1. INTRODUCTION

A business may spend years and sometimes decades building a trusted brand. Customers instantly recognise its products, distributors associate it with quality and competitors strive to imitate its reputation. Notwithstanding the immense commercial value attached to a trademark, many businesses unknowingly expose their most valuable intellectual property to legal risks by assuming that signing a licensing or assignment agreement is sufficient to protect their rights.

Under Tanzanian law, trademark ownership, assignment and licensing are governed by statutory requirements that extend beyond contractual arrangements between parties. While a trademark may be licensed or assigned like any other commercial asset, the law requires compliance with prescribed registration procedures before such transactions become fully effective and enforceable against third parties. Businesses that overlook these requirements may find themselves unable to enforce their rights or, worse, defending claims of infringement despite having executed what appears to be a valid agreement.

As intellectual property continues to assume greater commercial significance in an increasingly competitive marketplace, understanding the legal framework governing trademark transactions has never been more important.

This article examines the law relating to trademark licensing and assignment in Tanzania, highlights common compliance pitfalls and discusses the practical implications for businesses seeking to maximize and protect the value of their brands.

2. UNDERSTANDING TRADEMARK RIGHTS IN TANZANIA

Section 2 of the Trade and Service Marks Act, Cap. 326 R.E 2023 (“the Act”) defines a trademark as any visible sign used or proposed to be used in relation to goods or services for the purpose of distinguishing the goods or services of one person from those of another. Visible signs include words, names, brands, devices, letters, numbers, symbols, labels, emblems and any combination thereof.

Unlike many business assets, trademark rights in Tanzania are acquired through registration. Registration grants the proprietor the exclusive right to use the trademark in relation to the goods or services for which it is registered, including the right to manufacture, market, import and sell products bearing the mark. These exclusive rights form the legal foundation upon which businesses protect their brands and prevent competitors from exploiting their reputation.

The exclusivity granted by registration also enhances consumer confidence by reducing confusion in the marketplace while encouraging businesses to invest in quality improvement, innovation and brand development.

3. UNDERSTANDING TRADEMARK LICENSING IN TANZANIA

Not every business intends to permanently part with its trademark. In many instances, the greater commercial value lies in allowing another party to use the trademark while the proprietor retains its ownership. This is the essence of trademark licensing, a commercial arrangement that has become increasingly common as businesses expand into new markets through franchising, distributorships, manufacturing agreements and strategic collaborations.

Under trademark licensing the registered proprietor grants another person permission to use the mark under agreed-upon terms and conditions. Ownership remains vested in the registered proprietor, who continues to control the reputation and goodwill associated with the brand.

The Act recognizes two principal forms of licensing: exclusive licences and non-exclusive licences. Under an exclusive licence, the licensee enjoys the sole right to use the trademark within the agreed scope, effectively excluding even the proprietor from using the mark and granting similar rights to others. Conversely, a non-exclusive licence permits the proprietor to authorize multiple licensees to use the same trademark simultaneously, subject to the terms of each licensing arrangement.

From a commercial perspective, licensing offers significant advantages. This enables businesses to penetrate new markets, increase brand visibility and generate additional revenue without relinquishing ownership of their intellectual property. Equally, it allows emerging businesses to benefit from established brands while operating within a legally authorized framework. However, these commercial benefits can only be fully realized if the licensing arrangement complies with the legal requirements prescribed by the Act.

4. THE REGISTRATION PROCESS FOR TRADEMARK LICENSING IN TANZANIA

In Tanzania, trademark licensing is subject to a statutory registration process prescribed by the Act. To ensure that a trademark licence is legally recognized and enforceable, parties must comply with several mandatory requirements. The registration process is undertaken through the following key steps:

Step One: Negotiate and Execute the Trademark Licensing Agreement

The process begins with the registered proprietor and the intended licensee negotiating and executing a Trademark Licensing Agreement. The agreement should clearly define the rights being granted, including the scope of the licence, the goods or services covered, the duration of the licence, territorial limitations, quality control obligations and the respective rights and obligations of each party.

Although this agreement establishes a contractual relationship between the parties, it does not, on its own, confer statutory rights to the licensee. At this stage, the licence remains a private contractual arrangement and has not yet acquired the legal recognition contemplated under the Act.

Step Two: Apply for Registration of the Licensee as a Registered User

Following the execution of the licensing agreement, the registered proprietor and the proposed licensee must jointly submit an application to the Registrar of Trademarks seeking the registration of the licensee as a Registered User of the trademark.

