California Licensing & Merchandising Agreements
California licensing and merchandising agreements are typically two-party contracts between entertainment companies located within the state. The companies enter into an agreement to license the right to use logos or trademarked insignias on movie or television merchandising for commercial sale to the public.
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Grant of License
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The licensor stipulates how the licensee will use the merchandise in connection with manufacturing, marketing and selling. Within the California licensing and merchandising agreement, the licensor typically reserves the right to grant additional licenses to other licensees without limitation.
Territory and Distribution
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The licensee agrees to exercise the license within the prescribed territories, jurisdictions and country boundaries as stipulated by the licensor within the California licensing and merchandising agreement. The licensor prohibits the licensee from exercising a license to manufacture, market or sell copyrighted and trademarked products outside the retail distribution channel.
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Payment
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The licensee agrees to the licensor's request for guaranteed minimum compensation in the form of an advance. The licensor provides a payment schedule. Although the advance is typically non-refundable, the licensee may request the licensor offset this cost against the balance of future royalties.
Royalty
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The licensor stipulates how the licensee will remit royalties. Within a standard California licensing and merchandising agreement, the licensee must typically pay royalties on a quarterly basis within a specified time before the end of the royalty period. The licensee typically pays a royalty based on a percentage of net sales.
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References
Resources
- Photo Credit form -3 image by Rog999 from Fotolia.com
