Trademark Licensing in India 2026: Registered User, TM-U Filing & Rules

Trademark Licensing in India 2026: Registered User, TM-U Filing & Rules

You built a brand from nothing. Late nights, trial and error, and finally, people recognise your name and trust it. Now someone wants to use that name too — a franchisee, a manufacturing partner, a regional distributor, or even a family member starting a related business. Before you say yes on a handshake, you need to understand trademark licensing, because getting this wrong can quietly cost you the very brand you built.

This guide breaks down how trademark licensing actually works in India under the Trade Marks Act, 1999 — who is a licensor, who is a licensee, what a "registered user" really means, how Form TM-U fits in, and why so many small businesses lose control of their brand simply because they never formalised the arrangement. Whether you are the brand owner thinking of licensing out your mark, or a business hoping to use someone else's trademark legally, this is the article you need before you sign anything.

What is Trademark Licensing

Trademark licensing is a legal arrangement where the registered proprietor of a trademark (the licensor) permits another person or business (the licensee) to use that trademark for specified goods or services, usually in exchange for a royalty or fee, while the licensor continues to own the mark.

In simple terms, licensing is renting out the right to use your brand name, logo, or tagline — not selling it. The ownership of the trademark never changes hands. What changes is that the licensee is now legally allowed to put your brand on their products, packaging, signage, or services, within the boundaries you set.

This is extremely common in India today. Think of a popular regional food brand that lets a partner in another state manufacture and sell products under the same name. Think of a clothing label that allows a retail chain to open "authorised" stores. Think of a software company permitting a reseller to market its product under the company's brand name in a new territory. All of these typically rest on a trademark licence, whether or not the parties have documented it properly.

Under the Trade Marks Act, 1999, the person actually using a registered trademark under permission does not automatically get any independent legal standing just because they are using the mark. That is why the law provides a mechanism for the licensee to be formally recorded as a "registered user" with the Trade Marks Registry, typically through Form TM-U. Recording this way gives the arrangement legal visibility and stronger protection, which we will get into in detail below.

Why Trademark Licensing Matters

For a business owner who has spent years and money getting a trademark registered, licensing is often the natural next step in growing revenue and reach. Instead of expanding to every city or country yourself, you let others use your brand under your terms and earn a royalty for it. This is how many multi-state and multi-country brand expansions happen without the original owner opening a single new outlet themselves.

But licensing matters just as much from a protection standpoint. A trademark is a valuable, sometimes the most valuable, asset a business owns. If you allow someone to use it informally — a verbal understanding, an email exchange, a WhatsApp message — and things go wrong later, you may find it very difficult to prove what was agreed, whether the arrangement has ended, or even that you were the one who gave permission in the first place.

There is also a subtler risk: unchecked or poorly controlled use of your trademark by a third party can dilute your brand's reputation, confuse customers, or in the worst case, weaken your own ability to enforce your trademark rights later. Indian trademark law expects a registered proprietor to exercise a reasonable degree of quality control over how a licensee uses the mark. Without that, courts may later question whether the "licence" was genuine at all, or whether the use by another party has made the mark deceptive or misleading to the public.

For licensees too, licensing matters because it gives them lawful cover. Using someone else's registered trademark without permission is not a grey area — it can expose the user to infringement claims, injunctions, and damages, even if they believed they had informal consent. A properly documented licence protects the licensee just as much as it protects the licensor.

Finally, in 2026, with e-commerce, franchising, and multi-city expansion being the default growth strategy for most Indian brands, licensing is no longer a niche concept reserved for large corporations. Small business owners, D2C founders, and regional manufacturers are entering into these arrangements more often than ever, frequently without realising the legal formalities involved.

Key Concepts: Registered User, Exclusive vs Non-Exclusive, Quality Control

Trademark licensing involves a set of concepts that every brand owner and licensee should understand before signing an agreement.

Licensor and licensee. The licensor is the registered proprietor of the trademark — the person or entity that legally owns the registration. The licensee is the person or business being permitted to use the mark. The relationship is fundamentally one of permission, not ownership transfer.

