Trade Mark Licence Agreement (Hong Kong)
TRADE MARK LICENCE AGREEMENT
Trade Marks Ordinance (Cap. 559), Hong Kong SAR
This Trade Mark Licence Agreement is entered into on [Agreement Date] between:
(1) [Licensor Name] (CRN: [Licensor CRN]) of [Licensor Address] (“the Licensor”); and
(2) [Licensee Name] (CRN: [Licensee CRN]) of [Licensee Address] (“the Licensee”).
1. THE LICENSED MARK
1.1 The Licensor is the registered proprietor of the trade mark: Registration No. [Trade Mark Number], [Trade Mark Description], registered in [Classes] (“the Mark”).
2. GRANT OF LICENCE
2.1 The Licensor grants to the Licensee a [Licence Type] licence to use the Mark in connection with: [Permitted Goods].
2.2 Territory: [Territory].
2.3 Duration: [Licence Duration] from the date of this Agreement.
2.4 Sublicensing: [Sublicensing]. Any sublicence requires the Licensor’s prior written consent and must be on terms no less restrictive than this Agreement.
2.5 The Licensor retains all ownership rights in the Mark. The Licensee acknowledges that use of the Mark inures to the benefit of the Licensor.
3. QUALITY CONTROL
3.1 The Licensee shall comply with the following quality standards: [Quality Standards].
3.2 Inspection rights: [Inspection Rights]. The Licensor may inspect the Licensee’s premises, products, and marketing materials at reasonable times upon 7 days’ notice to verify compliance.
3.3 The Licensee shall submit samples of all goods and marketing materials bearing the Mark to the Licensor for approval before first use.
3.4 The Licensor may require the Licensee to cease use of any materials that do not meet the quality standards within 14 days of notice.
4. ROYALTIES
4.1 Royalty structure: [Royalty Structure]. Rate/amount: [Royalty Rate]. No GST or VAT applies in Hong Kong.
4.2 Payment frequency: [Payment Frequency]. Payments are due within 30 days of the end of each reporting period.
4.3 The Licensee shall provide royalty reports detailing net sales and royalty calculations at each payment date.
4.4 The Licensor may audit the Licensee’s records once per year at the Licensor’s expense, upon 14 days’ notice.
5. REGISTERED USER
5.1 The Parties shall apply to record the Licensee as a registered user of the Mark on the Trade Marks Register in accordance with Section 30 of the Trade Marks Ordinance (Cap. 559).
5.2 Use of the Mark by the Licensee shall be deemed use by the Licensor for the purposes of preventing revocation for non-use under Section 52.
6. TERMINATION
6.1 Either Party may terminate for material breach not remedied within 14 days of written notice.
6.2 The Licensor may terminate immediately if the Licensee fails to meet quality standards or uses the Mark in a manner that is deceptive or damaging to the Mark’s reputation.
6.3 Upon termination, the Licensee shall immediately cease all use of the Mark, remove the Mark from all goods and materials, and destroy all unused labels and packaging bearing the Mark.
7. GOVERNING LAW
7.1 This Agreement is governed by the laws of the Hong Kong Special Administrative Region of the People’s Republic of China.
7.2 The Parties submit to the exclusive jurisdiction of the Hong Kong courts.
EXECUTION
IN WITNESS WHEREOF, the Parties have executed this Trade Mark Licence Agreement as of the date first written above.
Licensor (Authorised Signatory)
________________
Signature
Licensee (Authorised Signatory)
________________
Signature
What Is a Trade Mark Licence Agreement (Hong Kong)?
A Hong Kong Trade Mark Licence Agreement is the legal contract by which the registered owner of a trade mark (the licensor or proprietor) grants another party (the licensee) the right to use the mark in connection with specified goods or services, in a defined territory, and for a specified duration. Governed by the Trade Marks Ordinance (Cap. 559) and the common law of contract, the agreement allows the licensor to commercialise the mark while retaining proprietorship — a central distinction from a trade mark assignment, which transfers ownership outright.
Hong Kong trade marks are registered by the Trade Marks Registry, which operates under the Intellectual Property Department (IPD). Registration is governed by Cap. 559, which aligns Hong Kong’s trade mark law with international standards set by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the WIPO-administered Madrid Protocol, to which Hong Kong acceded in 2023 through China’s membership. A registered Hong Kong trade mark provides the proprietor with the exclusive right to use the mark in Hong Kong in relation to the registered classes of goods or services, and to take infringement action in the District Court or Court of First Instance against unauthorised use.
