Trademark Tips: The Pitfalls of Creating an "Accidental Franchise" in Trademark Licensing Agreements
While not having enough control over a licensee can be result in an unwanted “Naked License," having too much control over a licensee can pose its own issues. Bill Samuels, Partner and Chair of the Copyright and Trademark Law Group at Scarinci and Hollenbeck, discusses how trademark owners can be at risk of "accidental franchise" (where you're deemed to be a de facto franchise by state or federal regulators) if they maintain too much control over their licensees. This can lead to potential penalties and fines for trademark owners and empower licensees with certain rights under law.
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