Co-branding can often provide brand owners with a platform to expand their consumer base. The brand of the cooperating brand should attract attention, which generally does not follow the promotion related to its own brand, and if the brand that has cooperated uses a famous or well-known brand, it can serve as a platform to increase awareness and recognition of a lesser known brand. The co-branding agreement must also include mutual compensation and liability insurance, since each party effectively uses the other party`s mark in the structure. Yes, for example. B, a new product has two components of two companies and one of them is defective, the other party can be sued under a particular case and under the law, since both parties manufacture the product together. It is essential that the licence contain provisions allowing the donor to maintain quality control of the products or services granted during the licence period. In the absence of such control, a so-called “naked” licence can be created, resulting in the loss of trademark rights and, in the worst case, the termination of the trademark. Co-branding partnerships can be subject to litigation due to the unpredictability of the reception and the requirement for such cooperation. Since each party brings its brand and reputation to the campaign, litigation can arise from common concerns (for example. B the quality of goods and services marketed as part of the campaign, distribution channels, advertising, termination and extension rules, licensing objectives, exclusivity and market share). While many of these issues can be addressed in the original licence, most of them will require regular monitoring and renegotiation and will often require careful consideration in response to changes in consumer demand and market conditions. Cooperation can generate competition. The ideal license is therefore delineated the ownership of co-branded real estate that may result from the joint efforts of the parties.
In addition, the license should identify licensed actions resulting from the co-brand and contain appropriate renegotiation conditions to take into account changes in circumstances due to potential successes or defects. The underlying licence should be formulated in such a way as to prohibit the use of the mark, which may be pejorative or detrimental to a party`s reputation.