IP licence agreement

To use name or trademark for merchandising in a different field or industry
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Document overview

This is a heavyweight licence agreement for merchandising rights in any product or work of intellectual property. The key element is the exploitation of a creative work in a different application or market. It is most likely to be connected with children's entertainment, as for example creating toys from a popular television advertisement. However, this licence agreement also could be used in the same industry, for example to sell shampoo under a name well known for cosmetics.
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  • Length:22 pages (6500 words)
  • Available in:
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About this merchandising agreement

You own the intellectual property rights in a successful consumer entertainment or product. Some features in your “work” are suited to exploitation in a different consumer market.

Examples of the cross selling are:

  • toys for children, from a television show or insurance advertisement;
  • drinks from a hit song;
  • shampoo from a range of cosmetics;
  • children’s clothes from a successful adult label;
  • clothes or food from a sporting event.

However, this licence agreement could be used for any situation where intellectual property rights are licensed for some sort of exploitation by another business.

The agreement may last for years, or for the duration of the event. Merchandise may be sold at the event, after the event, in shops, via the Internet or in some other way. This agreement gives you all such options. It is drawn to cover many alternatives and to protect you, the owner of the rights.

You will receive an up front fee and/or a royalty on sales.

Rather than using legalistic words, we have assumed that for this agreement the merchandise is related to a set of children’s TV characters called “Animalia”. As we explain in the drafting notes, you will want to change that definition to “Barnsley soccer Derby”, “International Darts Festival”, “Dark Green Jade Concert”, or as your case may be.

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 up front, just in case the merchandiser is not as good as he says he is.

The software, drawings, specifications and know-how of Animalia will be supported by additional licensed material. That might be trade marks, registered designs, know-how and other intellectual property which is essential to its operation but which is not itself part of the Animalia 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 will wish 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 he has licensed to you from others. The best he can do with that IP is to make sure you are allowed to sub-license it, then do just that.

You choose the exact deal you want in this agreement. You are always in control. You can choose the period the deal is to run, the type of merchandising, countries for selling, quality of goods and more. Each of these is the subject of a separate sub paragraph, for easy edit by you. You can choose “in” or “out” or edit.

If you have an idea or product you want to pass to someone else to make and sell, we offer more suitable Assignment, sale and transfer in our library.

All Net Lawman documents are written to protect primarily the document buyer. However, we do not invite problems for you by ignoring the likely requirements of your counter-party. There are many provisions in this document which satisfy the concerns of a fair minded licensee. The drafting notes you receive with the document elaborate on this point.

This agreement provides the complete legal framework for what would otherwise be a complicated deal. The Net Lawman modular structure in plain English takes you smoothly through the detail of a document of over 6,000 words.

Key features

  • Professionally drawn, tough law
  • Easy to edit (as always with Net Lawman documents)
  • Thorough coverage of legal areas
  • Practical, alternative business provisions
  • No requirement for you to be your own lawyer

Alternatives to this merchandising agreement

Net Lawman offers around 20 licence agreements and assignments relating to intellectual property in addition to those in website terms and conditions.

You can find the full selection at:

Contents of this agreement

It is impossible to explain a six thousand word document in a few lines, but here is a list of the major subjects covered:

  • Definitions and interpretation
  • Warranties and understandings
  • Licensor’s representations about the subject matter
  • The Licence of Animalia 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 intellectual property and derived products
  • Third party infringement
  • Continuing improvement and updates
  • Derived products
  • Confidentiality
  • Indemnities
  • Other matters relating to enforcement and other legal issues
Sample ip licence agreementFront cover

Recent reviews

Good template
19 May 2014
A good template document that was easy to amend to reflect individual circumstances.
Phil Raffan
Review of the Australian version

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