Section 30 of Cap. 559 provides that a licence of a registered trade mark may be general or limited — limited as to territory, permitted goods or services, manner of use, or duration. Licences may be exclusive (the licensee alone may use the mark, excluding even the proprietor), sole (only the licensor and licensee may use the mark), or non-exclusive (the proprietor may grant further licences). A licensee may be recorded on the Trade Marks Register as a registered user, providing public notice of the licence and enhanced procedural rights in infringement proceedings.
Quality control is a legally and commercially critical element of any trade mark licence. A trade mark functions as a badge of origin — it signals to consumers that goods or services bearing the mark come from, or are authorised and quality-controlled by, the proprietor. A licence granted without adequate quality control provisions risks deceptive use of the mark (misleading consumers about the quality or origin of goods), which may result in revocation of the mark’s registration under Section 53(1)(c) of Cap. 559.
Hong Kong does not impose GST or VAT. All royalties, licence fees, and minimum guaranteed payments under the agreement are expressed in Hong Kong Dollars (HKD) and the stated amounts are the total payable. Forms Legal provides a free Trade Mark Licence Agreement template for Hong Kong, compliant with Cap. 559. Available as PDF and Word download.
Registration of the trade mark licence as a registered user entry on the Hong Kong Trade Marks Register under Section 30 of the Trade Marks Ordinance (Cap. 559) is strongly recommended. A registered user entry provides public notice of the licence, protects the licensee against the mark being assigned to a third party without notice of the licence, and gives the licensee enhanced standing to bring or intervene in infringement proceedings before the District Court or Court of First Instance. Use of the mark by a registered user is treated as use by the proprietor for the purposes of preventing revocation for non-use under Section 52 of Cap. 559 — an important protection where the proprietor licences the mark rather than using it directly. Forms Legal provides a free Trade Mark Licence Agreement template for Hong Kong, compliant with the Trade Marks Ordinance (Cap. 559). Available as PDF and Word download.
When Do You Need a Trade Mark Licence Agreement (Hong Kong)?
A Trade Mark Licence Agreement is needed whenever a trade mark owner in Hong Kong wishes to authorise another party to use their registered mark without transferring ownership. The agreement creates the legal framework for the licensing relationship, protects the value of the mark through quality control provisions, and documents the commercial terms.
Franchise operations: A franchisor establishing a franchise network in Hong Kong grants each franchisee a trade mark licence as the core element of the franchise relationship. The franchisee uses the franchisor’s trade marks in connection with their franchised business. The trade mark licence within the franchise agreement must comply with Cap. 559 and should include detailed quality control obligations to maintain brand standards across all franchise outlets. The Intellectual Property Department’s Trade Marks Registry should be notified of the licence through a registered user application.
Distributor and retail agreements: A brand owner appointing a distributor or retail partner in Hong Kong to sell branded goods must licence the trade marks to that distributor for use in marketing, packaging, and retail display. The licence should be limited to the Hong Kong territory and to the specific goods covered by the distribution arrangement.
Merchandising and brand licensing: Brand owners in the entertainment, sports, fashion, and lifestyle sectors licence their trade marks to manufacturers and retailers for use on merchandise — clothing, accessories, stationery, collectibles, and promotional items. Merchandising licences require rigorous quality control provisions and regular sample approval processes.
Co-branding and partnership arrangements: Where two brands wish to collaborate on a product or marketing campaign, each party licences its mark to the other for use in the co-branded context. The licence must be carefully limited to the specific co-branded products or campaign to prevent either party’s mark being used outside the agreed scope.
Hong Kong company expansion: A foreign company expanding into Hong Kong may licence its overseas trade marks to its Hong Kong subsidiary or joint venture partner for use in the Hong Kong market. Even within a corporate group, a written licence is commercially and tax-wise preferable to an informal arrangement — it documents the basis on which intercompany royalties are paid and supports transfer pricing positions with the Inland Revenue Department.
Franchise master licence arrangements: An international franchisor may appoint a Hong Kong master franchisee who is granted the right to sub-license the marks to individual franchise operators in the Greater China region. The master licence agreement must address the chain of sub-licensing and quality control obligations running from the international franchisor through to the sub-licensees.
What to Include in Your Trade Mark Licence Agreement (Hong Kong)
A Hong Kong Trade Mark Licence Agreement must be precisely drafted to protect the licensor’s trade mark rights, define the licensee’s permitted use, and comply with the Trade Marks Ordinance (Cap. 559). Forms Legal’s template covers the following essential elements.
Identification of the licensed mark: The full description of the trade mark being licensed; the registration number and registration date at the Hong Kong Trade Marks Registry; the registered classes of goods or services under the Nice Classification system; and the expiry date of the current registration period (trade mark registrations in Hong Kong are for 10 years, renewable indefinitely). Where multiple marks are licensed (word marks, device marks, combined marks), each must be separately identified.
