Trademark licensing allows companies to use another company’s trademark for their own products. It began in the late 19th century and has become increasingly widespread. Large companies also finance civic arenas and sports stadiums in exchange for trademark licensing, which has been criticized as “brandalism”.
Trademark licensing is a business practice where a company buys the license or the right to use the trademark owned by another company. A doll maker, for example, might acquire the rights to create a doll based on a popular cartoon character. The trademark itself, including rights to the character’s name and likeness, is held by the company offering the license. In fact, that company is free to license other items based on the same character, and sometimes even other dolls if allowed by the trademark license agreement.
A trademark denotes legal ownership of a name, product, or concept, just as a copyright denotes legal ownership of a creative work. The Walt Disney Company, for example, has a trademark with the name “Disney”. Other companies cannot use the name for their own products unless they have entered into a trademark license agreement with the entertainment giant. Disney strictly protects its trademark as it expects to make millions from such licensing. The appearance of a popular trademark can secure the sale of a licensed item, even if the manufacturer has no other connection to the trademark holder.
Trademark licensing began in the late 19th century, when the value of such licensing was first realized by companies looking to increase profitability. Rather than investing the money to create a nationally recognized identity, companies could license the trademarks of other companies that already had that national recognition. Licensing companies, in turn, benefited from increased exposure for their trademarks. Plus, they could grow their product lines without investing in expensive manufacturing concerns like doll-making facilities.
Brand licensing became increasingly widespread in the late 20th and early 21st centuries. Sometimes companies license their popular brands to hundreds or even thousands of other companies, as with the Teenage Mutant Ninja Turtles and The Simpsons cartoons. Charles Schulz’s Peanuts cartoon characters and Marvel and DC Comics superheroes have also been the subject of various trademark licenses, as have many Disney characters.
In the last decade of the 20th century, large companies began to finance civic arenas and sports stadiums in exchange for licensing trademarks in the name of the venue. This increased corporate presence in previously public areas has not been without controversy. This trademark licensing has been termed by some as “brandalism”, a play on the word “vandalism”.
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