Trademark Licence Agreement (Malaysia)
TRADEMARK LICENCE AGREEMENT
This Trademark Licence Agreement is made on [Agreement Date]
BETWEEN
[Licensor Name] (SSM No. [Licensor Registration]) ('Licensor')
AND
[Licensee Name] (SSM No. [Licensee Registration]) ('Licensee')
1. GRANT OF LICENCE
The Licensor grants to the Licensee a [Licence Type] licence to use the following trademark(s) ('Licensed Mark'): [Trademark Description]
Licensed goods / services: [Licensed Goods]
Licensed territory: [Licensed Territory]
Licence term: [Licence Term]
Sub-licensing permitted: [Sublicence Permitted]. The Licensee must not sub-licence the Licensed Mark without the Licensor's prior written consent unless sub-licensing is expressly permitted above.
2. ROYALTIES AND PAYMENT
In consideration of the licence granted under this agreement, the Licensee shall pay the Licensor the following royalty or licence fee: [Royalty Structure]
All payments shall be made in Malaysian Ringgit (RM) unless otherwise agreed in writing. Late payment accrues interest at 1.5% per month from the due date.
3. QUALITY CONTROL
The Licensee acknowledges that the Licensed Mark is a valuable asset of the Licensor. The Licensee shall use the Licensed Mark only in connection with goods and services that meet the quality standards required by the Licensor. The following quality control measures apply: [Quality Control Measures]
Failure to maintain required quality standards is a material breach entitling the Licensor to terminate this agreement on written notice.
4. MyIPO RECORDAL
Record at MyIPO: [MyIPO Recordal]. If agreed, the parties shall cooperate to file the necessary application at the Trade Marks Registry (MyIPO) under Section 49 of the Trade Marks Act 2019 (Act 815) to record this licence against the Licensed Mark's registration(s). The cost of recordal is borne by the Licensee.
5. TERMINATION
The Licensor may terminate this agreement immediately on written notice if the Licensee: (a) fails to pay any royalty when due and fails to remedy the default within 14 days of written notice; (b) commits a material breach of this agreement and fails to remedy the breach within 30 days of written notice; (c) becomes insolvent, is wound up, or a receiver is appointed over its assets; or (d) challenges the validity or ownership of the Licensed Mark.
On termination, the Licensee shall immediately cease all use of the Licensed Mark and destroy or return all branded materials and stock bearing the Licensed Mark, unless otherwise agreed.
6. GOVERNING LAW
This agreement is governed by the laws of Malaysia. Any dispute arising out of or in connection with this agreement shall be referred to the courts of Malaysia, or if agreed by the parties, to arbitration under the rules of the Asian International Arbitration Centre (AIAC), Kuala Lumpur.
Licensor
________________
Signature
Licensee
________________
Signature
What Is a Trademark Licence Agreement (Malaysia)?
A Trademark Licence Agreement in Malaysia sets out the scope, fees, and conditions on which the licensor permits the licensee to use the rights.
Under Section 48 of the Trade Marks Act 2019, a licence to use a registered trademark must be in writing and signed by or on behalf of the grantor to be effective. A licensee under a trademark licence is referred to as a 'registered user' in older Malaysian trademark practice, but the Trade Marks Act 2019 uses the term 'licensee'. Under Section 49 of the Trade Marks Act 2019, a trademark licence may be recorded at the Trade Marks Registry of the Intellectual Property Corporation of Malaysia (MyIPO). Recordal at MyIPO protects the licensee's rights against third parties and confirms the licence appears on the public register.
Trademark licences in Malaysia may be exclusive or non-exclusive. An exclusive licence grants the licensee the sole right to use the trademark in the licensed territory, excluding all others including the licensor itself. A non-exclusive licence allows multiple licensees to use the trademark simultaneously. Under Section 50 of the Trade Marks Act 2019, an exclusive licensee has the right to bring infringement proceedings in their own name if the licensor fails to act against infringers after being put on notice.
Quality control is a critical element of Malaysian trademark licensing. A trademark functions as a badge of origin — it tells consumers that goods or services bearing the mark come from a consistent source meeting consistent quality standards. If a licensor fails to exercise quality control over the licensee's use of the trademark, the trademark may become vulnerable to cancellation for non-use or deceptive use. The Trade Marks Act 2019 requires that a licence include adequate quality control provisions to maintain the integrity of the trademark as a badge of origin.
