1205008 Informal Interpretation

Michael Verne

– Agree. K Walsh concurs.





Tuesday, May 15, 2012 11:41 AM


Verne, B. Michael


Trademark License Question


Iwould appreciate your guidance on the following questions. Please let me knowif you need any additional information. As always, thanks very much for yourassistance.

Licensorcurrently markets L-Brand widgets, which are sold directly to various retailersthrough an existing licensee for the L-Brand, and also through Licensor's ownand franchised L-Brand widget stores and L-Brand widget kiosks located atvenues like airports. Licensor proposes to grant to a new Licensee an exclusivetrademark license to use the L-Brand name for the manufacture, distribution,marketing and sale of L-Brand widgets for all classes/channels of trade,excluding the Licensor-owned and franchised widget stores and kiosks. Licenseewould have an exclusive right to manufacture the L-Brand widgets and supplythem to the Licensor's stores and franchisees.

Based on InformalInterpretation #0812011, we would conclude that the proposed trademark license,is not an asset acquisition for purposes of the HSR Act, since it is exclusiveonly within a certain field of use and expressly provides that Licensor and itsfranchisees will continue to own and use the trademark for purposes outside thescope of the license. In other words, it does not "transfer all rightsassociated with the trademark to the licensee, even against the licensor, as ifthe actual trademark is being acquired."

1. Please let us know if you agree, or if you need anyadditional information.

2. Please also let us know if your answer would change if,in addition to the license as described above, Licensee were to have a right offirst refusal to expand its license to cover any non-widget products thatLicensor seeks to out-license during the term of the license. We believe such aright of first refusal would not change the conclusion because the right offirst refusal would not apply to any products that Licensor markets on its ownor to products that currently are subject to out-licenses to other licensees.As in tile original fact pattern above, Licensor and its current licenseeswould continue to own and use the trademark outside the scope of the Licensee'slicense, as would any new licensees that received licenses covering productsfor which Licensee chooses not exercise its right of first refusal.

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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