Registered user versus permitted user. This is one of the most misunderstood distinctions in Indian trademark practice.

A "registered user" is a licensee whose right to use the trademark has been formally recorded with the Registrar of Trade Marks, generally through an application in Form TM-U under the applicable provisions of the Trade Marks Act, 1999 and the Trade Marks Rules. Once recorded, the registered user's permitted use of the mark is treated, for many legal purposes, as use by the registered proprietor itself. This has real evidentiary value — for example, it can help support continued use of the mark (relevant in cases of non-use cancellation actions) and can strengthen the licensee's position if it ever needs to participate in enforcement or infringement proceedings connected to that use.

A "permitted user" is a broader, informal concept — someone who is using the mark with the consent of the registered proprietor but without that permission being recorded on the register. This arrangement can still be contractually valid between the parties, but it lacks the same statutory recognition and evidentiary weight that a recorded registered user enjoys. In case of a dispute — with a third party, or even between the licensor and licensee themselves — a permitted user faces a much harder task proving the legitimacy and scope of their rights.

Exclusive, non-exclusive, and sole licences. These describe how many people can use the mark at the same time in the licensed territory or field.

An exclusive licence means only the licensee can use the trademark for the agreed goods/services and territory — not even the licensor themselves can use it there during the licence period. A sole licence sits in between: the licensee is the only third party permitted to use the mark, but the licensor retains the right to use it themselves alongside the licensee. A non-exclusive licence means the licensor can grant the same rights to multiple licensees simultaneously, and can also continue using the mark itself. Most franchise and distribution-style arrangements in India tend to be non-exclusive or territory-specific exclusive licences, depending on how the brand wants to scale.

Quality control clauses. Because a trademark is meant to signal consistent quality and origin to consumers, Indian trademark law and practice place real importance on the licensor retaining a genuine degree of control over how the licensee uses the mark. A licence agreement should include quality control provisions — the licensor's right to inspect the licensee's product or service standards, approve packaging and marketing materials, and terminate the agreement if quality standards are not maintained. Without such control, a licence can start to look like the licensor has abandoned the mark to the licensee's use, which can undermine the trademark's protection and even the licensor's later enforcement rights.

Royalty. This is the consideration the licensee pays the licensor for the right to use the mark — usually a percentage of sales, a fixed periodic fee, or a combination of both. Royalty terms should be documented clearly, including payment frequency, reporting obligations, and consequences of non-payment, since this is often the first point of dispute in licensing relationships.

Territory, duration, and scope. A well-drafted licence specifies exactly which goods or services the licence covers, in which geographic territory, for how long, and whether it can be renewed, assigned, or sub-licensed. Vague or undefined scope is one of the most common sources of future disputes.

Documents & Information You Need

Before you approach a professional to prepare and record a trademark licence, it helps to have the following ready. This speeds up drafting and reduces back-and-forth.

• Certificate of trademark registration, or the application details if the mark is still pending registration
• Details of the registered proprietor (licensor) — full legal name, address, and constitution (individual, partnership, LLP, or company)
• Details of the proposed licensee — full legal name, business address, and constitution
• Class(es) of goods or services for which the licence is being granted
• Proposed territory of use (a specific state, all of India, or international markets if relevant)
• Duration of the licence and any renewal terms being discussed
• Whether the licence will be exclusive, sole, or non-exclusive
• Royalty structure and payment terms agreed between the parties
• Quality control mechanism the licensor wants to build in — inspection rights, approval processes for packaging/branding, standards to be maintained
• Any existing correspondence, term sheet, or informal agreement between the parties (even an email chain helps establish intent)
• Details of authorised signatories if either party is a company or LLP
• Board resolution or authorisation letter, where required by the company's internal governance, authorising the signing of the licence agreement
• Power of attorney in favour of the trademark agent or attorney who will file Form TM-U on your behalf

Having this information organised in advance also makes it much easier to spot gaps in the arrangement — for instance, realising there is no agreed royalty mechanism, or no clarity on what happens if the licensee wants to exit early.