The legal framework governing the Trademark Licence Agreement (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Trademark Licence Agreement (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2016 (Act 777) sets the foundational requirements.
When Do You Need a Trademark Licence Agreement (Malaysia)?
A Trademark Licence Agreement is needed whenever a trademark owner grants another party the right to use the trademark in connection with goods or services in Malaysia.
A Trademark Licence Agreement is required for franchise arrangements, where the franchisor's brand, logo, and trading style are licensed to franchisees operating under the Franchise Act 1998. Malaysian franchise agreements must comply with the Franchise Act 1998 and must be registered with the Registrar of Franchises — and the underlying trademark licence is a core component of the franchise package.
A Trademark Licence Agreement is needed for co-branding arrangements where two companies collaborate to market products or services bearing both their respective trademarks, requiring each party to grant the other a limited licence to use their mark in the co-branded context.
A Trademark Licence Agreement is required for distribution agreements where a foreign brand owner appoints a Malaysian distributor to sell branded products in Malaysia. The distributor typically needs a licence to use the trademark in local marketing materials, signage, and product labelling.
A Trademark Licence Agreement is needed for merchandising arrangements — granting licensees the right to produce and sell merchandise bearing a brand, celebrity name, sporting club badge, or entertainment property trademark.
A Trademark Licence Agreement is required for intra-group licensing between related companies, where the IP-holding entity within a corporate group (often a holding company or IP subsidiary) licenses group trademarks to operating subsidiaries in exchange for royalties, as part of the group's IP management and transfer pricing structure.
Parties in Malaysia should prepare a Trademark Licence Agreement (Malaysia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Trademark Licence Agreement (Malaysia)
A thorough Trademark Licence Agreement for Malaysian transactions must include the following essential elements.
Identification of the Licensed Trademark: The precise description of each trademark being licensed, including the registration number at MyIPO, the trademark name or logo, the goods and services class (Nice Classification), and the jurisdiction of registration. For unregistered trademarks, describe the mark and the goods/services in connection with which it is used.
Scope of the Licence — Exclusive or Non-Exclusive: Whether the licence is exclusive (sole licensee in the territory) or non-exclusive (licensor may grant licences to others). For exclusive licences, specify whether the licensor is also excluded from using the mark in the territory.
Licensed Territory: The geographic scope of the licence — Malaysia only, Southeast Asia, or worldwide. A trademark licence without a defined territory is ambiguous and may create disputes.
Licensed Goods and Services: The specific goods or services in connection with which the licensee is authorised to use the trademark. The licence should be limited to the registered classes of goods or services, or a subset.
Term and Renewal: The duration of the licence — fixed term (e.g. two years, five years) or perpetual. Whether the licence is renewable and on what terms.
Royalties and Financial Terms: The royalty payable by the licensee — whether a fixed annual fee, a percentage of net sales, a per-unit royalty, or a combination — and payment terms including invoicing, currency (Malaysian Ringgit, RM), and late payment provisions.
Quality Control: The licensor's right to review and approve the licensee's use of the trademark, inspect products or premises, and require the licensee to maintain specified quality standards. Quality control is essential to preserve the validity of the trademark as a badge of origin.
MyIPO Recordal: Whether the licence will be recorded at the MyIPO Trade Marks Registry under Section 49 of the Trade Marks Act 2019, and which party bears the cost of recordal.
Termination Rights: Circumstances in which the licensor may terminate the licence — including breach by the licensee, insolvency, change of control, or non-payment of royalties — and post-termination obligations to cease use of the trademark and return or destroy branded materials.
Additional compliance elements for a Trademark Licence Agreement (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Trademark Licence Agreement (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/business/intellectual-property/trademark-licence-agreement-malaysia
"Trademark Licence Agreement (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/business/intellectual-property/trademark-licence-agreement-malaysia.
