Final answer:
A licensor must ensure that a licensee using a trademark can do so without any additional restrictions beyond what the licensing agreement specifies, and they must respect the terms of attribution without suggesting endorsement.
Step-by-step explanation:
A licensor who allows a licensee to use a trademark as part of the licensee's company name must adhere to certain legal principles and practices. One key aspect is that the licensor must ensure that there are no additional restrictions that would unfairly or illegally limit the licensee’s use of the trademark. Under trademark licensing agreements, licensees are typically allowed to use the trademark in a manner that is consistent with the licensor’s quality standards and brand image. This ensures that the trademark's reputation is maintained. However, they cannot apply legal terms or technological measures that restrict the usage beyond what was agreed upon in the licensing agreement.
The licensor should not impose restrictions that prevent the licensee from utilizing the trademark in a way that is within the scope of the license. The licensor must also ensure adherence to the terms of attribution, which means giving appropriate credit, linking to the license, and indicating if changes were made—all without suggesting licensor endorsement of the licensee or their use of the trademark.
For example, if a company has rights to use the Nike “swoosh” in their branding, they must use it in a way that does not misrepresent or damage the Nike brand while being unable to impose extra restrictions that are not present in their agreement with Nike.