Exposing Legal Pitfalls: Trademark Misuse in Franchise Agreements and Partnership Liability

Abstract

The legitimate use of the trademark is performed by developing a license agreement containing the rights and obligations between the licensor and licensee. This license agreement is based on the principles of the consensus contained in contract law, namely the principle of good faith and freedom of treaty. In reality, some parties do not comply with these principles, causing disputes related to the rights and obligations of the parties, as well as license misuse. Therefore, this study aimed to analyze the trademark license arrangement and the form of legal liability for contract misuse in franchise system. Doctrinal or normative legal study methodswere used, with primary and secondary data obtained through interviews and literature review. As a civil law country, the regulation of trademark license agreements in Indonesia emphasized applicable policies to provide legal certainty. The results showed that the misuse of these agreements caused legal consequences for the offending party. These consequences included liability for aspects of franchise agreement violation, trademark infringement, as well as civil and criminal liabilities.