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author = {{Forms Legal}},
title = {Trademark Licence Agreement (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/business/intellectual-property/trademark-licence-agreement-malaysia}},
note = {Free legal document template. Based on Companies Act 2016 (Act 777)}
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Frequently Asked Questions
Under Section 49 of the Trade Marks Act 2019 (Act 815), a trademark licence may be recorded at the Trade Marks Registry of the Intellectual Property Corporation of Malaysia (MyIPO). Recordal is not mandatory for the licence to be valid between the parties — the licence is valid from execution provided it is in writing and signed. However, recordal at MyIPO is strongly advisable because it: (1) gives constructive notice to third parties of the licensee's rights, preventing third parties from acquiring conflicting rights without knowledge of the existing licence; (2) enables the recorded licensee to enforce their rights more effectively in infringement proceedings; and (3) for exclusive licensees, allows the licensee to bring infringement proceedings in their own name under Section 50 of the Trade Marks Act 2019 if the licensor fails to act after being given notice. The cost of recordal at MyIPO is modest and it is standard practice for significant trademark licences — including franchise agreements and major distribution arrangements — to be recorded.
The Trade Marks Act 2019 (Act 815) requires that trademark licences include adequate provisions for the licensor to maintain quality control over the licensee's use of the trademark. This requirement reflects the fundamental principle that a trademark functions as a badge of origin — guaranteeing to consumers that goods or services bearing the mark meet consistent quality standards from a consistent source. Under Malaysian trademark law, a 'naked licence' — a trademark licence with no quality control provisions — may expose the trademark to cancellation on the grounds that the trademark no longer distinguishes the licensor's goods or services from those of third parties, or that the mark has become misleading to consumers. Quality control provisions typically include: the right of the licensor to approve product specifications, marketing materials, and labelling before use; the right to inspect the licensee's premises and production processes; the obligation of the licensee to maintain specified quality standards and provide samples for approval; and the right to terminate the licence for failure to maintain required standards. The level of quality control appropriate for a specific trademark licence depends on the nature of the trademark, the goods or services, and the commercial relationship between the parties.
The Franchise Act 1998 (Act 590) regulates franchise arrangements in Malaysia, and a trademark licence is an essential component of any franchise. Under Section 6 of the Franchise Act 1998, a franchise agreement must be in writing and registered with the Registrar of Franchises at the Ministry of Domestic Trade and Cost of Living before the franchise can be offered or sold in Malaysia. The franchise agreement must include a grant of a licence to use the franchisor's trademark, trade name, and system of business. The Franchise Act 1998 requirements for trademark licensing are broadly consistent with the Trade Marks Act 2019 requirements — both require a written agreement and quality control provisions. However, a franchise trademark licence must also comply with the specific mandatory provisions of the Franchise Act 1998, including the right of the franchisee to a minimum cooling-off period, disclosure of the franchise package, and the obligation to register the franchise agreement before entering the market. Failure to register a franchise agreement with the Registrar of Franchises is a criminal offence under Section 54 of the Franchise Act 1998.
Royalty payments under a trademark licence from a Malaysian company to a non-resident licensor are subject to withholding tax under Section 109 of the Income Tax Act 1967 (Act 53). The standard withholding tax rate on royalties paid to non-residents is 10% of the gross royalty amount. The Malaysian company (the licensee or payer) is responsible for deducting the withholding tax and remitting it to the Inland Revenue Board of Malaysia (Lembaga Hasil Dalam Negeri, LHDN) within one month of the royalty payment being due. However, if there is a Double Taxation Agreement (DTA) between Malaysia and the country of residence of the non-resident licensor, the DTA may provide for a reduced withholding tax rate — for example, many of Malaysia's DTAs reduce the withholding tax on royalties to 0% to 8% depending on the DTA. The DTA reduced rate is not automatic — the non-resident licensor must apply for the reduced rate by filing a Claim for Relief Under the Avoidance of Double Taxation Agreement with LHDN before payment.
Under Malaysian trademark law and general contract law, a licensee cannot grant a sub-licence to a third party unless the trademark licence agreement expressly permits sub-licensing. A trademark licence that is silent on sub-licensing is generally interpreted as prohibiting sub-licences without the licensor's consent. If sub-licensing is permitted, the licence agreement should specify: whether sub-licences require the licensor's prior written consent; whether the sub-licensee is bound by the same quality control provisions as the licensee; who bears responsibility for the sub-licensee's compliance with the licence terms; and what happens to sub-licences if the main licence is terminated. From the licensor's perspective, permitting sub-licensing without adequate controls over sub-licensees poses a significant risk to the trademark's integrity and value — if sub-licensees produce substandard goods or services under the trademark, the licensor may have limited recourse, and the trademark's reputation may be damaged. It is standard practice in Malaysian trademark licences to require prior written approval for each sub-licence and to require the sub-licensee to enter into a direct agreement with the licensor confirming compliance with the quality control provisions.
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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