reporting
Royalty payments you make under a trademark license are generally deductible as ordinary business expenses, because federal tax law allows deductions for payments required for the continued use of property in your trade or business when you don’t own the asset outright.4Office of the Law Revision Counsel. United States Code Title 26 – 162 Trade or Business Expenses
On the reporting side, if you pay $10 or more in royalties to the trademark owner during the year, you’re required to report those payments to the IRS on Form 1099-MISC.5Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information That threshold is low enough that virtually every active licensing arrangement will trigger a filing. Keep detailed records of royalty payments, upfront fees, and any audit-related expenses.
Product Safety Compliance
Holding the license makes you the manufacturer or importer of record, so responsibility for product safety compliance runs to you, not the brand owner. If your licensed products are consumer goods, Consumer Product Safety Commission rules apply. Children’s products face especially strict requirements: they must be tested by a CPSC-accepted laboratory before sale, and you’re legally obligated to report any defect that could create a substantial injury risk.6U.S. Consumer Product Safety Commission. General Use Products: Certification and Testing The owner’s quality control provisions cover brand standards; CPSC certification, labeling, and hazard reporting fall on the licensee. Build testing and certification costs into your budget before finalizing the deal.
What Happens If You Skip the License
The risk of selling trademarked items without permission is substantial, and it runs on two tracks.
Civil Liability
A trademark owner who sues for infringement can ask a federal court to issue an injunction immediately shutting down your sales.7Office of the Law Revision Counsel. United States Code Title 15 – 1116 Injunctive Relief Beyond that, the owner can recover the profits you earned from the infringing sales, the damages they suffered including lost sales, and the costs of bringing the lawsuit. A court can award up to three times the actual damages when circumstances warrant, and in cases the court considers exceptional, the owner can also recover attorney fees.8Office of the Law Revision Counsel. United States Code Title 15 – 1117 Recovery for Violation of Rights
For counterfeit goods, the owner doesn’t need to prove actual damages at all. They can elect statutory damages ranging from $1,000 to $200,000 per counterfeit mark per product type, and up to $2,000,000 per mark if the counterfeiting was intentional.8Office of the Law Revision Counsel. United States Code Title 15 – 1117 Recovery for Violation of Rights
Criminal Penalties
Trafficking in counterfeit trademarked goods is a federal crime. A first offense for an individual carries a fine of up to $2,000,000 and up to 10 years in prison. A second offense raises the prison exposure to 20 years and the maximum fine to $5,000,000. Businesses face steeper fines still: up to $5,000,000 for a first offense and $15,000,000 for a repeat violation.9Office of the Law Revision Counsel. United States Code Title 18 – 2320 Trafficking in Counterfeit Goods or Services These penalties target deliberate counterfeiting rather than accidental infringement, but the line between not knowing you needed a license and knowing without caring is thinner than most sellers assume. Get the license.