PLAYDIGM Entertainment Licensing & Branding

For the next few posts I will be breaking down a general Licensing Agreement clause-by-clause and giving brief explanations on what it all means. For the beginning of this series of posts, start at the first one dated Sept 14, 2009 (scroll down).

This is the next clause in a Licensing contract:

7. OWNERSHIP OF RIGHTS

7.1 It is understood and agreed that the Licensor is the sole and exclusive owner of all right, title and interest in and to the Property detailed in Schedule A.

7.2 It is understood and agreed that the Licensee is the sole and exclusive owner of all right, title and interest in (insert products to use Licensor’s Property) and related components and characters on the cover of the box.

7.3 Nothing contained in this Agreement shall be construed as an assignment to the Licensee of any right, title and/or interest in and to the Property as stated in Schedule A (other than for usage). Nothing contained in this Agreement shall be construed as an assignment to the Licensor of any right, title and/or interest in and to the product and or related characters/components.

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7.1 This first clause is a straight forward explanation to clear up that only the Licensor owns the Property and Trademarks expressed in Schedule A that are to be licensed by the Licensee. I will break down what is in Schedule A at the end of this Licensing Agreement since it is attached to the back of the document.

7.2 This clause clarifies that the Licensee owns all right, title and interest to the products they manufacture of which they desire to use the Licensor’s Property upon. The Licensee also retains ownership and all rights to all related components and characters on the cover of the box. The characters are the Licensee’s copyright and brand.

7.3 Nothing in the Agreement allows for any transfer or assignment from the Licensor of any right, title and/or interest in and to the Licensor’s Property as detailed in Schedule A (other than for the use of that Property as described in this Agreement). Nothing contained in this Agreement allows for the Licensor to have any right, title and/or interest in and to the Licensee’s products and or related characters/components.

In Licensing Agreements I have been involved with since this one was created and signed, I make sure that the Licensor’s Property and Licensee’s Products are stated in more detail in this section of the contract. The most important part is that none of the above allows for the granting or transfer of ownership rights from, or to either party and it clarifies who owns what.

Next – Licensing Agreement #10  GOOD WILL BENEFITS

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As most of you know, I am not a lawyer or an accountant and I recommend everyone seek their own legal counsel, accountant and tax advice in all contractual matters. I provide consulting which is detailed on the ‘services’ page of this website.

Hope this contract breakdown helps you understand the intricacies of a Licensing Agreement. Should you have any questions contact me at info@Playdigm.com – please put ‘Your name & Licensing’ in the subject line of your email.

Thank you.

Sandford Tuey

For the next few posts I will be breaking down a general Licensing Agreement clause-by-clause and giving brief explanations on what it all means. For the beginning of this series of posts, start at the first one dated Sept 14, 2009 (scroll down).

This is the next clause in a Licensing contract:

6. SAMPLES AND QUALITY

6.1 The quality of the Products bearing the Licensor’s Property shall be at the least as high as the quality of other products produced by the Licensee. This shall include advertising, all promotional materials and other items that includes the Property and/or Trademarks and shall be in full conformance with the applicable laws and regulations.

6.2 A reasonable number (1-5) production samples will periodically be sent to Licensor to ensure quality control, and should Licensor require additional samples for any reason, Licensor may purchase such at Licensee’s cost (for sample purpose only).

6.3 The Licensee agrees that all Licensed Products and all Promotional material/Advertising shall contain appropriate legends, markings and/or notices as required from time to time by the Licensor, to give appropriate notice to the consuming public of the Licensor’s right, title and interest thereto. The Licensee agrees that unless otherwise expressly approved in writing by the Licensor each usage of their Trademark and Property shall be followed by either the TM or the Circle R Trade Mark Notice symbol, as appropriate, and initially the following legends shall appear at least once on each Licensed Product and on each piece of Promotional/Advertising material.

“Artwork and Product Copyright: (date) (Licensee name)(Product Title) Trade Mark and Logo are owned by (name of Licensee). The (Licensor name) and Logo are Trade Marks of (the name of Licensor).”

6.4 Upon commencement of manufacture, shipment and distribution of the Licensed Products and/or Promotional materials relating to said Licensed Products the Licensee shall submit, at its own cost, an addition five (5) samples of the Licensed Products and/or Promotional materials to the Licensor.

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Clause 6.1 ensures that the quality of the Products using the Licensor’s Property and Trademark shall be the same quality as other products designed and produced by the Licensee previously. This also includes advertising, all promotional materials (brochures, one sheets, etc…) and other items that includes the Property and/or Trademark and shall be in full conformance with the applicable laws and regulations. The Licensee should try not to have all their Licensed Products, Advertising and promotional materials requiring the written approval by the Licensor as this will cause delays in production of such products/materials. You can have a response time limit. where any materials sent to the Licensor by the Licensee for approval is automatically approved by the Licensor if no response if given within thirty days. This clause also puts the onus on the Licensee to conform to the laws of each company they market the Licensed Products into.

6.2 Allows the Licensor to receive a reasonable number, up to five production samples, that will be sent periodically to the Licensor to ensure quality, and if the Licensor requires additional samples for any reason, Licensor may buy such at Licensee’s production cost (for sample purpose only). This makes sure the Licensor can only purchase a limited number not for resale to any mass market, as this would limit the Licensee’s ability to make a profit from these type of sales into similar markets. It is best to come to an agreement on the price of these sample Licensed Products and the Licensee should try to build in a marginal profit.

6.3 states the Licensee agrees to make sure all Licensed Products and all Promotional material/Advertising they make will contain appropriate legends, markings and/or notices as required from time to time by the Licensor. This allows the consuming public to know that the Licensor owns, has right, title and interest in the Property and Trademark. The Licensee also agrees that if approved in writing by the Licensor each usage of their Trademark and Property shall be followed by either the TM notice or the Circle R Trade Mark Notice symbol, and they will appear at least once on each Licensed Product and on each piece of Promotional/Advertising material. The below is exactly the lay out that was required to be on each item.

“Artwork and Product Copyright (date) (Licensee name)(Product Title) Trade Mark and Logo are owned by the Licensee. The (Licensor name) and Logo are Trade Marks of the Licensor.”

6.4 Upon commencement of manufacture, shipment and distribution of the Licensed Products and/or Promotional materials relating to said Licensed Products the Licensee shall submit, at its own cost, an addition five (5) samples of the Licensed Products and/or Promotional materials to the Licensor. I recommend to send these items every time you do a new production run.

Next – Licensing Agreement #9 OWNERSHIP OF RIGHTS

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As most of you know, I am not a lawyer or an accountant and I recommend everyone seek their own legal counsel, accounting and tax advice in all contractual matters. I provide consulting which is detailed on the ‘services’ page of this website.

Hope this contract breakdown helps you understand the intricacies of a Licensing Agreement. Should you have any questions contact me at info@Playdigm.com – please put ‘Your name & Licensing’ in the subject line of your email.

Thank you.

Sandford Tuey