The Incentive Structure Of Trademark Licensing—From A View Of Economic Analysis Of Law

One of the most important ways of the exploitation of trademarks is trademark license. It is also a practical way to maximize the economic value of trademarks. Disputes rise frequently in relation to the licensing policy either in theory or practice. Particularly, in a vigorous market, the relationship between two parties to the licensing contract is more and more problematic with the increasing complexity of labor division. However, the current legal system of trademark laws lacks the ability to accommodate emerging disputes. From a perspective of economic analysis of law, this dissertation will attempt to solve the problem by giving insight into the incentive nature of trademarks, precisely, the trademark incentive structure. First, it will discuss two main components of the trademark incentive structure, namely the “revenue sharing policy” and “the obligation policy”. Secondly, these policies would be applied in solving the problems in goodwill division; goodwill transferring, quality controlling, and trademark's value losing. After that, this essay will summary the legislating problems in the existing legal system by a comparative analysis about foreign legislations and rules in practice. Finally, it will provide several suggestions to tackle the problems in question.