Step-by-Step Process to License a Trademark (Registered User Recording)

1. Confirm trademark ownership and status. Verify that the trademark is validly registered (or at least applied for) in the name of the intended licensor, and check that the registration is current and not under any pending opposition, cancellation, or renewal lapse that could complicate the licence.

1. Negotiate the commercial terms. Before any paperwork, the licensor and licensee should agree in principle on the scope of goods/services, territory, duration, exclusivity type, royalty structure, and quality control expectations. Get this in writing early, even as a term sheet, to avoid misunderstandings later.

1. Draft a comprehensive trademark licence agreement. This is the core legal document and should cover the grant of rights, exclusivity, territory, duration, royalty and payment schedule, quality control and inspection rights, termination triggers, confidentiality, indemnity, dispute resolution, and what happens to unsold branded stock or signage when the licence ends. This document is typically prepared with the help of a trademark professional or lawyer to make sure it aligns with the requirements for later registration as a registered user.

1. Execute the agreement. Both parties sign the licence agreement, ideally with the document properly stamped as per the applicable state stamp duty rules, since stamping requirements can affect its admissibility as evidence later.

1. Prepare Form TM-U and supporting documents. To have the licensee recorded as a registered user with the Trade Marks Registry, an application in Form TM-U is prepared jointly by the registered proprietor and the proposed registered user, along with the licence agreement (or the relevant extracts/affidavit as prescribed), proof of the trademark registration, and any other supporting statements required under the applicable Trade Marks Rules.

1. File the application with the Registrar of Trade Marks. The application, along with the prescribed government fee, is filed with the appropriate Trade Marks Registry office having jurisdiction, either physically or through the official IP India online filing system, depending on current practice.

1. Respond to any examination queries. The Registrar's office may raise queries or seek clarifications or additional documents — for instance, on the scope of the licence, quality control clauses, or the authenticity of signatures. These need to be responded to within the prescribed timelines to avoid the application lapsing.

1. Registration of the registered user and public record update. Once the Registrar is satisfied, the registered user's details are entered against the trademark's record in the Register of Trade Marks, and this recording is generally reflected in the public trademark database as well.

1. Maintain ongoing compliance. After registration, both parties should keep track of royalty payments, renewal of the licence term (if applicable), any changes in the scope of use, and ensure the quality control mechanisms agreed in the contract are actually being followed in practice, not just on paper.

1. Update or cancel the registered user entry when the arrangement changes. If the licence is terminated, expanded, or the licensee changes, the parties should promptly inform the Registrar to keep the register accurate — an outdated registered user entry can itself become a source of disputes later.

Cost, Fees & Tax Considerations (2026)

Costs in a trademark licensing exercise generally fall into a few buckets: professional fees for drafting the licence agreement, stamp duty on the agreement (which varies by state and the manner of execution), the government fee payable for filing Form TM-U with the Trade Marks Registry, and possible fees for responding to Registry queries or expediting the process.

Because government fee schedules under the Trade Marks Rules are revised from time to time, and stamp duty rates differ significantly from state to state and depend on the value or nature of the transaction, it is important not to rely on any fixed figure you may see quoted elsewhere. Always verify the current rate/fee with a professional or the official IP India website before budgeting for this process.

On the tax side, royalty payments received by the licensor under a trademark licence are generally treated as income and may attract income tax as well as GST implications, since licensing the right to use a trademark is typically treated as a supply of service under Indian GST law. Depending on the licensor and licensee's registration status, GST may need to be charged on the royalty, and TDS provisions may also apply on royalty payments made by the licensee. These are areas where the specific treatment can depend on the structure of the parties (individual, partnership, LLP, company), whether the transaction is domestic or cross-border, and current rates and thresholds — so this is best confirmed with a chartered accountant or tax professional rather than assumed from a general guide. Cross-border trademark licensing (say, an Indian brand licensing its mark to an overseas licensee, or vice versa) can also bring in withholding tax and double taxation avoidance agreement considerations, which again should be checked with a professional familiar with the specific countries involved.

Timeline

The timeline for a trademark licensing arrangement has two separate tracks that are worth distinguishing.

