The licensing of trademarks and service marks has accounted for a significant percentage of the income derived from trademarks over the years, although this has, historically, not always been the case. Many countries, most notably many common law jurisdictions, considered the licensing of trademarks to be unlawful, because the trademark that is licensed would no longer serve its perceived primary purpose as acting as an indication of source or origin. Subsequently, these jurisdictions introduced the concept of registered user agreements to permit a person other than the trademark owner to be an authorized user of a trademark, although some of them now recognize the traditional concept of licensing. This aversion to licensing has eroded significantly with time and today most countries and legal systems recognize the concept of licensing.

Licensing has the ability to extend the geographic range and also product range of a trademark. The feasibility and advisability of licensing a trademark is based on a case by case analysis and may depend on the goods involved, the outlook of the trademark owner, market conditions, etc . In some cases, it will be desirable to enter into agreements with licensees in each country, or with licensees for geographical regions or for certain product lines. It is also possible in some jurisdictions for a licensee to issue a further license to a sub-licensee.

A license agreement is customarily in the form of a written document which is subject to the contractual laws of a particular jurisdiction. No matter what type of licensing arrangement, the license must provide for and ensure that the trademark owner will exercise control over the quality of the licensed products, with consequences to follow with respect to the licensee for below standard products.

Licensing agreements will also provide for the payment of royalties from the licensee to the licensor based on any number of factors. Such royalties will often involve complex tax considerations and will in some countries be subject to government agency approval.

Many countries require that a license be recorded with the local Trademark Office, or other government agency. The failure to record a license in some jurisdictions may render a license invalid, and as a result the trademark may be cancelled on the ground of non-use. Also, in many countries failure to record a license may prevent the licensee from bringing action against infringers or may even legitimize the licensee, rather than the trademark licensor, as the actual owner of the trademark in the particular jurisdiction.

Just as trademark application and renewal procedures vary from country to country, trademark license recordal requirements also vary considerably, ranging from countries without a formalized practice of recordal to those that require that long-form agreements be filed.