Licence type: Whether the licence is exclusive (the licensee is the only party entitled to use the mark, and the licensor itself undertakes not to use the mark in the licensed territory and class), sole (only the licensor and licensee may use the mark), or non-exclusive (the licensor retains the right to grant further licences). The commercial value — and the royalty rate — differs significantly between exclusive and non-exclusive licences.
Permitted use: The specific goods or services in relation to which the licensee may use the mark; the territory (Hong Kong, Greater China, Southeast Asia, or worldwide); the duration of the licence; and any restrictions on the manner of use (for example, the mark must always appear with the ® symbol, must be used in its registered form without modification, and must appear in a specified minimum size on packaging).
Quality control: Minimum quality standards for goods or services bearing the mark; the licensor’s right to inspect the licensee’s premises, products, and manufacturing processes; the requirement for the licensee to submit samples for approval before marketing; the licensor’s right to audit the licensee’s compliance with quality standards; and the right to terminate the licence immediately if quality standards are not maintained. Without adequate quality control, the licence risks rendering the mark deceptive under Section 53(1)(c) of Cap. 559.
Royalty terms: The royalty rate (percentage of net sales, flat fee per unit, or fixed annual royalty); the currency (HKD — no GST or VAT applies); payment frequency (monthly, quarterly); minimum guaranteed royalties; the right of the licensor to audit the licensee’s accounts; and late payment interest.
Registered user provisions: Whether the parties will apply to the Trade Marks Registry to record the licence as a registered user entry under Section 30 of Cap. 559; who bears the application fee; and the licensor’s obligation to consent to the registered user application.
Sublicensing: Whether the licensee may grant sublicences; if permitted, the conditions (prior written consent of the licensor, minimum terms to be included in any sublicence, quality control chain); and the licensee’s liability for sublicensee compliance.
Infringement: The licensor’s primary obligation to take infringement proceedings against unauthorised use; the licensee’s right under Section 30(4) of Cap. 559 to call on the licensor to take proceedings and, if the licensor fails to do so within 2 months, to bring proceedings in its own name.
Termination: Grounds for termination (breach, insolvency, cessation of business); post-termination obligations (the licensee must cease all use of the mark and destroy all branded materials); and the effect of termination on registered user entries.
Governing law: Laws of the Hong Kong Special Administrative Region, with disputes subject to the jurisdiction of the Hong Kong courts or HKIAC arbitration. The forms-legal.com Trade Mark Licence Agreement (Hong Kong) template covers the mandatory elements under Trade Marks Ordinance (Cap. 559).
Sources & Citations
Statutory citations link to official government sources.
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Trade Mark Licence Agreement (Hong Kong) (Hong Kong) [Legal document template]. Forms Legal. https://forms-legal.com/hong-kong/business/intellectual-property/trademark-licence-hong-kong
"Trade Mark Licence Agreement (Hong Kong) (Hong Kong)." Forms Legal, 2026, https://forms-legal.com/hong-kong/business/intellectual-property/trademark-licence-hong-kong.
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year = {2026},
howpublished = {\url{https://forms-legal.com/hong-kong/business/intellectual-property/trademark-licence-hong-kong}},
note = {Free legal document template. Based on Trade Marks Ordinance (Cap. 559)}
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Frequently Asked Questions
Under the Trade Marks Ordinance (Cap. 559), a licensee of a registered trade mark may be recorded as a “registered user” on the Trade Marks Register. While registration as a registered user is not mandatory for a licence to be valid between the parties, it provides significant legal benefits. Section 30 of Cap. 559 provides that a licence to use a registered trade mark may be general or limited. A limited licence may be limited as to: the goods or services for which the mark may be used; the manner of use; the territory; and the period of use. Section 30(4) provides that where a licence authorises the licensee to use a mark, the licensee may call on the proprietor to take infringement proceedings. If the proprietor refuses or fails to do so within 2 months, the licensee may bring proceedings in their own name as if they were the proprietor. Registration as a registered user under Section 30 provides the licensee with: public notice of the licence on the Trade Marks Register; enhanced standing in infringement proceedings; and protection against third parties who might otherwise acquire the mark without knowledge of the licence. The application to record a registered user is made on the prescribed form with the prescribed fee (payable in HKD). Both the proprietor and the licensee must consent to the registration. The Registrar will record the licence on the Register, specifying whether it is exclusive or non-exclusive and any limitations.