This requirement is prescribed under Section 43 of the Act and represents one of the most important compliance obligations in the licensing process. This reflects the legislative intention that the use of a registered trademark by persons other than its proprietor should remain subject to regulatory oversight.

The application for registration must be accompanied by supporting documentation as prescribed under the Act. Depending on the relationship between the parties, applicants must either provide evidence demonstrating that the proposed registered user is wholly controlled by the registered proprietor or submit a copy of the executed Trademark Licensing Agreement.

In addition, the application must contain detailed information to enable the Registrar to assess the proposed arrangement. This includes:

• the identity of the registered trademark
• the name and address of the registered proprietor
• the name and address of the proposed registered user
• the goods or services in respect of which the licence is granted
• any restrictions governing the proposed use of the trademark
• the period during which the permitted use is intended to subsist.

These disclosure requirements enable the Registrar to determine whether the proposed use is appropriate and consistent with the objectives of trademark protection.

Step Three: Review and Approval by the Registrar

Once the application is submitted, the Registrar undertakes a substantive review of the proposed licensing arrangement. The Registrar must be satisfied that all statutory requirements have been complied with and that the circumstances surrounding the proposed use of the trademark are appropriate.

Only upon reaching this satisfaction will the Registrar proceed to register the proposed licensee as a Registered User of the trademark.

This stage illustrates that registration is not automatic or guaranteed. Rather, it is subject to regulatory scrutiny designed to preserve the integrity of the trademark register and ensure that trademarks continue to perform their essential function of identifying the commercial origin of goods and services.

5. POST-REGISTRATION COMPLIANCE

Following the registration and approval of a trademark licence, the parties remain subject to certain statutory obligations under the Act. These requirements regulate the continued use of trademarks and ensure that the rights granted under the licence are exercised within the limits prescribed by law. In particular:

• licences may be geographically limited within Tanzania
• licences cannot be assigned to third parties
• registered users are prohibited from granting sub-licences unless otherwise permitted by law.

These restrictions reinforce the principle that trademark rights are closely controlled by the registered proprietor.

6. LESSONS FROM RECENT COURT DECISION

The importance of complying with the statutory requirements governing trademark licensing is illustrated in the case of SANLG WORLDWIDE INVESTMENT v WU ZHOU INVESTMENT COMPANY LIMITED, Commercial Case No. 592 of 2024, High Court of Tanzania (Commercial Division).

In this case, the plaintiffs instituted proceedings alleging that the defendants had infringed their registered SANLG trademark concerning motorcycles and motorcycle accessories. In response, the defendants contended that their use of the trademark was lawful because they had entered into a Trademark Licensing Contract dated 15 December 2022 under which they claimed to have been granted the exclusive right to manufacture, assemble and distribute SANLG products.

While the defendants relied on the licensing agreement as the basis of their defence, the dispute underscores a fundamental principle that the execution of a Trademark Licensing Agreement, by itself, does not automatically authorize the licensee to use a registered trademark. As discussed above, the Act requires the proposed licensee to be registered as a Registered User and further requires the licensing arrangement to be approved by the Registrar before it can acquire legal recognition. Compliance with these statutory requirements is an essential condition for the lawful use of another person’s registered trade or service mark, as failure to comply with these requirements may expose the licensee to allegations of trademark infringement and undermine the rights the parties intended to create.

Ultimately, the decision reinforces a simple but important lesson: in Tanzania, a trademark licence derives its legal strength not merely from the agreement executed by the parties but from compliance with the statutory requirements prescribed under the Act.

7. UNDERSTANDING TRADEMARK ASSIGNMENT

A trademark assignment refers to the legal transfer of ownership rights in a trademark from one person (the assignor) to another (the assignee). Unlike a trademark licence, where ownership remains with the proprietor, an assignment permanently transfers the proprietary rights in the trademark to the assignee, who thereafter becomes the new owner of the mark.

The law under Section 40 of the Act recognizes the assignment of trademark rights and permits the assignment of registered trademarks and trademark applications that are still pending registration. This flexibility enables businesses to transfer valuable intellectual property rights even before completing the registration process.

8. THE SCOPE OF A TRADEMARK ASSIGNMENT

One of the distinguishing features of trademark assignments is their flexibility. Parties are not restricted from transferring every right associated with a trademark. Instead, the law allows trademark rights to be assigned in a manner that best reflects the parties’ commercial intentions.

A trademark assignment may take either of the following forms:

Entire Assignment

Under an entire assignment, the assignor transfers all proprietary rights in the trademark to the assignee in respect of every good or service for which the trademark is registered or applied. Upon completion of the assignment, the assignee assumes full ownership of the trademark, together with all the rights and privileges attached to it.

