Checklist Drafting Merchandising License Agreements

Company Letterhead Block

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

Date and Reference

Date: {{date}}

Reference: {{reference_number}}

Parties and Definitions

1.1. Licensor details: Full legal name, registered address, company registration number. ({{licensor_name}}, {{licensor_address}}, {{licensor_registration_number}})

1.2. Licensee details: Full legal name, registered address, company registration number. ({{licensee_name}}, {{licensee_address}}, {{licensee_registration_number}})

1.3. Definition of Licensed IP: Clearly identify the intellectual property being licensed (e.g., trademarks, copyrights, characters). ({{licensed_ip_description}})

1.4. Definition of Licensed Products: Specify the types of products on which the Licensed IP will be used. ({{licensed_products_description}})

1.5. Definition of Territory: Define the geographical area where merchandising activities are permitted. ({{territory}})

Grant of License and Exclusivity

2.1. Grant: Clearly state that the Licensor grants a non-exclusive/exclusive, non-transferable/transferable license to the Licensee. ({{license_type}})

2.2. Scope: Detail the rights granted (e.g., manufacture, distribute, sell, advertise). ({{scope_of_rights}})

2.3. Exclusivity: Specify if the license is exclusive, non-exclusive, or semi-exclusive and any conditions. ({{exclusivity_clause}})

2.4. Reservations of Rights: State any rights not granted to the Licensee. ({{reserved_rights}})

Financial Terms

3.1. Royalty Rate: Percentage of net sales or a fixed amount per unit. ({{royalty_rate}})

3.2. Minimum Guarantee: Specify any minimum royalty payments due regardless of sales. ({{minimum_guarantee_amount}})

3.3. Advance Payment: Any upfront sum paid against future royalties. ({{advance_payment_amount}})

3.4. Payment Schedule: Frequency of royalty payments (e.g., quarterly, semi-annually). ({{payment_schedule}})

3.5. Reporting Requirements: Mandate regular sales reports from the Licensee. ({{reporting_frequency}})

Quality Control and Approvals

4.1. Sample Submissions: Requirements for submitting product samples, packaging, and promotional materials for approval. ({{sample_submission_process}})

4.2. Approval Process: Timeline for Licensor review and approval. ({{approval_timeline}})

4.3. Quality Standards: Stipulate quality benchmarks for Licensed Products. ({{quality_standards}})

4.4. Prohibited Uses: List any forbidden applications of the Licensed IP. ({{prohibited_uses}})

Intellectual Property Ownership and Protection

5.1. Ownership: Reaffirm Licensor's sole ownership of the Licensed IP. ({{ip_ownership_clause}})

5.2. Infringement: Procedures for notifying the Licensor of potential infringements and responsibility for enforcement actions. ({{infringement_procedure}})

5.3. IP Markings: Requirement for Licensee to include appropriate trademark/copyright notices on Licensed Products. ({{ip_marking_requirements}})

Term and Termination

6.1. Term: Duration of the agreement. ({{agreement_term}})

6.2. Renewal Options: Conditions for extending the agreement. ({{renewal_options}})

6.3. Termination for Cause: Grounds for immediate termination (e.g., breach of contract, insolvency). ({{termination_for_cause}})

6.4. Post-Termination Obligations: Actions required after termination (e.g., inventory disposal, cessation of use of IP). ({{post_termination_obligations}})

Warranties, Indemnities, and Insurance

7.1. Licensor Warranties: Assurance of ownership and right to license IP. ({{licensor_warranties}})

7.2. Licensee Warranties: Assurance of compliance with laws and quality standards. ({{licensee_warranties}})

7.3. Indemnification: Clauses protecting each party from third-party claims arising from the other's actions. ({{indemnification_clause}})

7.4. Insurance: Requirement for Licensee to maintain adequate liability insurance. ({{insurance_requirements}})

General Provisions

8.1. Governing Law: Jurisdiction whose laws will govern the agreement. ({{governing_law}})

8.2. Dispute Resolution: Mechanism for resolving disputes (e.g., negotiation, mediation, arbitration, litigation). ({{dispute_resolution_mechanism}})

8.3. Confidentiality: Provisions regarding the protection of proprietary information. ({{confidentiality_clause}})

8.4. Entire Agreement: Clause stating the agreement constitutes the entire understanding between parties. ({{entire_agreement_clause}})

8.5. Notices: Formal method for delivering legal notices. ({{notice_delivery_method}})

8.6. Assignment: Restrictions on assigning rights or obligations. ({{assignment_restrictions}})

Signature Block

Agreed and Accepted by:

___________________________

Licensor Signature

Name: {{licensor_signatory_name}}

Title: {{licensor_signatory_title}}

Date: {{licensor_signature_date}}

___________________________

Licensee Signature

Name: {{licensee_signatory_name}}

Title: {{licensee_signatory_title}}

Date: {{licensee_signature_date}}