Trademark Licensing and Assignment in Kenya: Registration and Enforcement Rights

Trademark licensing and assignment are two different ways a mark can change hands in Kenya, and mixing them up causes real problems. An assignment transfers ownership of the mark to a new proprietor. A licence leaves ownership where it is and permits someone else to use the mark, usually for royalties and on conditions the owner sets. The Trade Marks Act treats them as separate transactions with separate registration steps, and failing to register either one properly can leave a business unable to prove rights it believed it had.

Trademark licensing and assignment: assigning a registered mark

Section 27 of the Trade Marks Act gives the person entered in the register as proprietor the power to assign the mark and to give a valid receipt for the consideration. Section 25(1) allows a registered mark to be assigned and transmitted either with or without the goodwill of the business, and section 25(2) allows an assignment for all, or only some, of the goods or services for which it is registered.

The Act limits assignments that would split confusingly similar marks between different owners. Under section 25(4), a mark cannot be assigned where the result would be exclusive rights in more than one person to use identical or nearly resembling marks for the same goods or services, if that use would be likely to deceive or cause confusion. A proprietor who is unsure can submit a statement of case to the Registrar, who may issue a certificate on whether the proposed assignment would be invalid (section 25(5)).

Assigning a mark without the goodwill of a business that currently uses it carries an extra step. Under section 25(7), the assignment does not take effect until the assignee has applied to the Registrar, within six months of the assignment or any extended period the Registrar allows, for directions on advertising it, and has advertised it as directed. Build this timing into the deal.

Registering the assignment

Registration is not optional. Section 28(1) requires anyone who becomes entitled to a registered mark by assignment or transmission to apply to the Registrar to register their title. Section 28(3) states the consequence: a document that has not been entered in the register cannot be admitted in evidence in any court to prove title to the mark, except as between the parties to the document, unless the court otherwise directs. A buyer who never registered therefore has a right that is real between the parties but hard to prove against an infringer. Registrar decisions under section 28 can be appealed to the court.

Licensing a registered trademark

Licensing works through section 31. A person other than the proprietor may be registered as a licensee for all or some of the goods or services, with or without conditions or restrictions. Use that complies with the registration is “permitted use”. Section 31(2) deems permitted use to be use by the proprietor, including for the non-use provisions in section 29, so a properly registered licence helps protect the mark against removal for non-use.

The proprietor and the proposed licensee apply together in writing, with a statutory declaration from the proprietor giving particulars of the relationship, including the degree of control the proprietor will have over the permitted use, the goods or services, any conditions or restrictions, and whether the permitted use is for a period (section 31(4)). The Registrar must be satisfied that the use would not be contrary to the public interest, and must refuse an application if the grant would tend to facilitate trafficking in a trade mark (section 31(5) and (6)). The Registrar can also keep the information given in the application from rivals in trade if the applicant asks (section 31(7)).

The Act’s emphasis on control tells you how to draft. A licence should state quality standards, the proprietor’s right to inspect goods and premises, and the consequences of failing to meet the standards. The Registrar can cancel a licensee’s registration where the licensee has used the mark outside the permitted use, or in a way likely to cause deception or confusion (section 31(8)).

A registered licensee can enforce the mark

Under section 31(3), and subject to any agreement between the parties, a licensee may call on the proprietor to sue for infringement. If the proprietor refuses or neglects to do so within two months, the licensee may bring the infringement proceedings in its own name, making the proprietor a defendant. The proprietor is not liable for costs unless it enters an appearance and takes part. The provision is framed around a licensee in the Act’s sense, meaning one registered under section 31, so an informal and unregistered licence leaves the licensee depending on the proprietor’s willingness to act. For the infringement standard the licensee would have to meet, see our guide to trademark infringement in Kenya.

Section 31(12) provides that nothing in the section gives a licensee an assignable or transmissible right to use the mark. A licence cannot be sub-licensed or passed to a successor business on the licensee’s say-so. Plan for a fresh agreement and fresh registration if the licensee is restructured or sold.

Drafting points that matter in practice

In trademark licensing and assignment alike, the statutory steps are only part of the deal. Beyond them, a licence should deal with commercial points that often cause disputes later:

• territory and exclusivity, including whether the proprietor may still use the mark or license others;
• royalties: gross or net sales, currency and reporting schedule;
• what happens to branded stock after termination, including any sell-off period;
• termination for breach and, separately, on a change of control of the licensee;
• cancellation of the licensee’s registration at the Registrar when the licence ends, which either party can request under section 31(8).

Due diligence in trademark licensing and assignment

A buyer should check that the mark is validly registered, free of pending challenges, and that the register shows no conflicting entries. Check for existing registered licensees and any limitations entered on the register, because the proprietor’s rights are subject to conditions and limitations on the register (section 7(2)). If the mark is bundled with know-how, formulas or customer data, protect those separately in the contract. For the bigger picture of Kenya’s protections, see our guide to IP protection tools for founders and our intellectual property practice.

Frequently asked questions

This article is general information on Kenyan law as at its publication date, not legal advice. Reading it does not create an advocate and client relationship.