Trademark Licence Agreement (Singapore) (Intellectual Property)

A Trademark Licence Agreement (Intellectual Property) in Singapore sets out the scope, fees, and conditions on which the licensor permits the licensee to use the rights.

Section 42 of the Trade Marks Act (Cap. 332) authorises the licensing of registered trademarks and distinguishes between exclusive licences, sole licences, and non-exclusive licences. An exclusive licensee has the right, as against all other persons (including the proprietor), to use the mark in the manner authorised by the licence. A sole licensee has the right, as against all persons other than the proprietor, to use the mark. A non-exclusive licensee shares usage rights with the proprietor and potentially other licensees. Section 44 confers on exclusive licensees the same right to bring infringement proceedings as the proprietor, subject to the conditions in Sections 44(2)-(4).

Section 43(1) of the Trade Marks Act provides that a licence to use a registered trademark is binding on every successor in title to the licensor's interest — meaning that if the licensor assigns the trademark to a third party, the licence survives the assignment and binds the new proprietor. Section 43(2) requires that the licence be in writing signed by or on behalf of the licensor to benefit from this statutory protection.

IPOS encourages (but does not mandate) the recordal of trademark licences on the Trade Marks Register under Rule 53 of the Trade Marks Rules. Recordal serves an evidentiary function and provides notice to third parties. Form TM28 (Application to Register a Licence) is filed through the IP2SG online portal, with a filing fee of S$50 per class. Unrecorded licences remain valid between the parties but may create difficulties for the licensee in enforcing rights against third-party infringers under Section 44(4).

The Franchise and Business Opportunities Disclosure Act does not yet exist in Singapore — Singapore does not have franchise-specific legislation. Franchise arrangements incorporating trademark licences are governed by the Singapore common law of contract (based on English common law, received under the Application of English Law Act 1993) and the Trade Marks Act. The Competition and Consumer Commission of Singapore (CCCS) may scrutinise exclusive trademark licence arrangements under the Competition Act (Cap. 50B) if they restrict competition — particularly vertical agreements containing territorial restrictions or exclusivity obligations. The CCCS Guidelines on the Section 34 Prohibition provide guidance on the assessment of IP licensing agreements.

Singapore's membership in the Madrid Protocol allows proprietors of Singapore trademark registrations to extend protection to over 130 jurisdictions through a single international application filed via IPOS. Licence arrangements covering marks registered under the Madrid Protocol must be recorded with both IPOS and WIPO's International Bureau.

The Income Tax Act (Cap. 134) governs the tax treatment of royalty payments under trademark licences. Royalty income received by a Singapore-resident licensor is taxable as income under Section 10(1)(a) or Section 10(1)(g). For non-resident licensors, withholding tax at 10% (or the applicable Double Taxation Agreement rate) applies to royalty payments under Section 12(7)(b). The Inland Revenue Authority of Singapore (IRAS) administers the withholding tax regime. For intra-group trademark licences between related parties, IRAS requires that royalty rates comply with the arm's length principle under Singapore's transfer pricing rules (Section 34D of the Income Tax Act) and the IRAS Transfer Pricing Guidelines.

The Unfair Contract Terms Act (Cap. 396) (UCTA) may apply to trademark licence agreements that include indemnification, limitation of liability, or exclusion clauses. UCTA Section 3 subjects standard-form contract terms to a reasonableness test where one party deals on the other's written standard terms of business. Licensees negotiating trademark licences should assess whether the licensor's standard terms satisfy the UCTA reasonableness requirements.

A Trademark Licence Agreement is needed whenever the proprietor of a Singapore-registered trademark wishes to permit another party to use the mark commercially while retaining ownership.

Franchise arrangements in Singapore require trademark licences as the core intellectual property component. Franchisors licensing their brand to franchisees must execute written licence agreements specifying the marks, the licensed territory, quality control standards, and royalty structures. The Singapore Business Federation (SBF) and the Franchising and Licensing Association Singapore (FLA Singapore) recommend that franchise agreements include detailed trademark licence provisions compliant with the Trade Marks Act (Cap. 332).

Distribution and reseller arrangements where the distributor uses the brand owner's trademarks in marketing, packaging, and point-of-sale materials require formal trademark licences. Distributors who use a trademark without authorisation — even if they are authorised resellers of the branded goods — risk infringement claims under Section 27 of the Trade Marks Act.

Joint ventures and strategic partnerships where one party contributes trademark rights require licence agreements defining each party's usage rights, territory, and quality obligations. ACRA-registered joint venture companies should hold licences (rather than relying on informal understandings) to protect their position if the venture dissolves.

