My Article on “Inures to the Benefit” and Trademark Licensing

The July–August 2015 issue of The Trademark Reporter contains my article, uh, commentary entitled Inures to the Benefit and Trademark Licensing. (Yeah, the no-italics part is a little awkward when the title is part of a sentence.) Now that a decent interlude has passed ,I can make it available to you, dear reader. Go here for a PDF copy.

As I say in the author note, I wrote this commentary at the suggestion of Pam Chestek, she of the Property, intangible blog. Again, my thanks to Pam. Writing this article showed me that now that I’ve covered the obvious stuff, there’s no end to the transaction-specific words and phrases I could write about.

Incidentally, I received the following question from a reader:

Your conclusion is to rely on the Lanham Act. What if the licensed mark is not federally applied for and/or is not used in commerce?

I defer to Pam, who responded to me as follows:

While the language is codified in the Lanham Act, the concept goes back well before that. In my research the courts don’t really seem to bother with the nicety of whether the trademark is registered or not when deciding whether the statutory section applied, they just cite to the same provision in the Lanham Act in both situations. So it’s really the same whether the trademark is registered or not.

Also, Pam and I heard from someone who said that he’s long held that inures to the benefit language is one of two essential provisions to include in a license agreement. My response would be that whatever you’re trying to say with inures to the benefit, there has to be a better way to say it. But as I note in the article, I haven’t found a convincing reason to use the phrase at all.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

5 thoughts on “My Article on “Inures to the Benefit” and Trademark Licensing”

  1. Without spending a great deal of time on it, there seem to be several meanings, which are all in approximately the same territory.

    (1) will be owned by X (who will therefore benefit from ownership) – assuming goodwill is something that can be owned.
    (2) will be treated in law as use by X (who will therefore have certain legal benefits) – non-use of a trade mark being a ground for invalidity
    (3) will be treated in law as a party to the contract (and therefore enjoy any benefits associated with it, including the right to sue for breach)

    Inure is a fuzzy word that seems to be used to wrap up these disparate meanings in a conveniently brief, obscure and not-too-specific way. Will benefit, or benefits, is simpler, but sounds as though it might fall short of achieving the legal meanings mentioned above.

    The solution is presumably to be specific about the legal meaning. I am not sure whether benefits quite achieves this.

  2. Good, useful article.

    One logic step missing, for me, was the explicit assertion that a trademark licensee can be a “related company” as that term is used in 15 U.S.C. §1055 and defined in §1127.

    I reflexively assume a “related company” must be the mark owner’s subsidiary or otherwise jointly owned by the mark owner. That’s not, of course, the law. See, Estate of Coll-Monge v. Inner Peace Movement, 524 F. 3d 1341, 1348 (D.C. Cir.2008). The related company requirement can be satisfied when the nature and quality of the branded goods sold by a licensee is controlled by the mark owner – the mark owner need not have any ownership or other controlling interest in the “related company.” For some reason that’s not intuitive to me and I too-often forget that rule.


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