Quality control is a fundamental element of any trade mark licence, both as a matter of commercial prudence and legal necessity. A trade mark functions as a badge of origin — it tells consumers that goods or services bearing the mark come from, or are authorised by, the trade mark owner and meet certain quality standards. If the proprietor grants a licence without maintaining quality control over the licensee’s use of the mark, the mark may become deceptive — consumers may be misled about the origin or quality of the goods or services. This can have several legal consequences. Revocation for deceptive use: under Section 53(1)(c) of the Trade Marks Ordinance (Cap. 559), a mark may be revoked if, as a result of the manner in which the mark has been used by the proprietor or with their consent, it is liable to mislead the public, particularly as to the nature, quality, or geographical origin of the goods or services. Dilution of distinctiveness: if the mark is used inconsistently by different licensees with different quality standards, the mark’s distinctiveness may be diluted, reducing its commercial value and potentially rendering it vulnerable to invalidity proceedings. Passing off liability: if a licensee’s goods or services are of poor quality, the proprietor may face passing off claims from consumers who relied on the mark as an indicator of quality.
Whether a trade mark licensee may grant sublicences depends entirely on the terms of the licence agreement. The Trade Marks Ordinance (Cap. 559) does not prohibit sublicensing, but it does not create an automatic right to sublicense either.
Section 30(1) provides that a licence may authorise the licensee to grant sublicences. If the licence agreement is silent on sublicensing, the default position under Hong Kong common law is that the licensee does not have the right to sublicense. The right to sublicense must be expressly granted.
If sublicensing is permitted, the licence agreement should address: whether the licensee needs the proprietor’s prior written consent for each sublicence; the minimum terms that must be included in any sublicence (particularly quality control obligations); the proprietor’s right to approve sublicensees; the licensee’s liability for sublicensee compliance; and whether the sublicence terminates automatically if the head licence terminates.
Use of the mark by an authorised sublicensee is treated as use by the proprietor for the purposes of Section 52 (revocation for non-use), provided the sublicence is authorised under the head licence.
The sublicensee may also be recorded as a registered user on the Trade Marks Register, providing the same benefits as a direct licensee.
From a practical perspective, sublicensing is common in franchise arrangements, distribution networks, and brand licensing programmes. The proprietor should ensure that the quality control chain extends to sublicensees to prevent deceptive use of the mark.
Royalty income received by a Hong Kong-resident trade mark licensor in respect of the use of a trade mark in Hong Kong is subject to profits tax under the Inland Revenue Ordinance (Cap. 112). Hong Kong's profits tax rate for corporations is 16.5% (with a two-tiered rate of 8.25% on the first HK$2 million of assessable profits for qualifying entities). For individuals carrying on a business that includes trade mark licensing, the applicable rate is the lower of the standard rate (15%) or the progressive personal tax rates. Royalties received from a non-Hong Kong licensee for use of the trade mark outside Hong Kong are generally not subject to Hong Kong profits tax, as they do not arise in or derive from Hong Kong. Withholding tax on royalties: Hong Kong does not impose withholding tax on royalties paid by Hong Kong licensees to non-resident licensors, which is a significant advantage compared to many other jurisdictions. A non-resident trade mark owner licensing its mark for use in Hong Kong is generally not subject to Hong Kong profits tax on the royalties received, unless it has a permanent establishment in Hong Kong or the royalties are deemed to arise in Hong Kong under the Inland Revenue Ordinance. Deeming provisions: Section 15(1)(a) of the Inland Revenue Ordinance deems certain royalties to be taxable in Hong Kong, including amounts received by a non-resident from a Hong Kong taxpayer for the use of intellectual property in Hong Kong. Specific advice from a Hong Kong tax adviser should be obtained for cross-border royalty arrangements.
When a registered trade mark is assigned (sold) to a new proprietor, the effect on existing licences depends on the terms of both the licence agreement and the assignment agreement. Under the Trade Marks Ordinance (Cap. 559), a licence is binding on every successor in title to the grantor’s interest (Section 30(5)), except a purchaser in good faith for value without notice (actual or constructive) of the licence. This means that if the licence is registered on the Trade Marks Register as a registered user entry, the new proprietor takes the mark subject to the licence — the licence continues in force. If the licence is not registered, the position is less certain. A purchaser who acquires the mark without knowledge of the licence may not be bound by it. This underscores the importance of registering the licence as a registered user entry. The licence agreement should include a “successors and assigns” clause confirming that the licence binds the parties’ successors and assigns. It may also include: a requirement that the proprietor notify the licensee before assigning the mark; a right of first refusal for the licensee to acquire the mark; a requirement that any assignment be made subject to the licence; and a termination right for the licensee if the mark is assigned to a competitor. From the assignee’s perspective, the assignment agreement should include warranties from the assignor regarding existing licences, including: a complete list of all licences; confirmation that the licences are in good standing; and copies of all licence agreements.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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