On September 18, 2018, Andrew Price was quoted in an article in World Trademark Review about the Trademark Licensing Protection Act, which was recently introduced on August 31, 2018, and seeks to ensure that brand controls required under the Lanham Act cannot be used against franchises to establish ‘join employer’ status.
Reflecting on the proposed legislation, Mr. Price told the reporter:
The Act appears to be a pro-business move to ensure franchisors and other licensors are not on the hook for liability of franchisees and other licensees. If franchising and licensing became more risky due to such liability, it could stymie business growth. There could be reduction in the number of franchisees and licensees and an increase in the cost to franchisees and licensees, in the form of higher franchise fees and royalties that licensors would need to counterbalance the liability – and this would surely get passed on to consumers. It does not appear the Act will have a huge impact in view of the current regulatory environment, as I generally understand it, though it may be an attempt to ensure the status quo: that while licensors have a quality control requirement under the Lanham Act, this should not mean they are running licensees’ businesses and should bear more liability. In sum, the Act’s title (Trademark Licensing Protection Act) appears to reflect that the sponsors are trying to protect the act of trademark licensing and ensure it remains a viable business tool.