The commercial and contractual track — negotiating terms, drafting the licence agreement, getting it reviewed by both sides, and signing it — can typically be completed within a few weeks, depending on how quickly the parties agree on commercial terms like royalty and exclusivity, and how much back-and-forth is needed on the quality control clauses.

The regulatory track — recording the licensee as a registered user through Form TM-U with the Trade Marks Registry — tends to take longer, since it depends on the current workload and processing speed at the relevant Trade Marks Registry office, whether the application is complete and free of discrepancies, and whether the Registrar raises any queries that need to be answered. As government processing timelines can shift from time to time, it is sensible to treat any specific number of months you may hear as indicative only, and to check the current processing status and expected timelines with your trademark professional or the official IP India resources before making business commitments that depend on the registered user entry being finalised by a particular date.

A practical point many businesses miss: the commercial licence can be signed and the licensee can, in many cases, begin using the mark under contract even while the registered user application is being processed — but until the recording is complete, the licensee does not get the additional statutory benefits that come with formal registered user status. This is exactly why delaying the TM-U filing "for later" is a common but risky shortcut.

Trademark Licensing vs Assignment vs Franchising (Key Distinctions)

These three terms get used loosely and interchangeably, but they mean very different things legally, and mixing them up can create serious problems.

Licensing versus assignment. A licence is permission to use the trademark — ownership stays with the licensor throughout, and the arrangement is usually for a defined term, after which rights revert fully to the licensor (or the licence is renewed). An assignment, on the other hand, is a transfer of ownership of the trademark itself, either fully or partially, with or without the accompanying goodwill of the business, from the assignor to the assignee. Once a trademark is assigned, the assignor generally gives up their ownership rights over the mark (to the extent assigned) — this is closer to a sale than a rental. If you only want to let someone use your brand while retaining ultimate control and ownership, you want a licence, not an assignment. If you genuinely intend to transfer ownership of the mark (for instance, as part of selling a business division), that calls for a properly documented assignment deed, which itself needs to be recorded with the Registrar.

Licensing versus franchising. Franchising is a broader commercial and operational model, of which trademark licensing is usually just one component. A franchise agreement typically bundles together the right to use the brand's trademark (a licence), along with the right to use the franchisor's business systems, operating manuals, training, supply chain arrangements, and often ongoing operational support, in exchange for franchise fees and royalty. In other words, almost every franchise involves a trademark licence, but not every trademark licence is a franchise. A simple manufacturing licence — where a factory is permitted to produce goods under your brand name for you to sell — does not necessarily involve the full operational playbook that a franchise does. Businesses planning to franchise in India should make sure their franchise agreements clearly separate out and properly address the trademark licensing component, since disputes over brand usage are among the most common triggers for franchise litigation.

Why this distinction matters practically. Many small business owners in India casually say they are "franchising" their brand when what they are actually doing is simply licensing the trademark to a distributor or manufacturer, with no real operational system attached. Conversely, some assume a long-term licence is effectively the same as selling the brand, and lose track of the fact that they, as licensor, are still the ones legally responsible for maintaining the mark's registration, renewals, and overall reputation. Getting clarity on which of the three structures actually reflects your business intent is one of the first things a good trademark or IP professional will help you sort out before any agreement is drafted.

Common Mistakes to Avoid

• Relying on verbal or informal permission. A friendly understanding or a string of WhatsApp messages is not a substitute for a written, signed licence agreement. When disputes arise, informal arrangements are extremely hard to enforce or even prove.

• Never recording the licensee as a registered user. Many businesses sign a private licence agreement and stop there, without filing Form TM-U with the Registrar. This means the licensee's use may not get the statutory recognition it could otherwise enjoy, and the arrangement remains invisible on the public trademark record.

• Vague or missing quality control clauses. Licences that don't specify how the licensor will monitor and enforce quality standards can weaken the licensor's position later and, in some scenarios, raise questions about whether the mark is being used in a way that misleads consumers.

• No clarity on exclusivity. Failing to specify whether a licence is exclusive, sole, or non-exclusive leads directly to disputes when the licensor later grants rights to someone else in the same territory or category.

• Ignoring royalty documentation and tax treatment. Royalty payments without proper invoicing, GST treatment, or TDS compliance can create tax exposure for both licensor and licensee down the line.

