Trademark Licensing Protection Act

The Trademark Licensing Protection Act (TLPA) will resolve the inconsistency regarding brand controls in federal law: trademark law requires franchises to protect the brand through standardized brand controls, but at the same time, employment law penalizes franchises by deeming them “joint employers” for having the same brand controls.

Background

In franchising, the brand company, or franchisor, sets standards and ensures consistency of consumer experience, while the individual owner operates the business location and retains its profit.

There is a conflict of laws between trademark law and employment law. Specifically, the Lanham Act requires trademark holders to guard the use of their intellectual property licensed to third parties so that the brand is consistent and uniform to consumers. Without consistent brand standards, the brand loses its quality and value. Since 2013 however, there has been a 93% increase in litigation against franchise brands exercising their brand standards.

The Trademark Licensing Protection Act (TLPA) resolves the catch-22 facing franchise brands, affirming that brand standards issued to preserve or enhance the brand may not be used as evidence of employment controls in litigation.

To get involved, become a part of the Franchise Action Network (FAN)!