Licensing Advice from Chris Muggleton

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Ownership of the Property(Posted: 06-10-2009)

By Chris Muggleton

Hello!

Well I trust those who attended had a good time at Brand Licensing Europe.  The highlights for me were watching  Lenny Henry doing an impromptu stand up routine at Kindle’s Big & Small presentation and catching up with some ex Disney work colleagues who I hadn’t seen in over a decade.

This month we will discuss the Ownership of the Property.

So what is it? The Ownership of the Property clause should clearly state that there will be no transfer of ownership of the Licensor’s intellectual property to the Licensee and that all copyrights and proprietary rights are exclusively owned by the Licensor.

Consequently it is imperative that any Ownership of the Property clause clearly incorporates the following:

·          That copyrights are owned by the Licensor.

·          All work carried out by the Licensee, in creating Licensed Articles does not entitle the Licensee to a claim of copyright over the Licensed Property but is a work for hire.

·          Stipulates that a copyright notice in the Licensor’s name should be displayed clearly on Licensed Articles & packaging and that the Licensee’s name is identified as the manufacturer or distributor of the Licensed Articles.

·          As discussed previously in Assortments and Non Association, there should be no mixing of different Licensed Properties so as to cause confusion.

Further the value of holding the License is also important to the Licensees. Many smaller Licensees who have secured the Licensing rights to lucrative Properties have become themselves subject to takeovers and acquisition.

Consequently the recent trend is for Licensors to stipulate that where there is a transfer of ownership of the Licensee, the Licensor will be entitled to terminate the License Agreement immediately or should the Licensor “approve” the transfer,  a “Transfer Fee” may be due and payable to the Licensor. The Transfer Fee is normally the equivalent of the previous 12 months Royalties.

As ever do feel free to get in touch should you require any further explanation. I can be reached at chris@licensingadvice.com

Next month I will discuss Promotional Commitment.

Chris