IP licence agreement: to use name or trademark for merchandising in a different field or industry

This is a licence agreement for merchandising rights in any work of intellectual property. The key element is the exploitation of a creative work (most likely a brand name or fictional character) in a different application or market. For example, it could be used by a manufacturer who wishes to create soft toys based on characters in a series of popular television advertisements. It could also be used for products in the same industry, for example to sell shampoo under a name well known for cosmetics.

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About this document

This agreement allows one party to exploit the intellectual property rights in another product or work, in a different market, or applied in a different way.

Situations where a brand might be used in alternative applications include manufacture or production of:

  • toys for children based on characters from a television show or computer game

  • cosmetics showing the logo of a sporting event or sports club

  • clothes for children based on a successful adult label

  • garden tools or kitchen utensils under the name of a celebrity

There are options to control how the IP is used, which include

  • limitations on the duration of the agreement

  • where the merchandise can be sold and how

  • how the IP or brand can be used (what type of merchandising or the necessary quality of the products)

We have provided for both an up-front payment and a royalty based on sales. You can choose one or both. A licensor will often want a fixed sum immediately, just in case the merchandiser is not as good as hoped.

The IP may be supported by additional licensed material. That might be trade marks, registered designs or know-how that is essential to its operation, but which is not itself part of the rights. You license this extra material only in support of the main product. It is subject to stricter protection.

There are two reasons why you might wish to protect this additional material more strongly:

First, it may have far wider application and you may want to use it in the same market for other applications, or in other products and other markets.

The second reason is that you may not own all the supporting material. You may yourself use some IP which has been licensed from others.

Similar agreements

A simpler version of this contract is for the licence of copyright in a work. As you would expect from a shorter agreement, it gives far less control over how the work is used.

Contents

This is a comprehensive agreement that covers all the matters likely to be important to you. These include:

  • Definitions and interpretation
  • Warranties and understandings
  • Licensor’s representations about the subject matter
  • The licence of the IP and up front fee
  • Approval of licensed products
  • Licence of supporting IP
  • Limited sub-licence
  • Use of third party IP
  • Royalty calculation
  • Protection of licensed material
  • New IP and derived products
  • Third party infringement
  • Continuing improvement and updates
  • Derived products
  • Confidentiality
  • Indemnities
  • Other matters relating to enforcement and other legal issues

In addition, we provide over 2,800 words of notes describing your options for each paragraph and giving help on how to edit the document.

Draftsman

This document was written by a solicitor for Net Lawman. It complies with current English law.

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