After Trademark Registration: What European SMEs Should Check Before Granting Brand Licences to Latin American Distributors

Many SMEs treat obtaining the registration certificate as the finish line: the application, examination and publication are all done, and the brand seems secured in the target market. The perspective of ISO 56005 cited in the source is the opposite: registration is only the starting point, and the purpose of IP management is to create value; value does not come from holding a certificate, but from the enterprise's ability to put the asset into the market in exchange for returns or a strengthened competitive position.

For brand owners preparing to enter Latin America, this distinction is very practical: registration addresses "whether there is a right", while licensing, franchising or local cooperation address "how the right is used, by whom, and to what extent".

One. First distinguish the three ways of exploitation

The source divides IP exploitation into three categories: direct exploitation, where the enterprise itself uses the right in products, services or processes; indirect exploitation, where third parties are permitted to use it in exchange for money or strategic consideration, for example granting a trademark licence to a Colombian distributor; and combined exploitation, where the enterprise uses the right directly in markets it operates in and licenses others in markets it does not yet operate in.

It is worth noting that the source attaches a precondition to indirect exploitation: the trademark must be registered in the country where the licence is to be granted. The same applies to combined exploitation: the right must be clear, and its scope must have been verified in those countries.

Licensing is not the default answer either. The source maps consumer and brand-oriented enterprises to trademarks and industrial designs, and lists three mechanisms: trademark licensing, franchising and direct expansion. Three paths for the same type of enterprise show that the choice depends on how the brand is to be implemented in the target market. Where the brand experience depends heavily on a uniform store image and local control, direct operation or strongly controlled franchising requires greater investment but offers more direct control; where the enterprise does not have the conditions to build its own operations in every target country, the scaling significance of licensing becomes apparent. This layer is an extension of the source's mapping; the source itself does not elaborate on it.

Two, verify the subject matter before negotiating, not amend the contract first

Latin America has no unified intellectual property registration system; the status of the rights to be licensed must be independently verified in each country. In countries where protection has not yet been obtained, there is also the risk of third parties registering the trademark first, which may directly affect the feasibility of the agreement.

Therefore, before negotiating, three things can be confirmed country by country: whether the registration covers the goods and services to be licensed; whether the name of the rights holder is accurate; and whether there are any encumbrances or restrictions that may impede the license. Doing this step first can avoid discovering, only after deep negotiations, that the subject matter is not secure in a particular country.

Three, the agreement must be amended according to the rules of the place of performance

The source notes that a license agreement must be adapted to the law of the country of performance, including competition, technology transfer, and the requirement to register the agreement with the local competent authority as required; some countries may also impose restrictions on royalties agreed in foreign currency, requiring local financial and legal advice.

A license agreement valid in Europe may not be enforceable in Latin America in the same way. The scope of use, territory, term, form of consideration, quality control and termination conditions should be clearly stated; whether the agreement requires local registration and whether consideration can be paid in foreign currency should preferably be confirmed through local advice in advance.

Four, after the license is signed, management has only just begun

The source lists "unauthorized use, use beyond the scope, or unauthorized sublicensing by the licensee" as risks of losing control, with the countermeasures being precise contract terms, compliance audits and termination mechanisms; it also separately identifies dilution of the trademark in the Latin American market, with the countermeasures being careful selection of licensees, continuous monitoring of use, and clear brand identity guidelines.

In operational terms, monitoring arrangements and the scope of the licence can be designed together: who checks stores and promotional materials, what procedure applies once improper use is discovered, and under what conditions the licence may be terminated.

Five, materials that can be prepared first

First, a country-by-country list of trademark registrations, stating the registration number, class, goods and services, and the rights holder; second, a description of how the licensed brand is to be used, including the logo, packaging, store image and promotional messaging; third, background on the proposed partner and its local channels. On that basis, the licence type and territorial scope can then be set, with the agreement's local adaptation and registration requirements checked at the same time.

The thinking behind this framework is not limited to European companies. When Chinese brands enter Latin America, the order of checks is essentially the same; the differences lie in where the rights basis is located, the agency arrangements and how consideration is settled.

Source: European IP Helpdesk article dated 2026 10 27, by Juan Carlos Suárez Delgadillo and María Camila Duque Díaz; the framework cited in the text is from ISO 56005.

Note: The content of this article is compiled from public information and is only general intellectual property popularization and practical observation, for information reference only; it does not constitute legal advice or other professional advice for any specific case, and the relevant determinations and conclusions should be subject to the official published documents and the actual circumstances of the individual case.