Trademark licensing in all its forms — promotional, collateral and classical — has become an increasingly large and dynamic part of the global economy. It has been reported that in the United States alone manufacturers paid nearly $6 billion in licensing royalties in 2003. Although nearly one third of all global commerce in trademark licensing is generated outside the United States, many of those licensed goods are eventually floated into the U.S. stream of commerce.
While the majority of trademark licensing agreements involve “mere” or “pure” licensing, under which the trademark owner does little more than give another (usually a manufacturer) permission to use its trademark, in other instances the trademark owner will involve itself to some degree in the design and manufacture of the licensed product. In both instances, trademark licensors who do not actually manufacture the licensed product need to consider the various theories of products liability that U.S. plaintiffs might use to hold them liable when claimed defects in licensed goods give rise to personal injury litigation.