Partial Assignment

Alternatively, parties may agree to a partial assignment, whereby ownership is transferred only in relation to specific goods or services covered by the trademark registration. This allows businesses to retain ownership of trademarks in certain product lines while transferring rights to others, thereby providing greater commercial flexibility in structuring transactions.

Whether the assignment is entire or partial, the transaction may relate to either a registered trademark or a trademark application that is still pending before the Registrar.

9. RECORDATION OF THE ASSIGNMENT: A CRITICAL COMPLIANCE REQUIREMENT

Negotiating and executing an assignment agreement is only the first step in transferring the ownership of a trademark. For the assignment to acquire legal effect against third parties, it must also be recorded with the Business Registrations and Licensing Agency (BRELA).

This statutory requirement serves an important public purpose. Recording the assignment ensures that the official trademark register accurately reflects the identity of the current proprietor, thereby promoting transparency and legal certainty for businesses, investors and members of the public dealing with registered trademarks.

Until the assignment is duly recorded, it has no legal effect against third parties. Consequently, although an assignment agreement may create contractual rights and obligations between the assignor and assignee, third parties are not legally bound to recognize the transfer until it is reflected in the official register.

Documents Required for Recordation

To facilitate the recordation of a trademark assignment, the following documents are generally required by the Registrar:

Assignment Agreement

The primary document evidencing the transfer is an Assignment Agreement. A signed copy is generally sufficient, provided that it clearly demonstrates the parties’ intention to transfer ownership of the trademark. The document should be executed by both the assignor and assignee.

Power of Attorney

Where the application is lodged through an advocate or trademark agent, a duly executed Power of Attorney authorizing the representative to act on behalf of the parties is required.

Supporting Documents

Depending on the nature of the transaction, additional supporting documents may be required. For example, if the assignment involves rights arising from a foreign priority application, documentary evidence confirming the transfer of those priority rights should also be submitted.

10. THE LEGAL EFFECT OF RECORDATION

The registration of a trademark assignment has significant legal consequences beyond simply updating the trademark register. Once the assignment is recorded by the Registrar, the assignee acquires important legal rights and protections, including the following:

1. The official trademark register is updated to reflect the assignee as the new trademark proprietor.
2. The assignee acquires legally enforceable ownership rights that can be asserted against third parties.
3. The recordation places the public on constructive notice of the change in ownership, thereby minimizing disputes concerning the identity of the rightful proprietor.
4. Where the assignment relates to a pending trademark application, the recordation operates provisionally until the trademark is registered, after which the assignee’s title is formally reflected in the register.

These legal consequences underscore why recordation should never be regarded as a mere administrative exercise. This is the statutory mechanism through which ownership becomes publicly recognized and legally enforceable.

11. RESTRICTIONS ON TRADEMARK ASSIGNMENT

While trademark proprietors are generally entitled to transfer their ownership rights, this freedom is subject to important statutory safeguards designed to protect consumers. Accordingly, the Registrar may refuse to register an assignment where the proposed transfer is likely to deceive or confuse the public, particularly regarding:

• the origin of the goods or services
• the manufacturing process
• the quality or characteristics of the goods or services
• the suitability of goods or services for their intended purpose.

These restrictions reflect one of the fundamental objectives that trade or service marks are intended not only to protect the commercial interests of their proprietors but also to enable consumers to identify the true commercial origin and quality of the goods and services they purchase. Consequently, where an assignment is likely to undermine consumer confidence or distort the marketplace, the Registrar is empowered to refuse its registration to preserve the integrity of the trademark system.

CONCLUSION

The increasing commercial value of trademarks demands an equally robust approach to their legal protection. Therefore, businesses are encouraged to move beyond viewing trademark licensing and assignment as routine commercial transactions and instead recognise them as regulated legal processes that require careful planning and strict statutory compliance. By taking proactive measures to ensure that trademark transactions are properly structured, registered and recorded, businesses can minimise legal risks, preserve the integrity of their brands, and confidently maximise the commercial potential of their intellectual property.

DISCLAIMER

This Article is not intended to offer legal advice but rather to provide general information on the subject matter discussed. It does not constitute and should not be relied upon as legal advice. Victory Attorneys & Consultants explicitly disclaims any responsibility for any loss that may occur if this Article is relied upon without first seeking professional advice from our legal experts.

Authored by;
Adv. Catherine M. Mkama
Corporate & Commercial Property Department