# TMEP § 1201.03(e): License and Franchise Situations

> Federal · Agency guidance · In force

URL: https://www.frixlaw.com/law-library/statutes/TMEP_S1201.03(e)

## Section

- **Citation:** TMEP § 1201.03(e)
- **Heading:** License and Franchise Situations
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** USPTO TMEP / Chapter 1200 - Substantive Examination of Applications / TMEP § 1201.03(e)

## Text

The USPTO accepts applications by parties who claim
to be owners of marks through use by controlled licensees, pursuant to a
contract or agreement.
Pneutek, Inc. v. Scherr,
211 USPQ 824,
833 (TTAB 1981).
A controlled licensing agreement may be recognized
whether oral or in writing.
In re Raven Marine,
Inc.
, 217 USPQ 68, 69
(TTAB 1983) (citing
Basic Inc. v. Rex
, 167 USPQ 696, 697
(TTAB 1970));
see
Sock It To Me, Inc. v. Aiping Fan
, 2020 USPQ2d 10611, at *3-4
(TTAB 2020) (citing
Woodstock’s Enters. Inc. (Cal.) v. Woodstock’s
Enters. Inc. (Or.)
, 43 USPQ2d 1440, 1447 (TTAB 1997);
Univ. Book Store v. Univ. of Wis. Bd. of Regents
, 33
USPQ2d 1385, 1396 (TTAB 1994)) ("Even if there is no formal written agreement, a
license can be implied.").
If the application indicates that use of the mark
is pursuant to a license or franchise agreement, and the record contains nothing
that contradicts the assertion of ownership by the applicant (i.e., the licensor
or franchisor), the examining attorney will not inquire about the relationship
between the applicant and the related company (i.e., the licensee or
franchisee).
Ownership rights in a trademark or service mark may
be acquired and maintained through the use of the mark by a controlled licensee
even when the only use of the mark has been made, and is being made, by the
licensee.
Turner v. HMH Publ'g Co.,
380 F.2d 224, 229, 154
USPQ 330, 334 (5th Cir. 1967),
cert. denied
, 389 U.S. 1006,
156 USPQ 720 (1967);
Cent. Fid. Banks, Inc. v. First Bankers Corp. of
Fla.
, 225 USPQ 438, 440
(TTAB 1984) (holding that use of the mark by petitioner’s affiliated banks
considered to inure to the benefit of petitioner bank holding company, even
though the bank holding company could not legally render banking services and,
thus, could not use the mark). However, a mere licensee cannot rely on use of
the mark by the licensor, whether through the license or otherwise, to establish
priority.
Moreno v. Pro Boxing Supplies, Inc.
, 124 USPQ2d
1028, 1036 (TTAB 2017)
anks
considered to inure to the benefit of petitioner bank holding company, even
though the bank holding company could not legally render banking services and,
thus, could not use the mark). However, a mere licensee cannot rely on use of
the mark by the licensor, whether through the license or otherwise, to establish
priority.
Moreno v. Pro Boxing Supplies, Inc.
, 124 USPQ2d
1028, 1036 (TTAB 2017).
Joint applicants enjoy rights of ownership to the
same extent as any other "person" who has a proprietary interest in a mark.
Therefore, joint applicants may license others to use a mark and, by exercising
sufficient control and supervision of the nature and quality of the goods or
services to which the mark is applied, the joint applicants/licensors may claim
the benefits of the use by the related company/licensee.
In re Diamond Walnut Growers,
Inc. & Sunsweet Growers Inc.
, 204 USPQ
507, 510 (TTAB 1979)
.
Stores that are operating under franchise
agreements from another party are considered "related companies" of that party,
and use of the mark by the franchisee/store inures to the benefit of the
franchisor.
Mr. Rooter Corp. v. Morris
, 188 USPQ 392, 394
(E.D. La. 1975);
Southland Corp. v. Schubert
, 297 F. Supp.
477, 160 USPQ 375, 381 (C.D. Cal. 1968).
In all franchise and license situations, the key to
ownership is the nature and extent of the control by the applicant over the
nature and quality of the goods or services with which the mark is used.
See
Sock It To Me
, 2020 USPQ2d 10611, at *4 (quoting
In
re Jos. Bancroft & Sons
, 120 USPQ 329, 330-31 (TTAB 1961)).
Control over all of the related company’s affairs is not required.
See
Sock It To Me
, 2020 USPQ2d 10611, at *4 (citing 3 J. Thomas
McCarthy, McCarthy on Trademarks & Unfair Competition §18:58 (5th ed. Nov.
2019 update)). However, a trademark owner who fails to exercise sufficient
control over licensees or franchisees may be found to have abandoned its rights
in the mark.
See
Hurricane Fence Co. v. A-1 Hurricane Fence Co.
, 468 F. Supp
’s affairs is not required.
See
Sock It To Me
, 2020 USPQ2d 10611, at *4 (citing 3 J. Thomas
McCarthy, McCarthy on Trademarks & Unfair Competition §18:58 (5th ed. Nov.
2019 update)). However, a trademark owner who fails to exercise sufficient
control over licensees or franchisees may be found to have abandoned its rights
in the mark.
See
Hurricane Fence Co. v. A-1 Hurricane Fence Co.
, 468 F. Supp.
975, 986; 208 USPQ 314, 325 (S.D. Ala. 1979).
In general, where the application states that a
mark is used by a licensee or franchisee, the USPTO does not require an
explanation of how the applicant controls the use.

## Nearby sections

- [TMEP § 1201 Ownership of Mark](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.md)
- [TMEP § 1201.01 Claim of Ownership May Be Based on Use By Related Companies](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.01.md)
- [TMEP § 1201.02(a) Identifying the Applicant Properly](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.02(a).md)
- [TMEP § 1201.02(c) Correcting Errors in How the Applicant Is Identified](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.02(c).md)
- [TMEP § 1201.02(d) Operating Divisions](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.02(d).md)
- [TMEP § 1201.02(e) Changes in Ownership After Application Is Filed](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.02(e).md)
- [TMEP § 1201.03(a) No Explanation of Use of Mark by Related Companies or Applicant’s Control Over Use of Mark by Related Companies Required](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.03(a).md)
- [TMEP § 1201.03(b) Wholly Owned Related Companies](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.03(b).md)
- [TMEP § 1201.03(c) Common Stockholders, Directors, or Officers](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.03(c).md)
- [TMEP § 1201.03(e) License and Franchise Situations](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.03(e).md)
- [TMEP § 1201.04 Inquiry Regarding Parties Named on Specimens or Elsewhere in Record](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.04.md)
- [TMEP § 1201.05 Acceptable Claim of Ownership Based on Applicant’s Own Use](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.05.md)
- [TMEP § 1201.06(a) Applicant Is Merely Distributor or Importer](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.06(a).md)
- [TMEP § 1201.06(b) Goods Manufactured in a Country Other than Where Applicant Is Located](https://www.frixlaw.com/law-library/statutes/TMEP_S1201.06(b).md)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/TMEP_S1201.03(e). Check the current official text before relying on it. Not legal advice.