Manufacturing and OEM arrangements where the manufacturer applies the brand owner's trademark to goods require written licences. Quality control provisions are essential — Section 42(2) of the Trade Marks Act contemplates the licensor's right to control the quality of goods bearing the licensed mark, and failure to exercise quality control can weaken the mark's distinctiveness.

Merchandising and co-branding arrangements in Singapore's retail sector — particularly in Orchard Road, Jewel Changi Airport, and VivoCity — involve trademark licences allowing retailers, event organisers, or co-brand partners to use marks on promotional materials, products, and signage.

Technology and digital platform licences where a software or app developer uses another company's trademarks within the application interface, marketing materials, or app store listings require trademark licences separate from any underlying software or technology licence.

Sports and entertainment licensing where sports teams, entertainment brands, and media companies licence their trademarks for merchandise, apparel, and branded experiences in Singapore's retail and entertainment sectors — including Marina Bay Sands, Sentosa, and the Singapore Sports Hub — requires formal trademark licence agreements with detailed quality control and royalty provisions.

Healthcare and pharmaceutical branding where pharmaceutical companies, medical device manufacturers, and healthcare providers licence trademarks for branded products and services in Singapore's healthcare sector — regulated by the Health Sciences Authority (HSA) and the Ministry of Health (MOH) — requires licences addressing regulatory compliance, product quality, and adverse event reporting obligations.

A Singapore Trademark Licence Agreement under the Trade Marks Act (Cap. 332) must incorporate the following elements. The forms-legal.com Trademark Licence Agreement template covers all IPOS recordal requirements and standard commercial terms.

Parties must be identified by full legal names, addresses, and (for Singapore entities) ACRA UEN numbers. The licensor must be the registered proprietor or an authorised sub-licensor. The licensee must be clearly identified, and any sub-licensing rights must be expressly stated.

Trademark identification must specify each licensed mark by: IPOS registration number (or application number); the mark itself (word mark, device, or composite); the Nice Classification classes; and the specification of goods and/or services for which the licence is granted. For Madrid Protocol international registrations, the WIPO international registration number must be included.

Licence type must state whether the licence is exclusive (licensee has sole right to use, excluding the licensor), sole (licensee has sole right but licensor retains usage rights), or non-exclusive (licensor may grant licences to others). Section 42 of the Trade Marks Act distinguishes these categories, and the choice affects the licensee's standing to sue for infringement under Section 44.

Territory must define the geographic scope of the licence — whether limited to Singapore, extended to ASEAN markets, or worldwide. Territorial restrictions must comply with the CCCS Guidelines on vertical agreements under the Competition Act (Cap. 50B).

Duration and renewal must specify the initial term, renewal options, and conditions for renewal. The licence should address the relationship between the licence term and the trademark registration term (10 years from registration, renewable under Section 18 of the Trade Marks Act).

Royalties and payment terms must state the financial consideration — whether a lump-sum payment, ongoing royalties (typically calculated as a percentage of net sales or a fixed per-unit amount), minimum guaranteed royalties, or a combination. Payment currency (typically SGD), payment frequency, invoicing procedures, audit rights, and interest on late payments must be addressed. GST at 9% under the GST Act (Cap. 117A) applies to royalty payments if the licensor is GST-registered.

Quality control provisions are critical to maintaining the mark's distinctiveness and the licensor's rights. The licensor should specify quality standards, inspection rights, approved suppliers, and the right to require samples. Failure to exercise quality control may lead to a finding that the mark has lost its distinctive character, potentially exposing it to revocation proceedings under Section 22(1)(b) of the Trade Marks Act.

IPOS recordal clause should address the filing of Form TM28 to record the licence on the Trade Marks Register, the allocation of filing fees between the parties, and the cooperation obligations of both parties in maintaining the recordal.

Termination provisions must specify grounds for termination (material breach, insolvency, failure to meet minimum performance thresholds), notice periods, and post-termination obligations (return of materials bearing the mark, cessation of use, destruction of stock, and de-branding requirements).

Insurance requirements should specify the licensee's obligation to maintain product liability insurance, public liability insurance, and professional indemnity insurance (where applicable) at specified minimum coverage levels. The licensor should be named as an additional insured on the licensee's insurance policies.

Reporting and audit rights should require the licensee to provide periodic sales reports (monthly, quarterly, or annually) supporting royalty calculations, and grant the licensor the right to audit the licensee's books and records (typically once per year with 30 days' prior written notice). Audit costs should be borne by the licensor unless the audit reveals a discrepancy exceeding a specified threshold (typically 5%), in which case the licensee bears the audit costs.

Non-compete and non-solicitation clauses may restrict the licensee from dealing in competing products or services during the licence term. Non-compete restrictions must comply with the Competition Act (Cap. 50B) and the CCCS Guidelines, and must not exceed what is reasonably necessary to protect the licensor's legitimate business interests.