• Not defining what happens at termination. Agreements that don't address what the licensee must do with branded inventory, signage, marketing material, or domain names once the licence ends often result in prolonged, messy disputes.

• Treating licensing and assignment as interchangeable. Using assignment language when you mean to license (or vice versa) in the agreement can create serious ownership confusion that is difficult to unwind later.

• Skipping professional review of the trademark's actual registration status. Licensing a mark that is under opposition, has lapsed for renewal, or is registered in a different entity's name than assumed, can undermine the entire arrangement from day one.

• Assuming the licensee automatically gets enforcement rights. Without being recorded as a registered user (or without specific contractual provisions), a licensee may find they have very limited standing to act against infringers independently.

FAQ

What is the difference between a registered user and a permitted user under Indian trademark law

A registered user is a licensee whose right to use the trademark has been formally recorded with the Registrar of Trade Marks, typically through Form TM-U, giving the arrangement statutory recognition and evidentiary value. A permitted user has the licensor's consent to use the mark, but this consent is not recorded on the register, so it carries less formal legal weight in disputes.

Do I have to file Form TM-U every time I license my trademark

Filing Form TM-U to record a registered user is not always legally mandatory for the licence itself to exist as a contract between the parties, but recording it strengthens the licensee's legal standing and supports the licensor's enforcement position. Given the benefits, it is generally advisable to record significant or long-term licensing arrangements as registered users rather than leaving them informal.

Can I license my trademark to more than one business at the same time

Yes, this is possible through a non-exclusive licence, where the same trademark can be licensed to multiple licensees simultaneously, often for different territories or product categories. If you want only one licensee to have rights in a territory, you would instead use an exclusive or sole licence structure.

Is a trademark licence the same as selling my trademark

No. A licence only grants permission to use the trademark for a defined period and scope, while ownership remains with the licensor throughout. Selling a trademark is done through an assignment, which transfers ownership itself, either fully or partially, and is a legally distinct process with its own documentation and recording requirements.

What happens if I let someone use my trademark without any written agreement

Without a written agreement, you have very limited ability to control how your trademark is used, no documented quality control mechanism, and a weak position if a dispute arises over royalty, scope, or misuse of the brand. It can also make it difficult to later prove that the use was authorised at all, which matters if the mark's reputation is affected by poor quality control.

Does trademark licensing affect franchising agreements in India

Yes, trademark licensing is usually a core component embedded within a franchise agreement, alongside operational systems, training, and supply arrangements. A franchise agreement should clearly document the trademark licensing terms — scope, quality control, and territory — as a distinct part of the broader franchise relationship.

Who is responsible for trademark renewal during a licensing arrangement

The registered proprietor (licensor) generally remains responsible for maintaining and renewing the trademark registration, since ownership does not transfer under a licence. It is common, and advisable, for licence agreements to specify this responsibility explicitly so there is no ambiguity if a renewal deadline is missed.

Can a licensee take legal action against someone infringing the licensed trademark

This depends on the terms of the licence agreement and whether the licensee has been recorded as a registered user, since registered user status can support a licensee's participation in certain enforcement actions. Without this recording or specific contractual authorisation, a licensee's ability to independently act against infringers can be considerably limited, which is one more reason formal recording matters.

How Legal Suvidha Makes This Effortless

This is exactly the kind of process where one wrong document, a mismatched detail, or a missed deadline turns into a rejection, a resubmission, or a running penalty. Legal Suvidha handles the whole thing end-to-end so you can focus on your business.

• Fixed, all-inclusive price quoted upfront — professional fee plus government fee, itemised, with no hidden charges appearing later.
• A dedicated Chartered Accountant / Company Secretary who owns your case from the first call to the final certificate.
• Proactive updates and deadline alerts at every stage — we do not disappear after payment.
• Trusted by 10,000+ founders with a 4.9/5 rating and a multi-disciplinary team of CAs, CSs and lawyers.

Talk to a Legal Suvidha expert today for a free consultation and an exact, transparent quote on WhatsApp — and get it done right the first time.