The Merchandise Licensing Agreement is a critical commercial contract used when a brand owner wishes to authorize third parties to produce and sell products featuring their intellectual property. This agreement, governed by Indian law, establishes the framework for protecting valuable IP rights while enabling commercial exploitation through licensed merchandise. It includes detailed provisions for quality control, royalty structures, and territorial restrictions, ensuring compliance with Indian regulatory requirements including the Trade Marks Act 1999, Copyright Act 1957, and relevant consumer protection laws. The document is particularly important in industries where branded merchandise forms a significant revenue stream and requires careful management of brand reputation and product quality.
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1. Parties: Identifies and provides full details of the licensor and licensee, including registered addresses and company registration numbers
2. Background: Establishes context, confirms licensor's ownership of intellectual property, and outlines the business purpose of the agreement
3. Definitions: Defines key terms used throughout the agreement, including Licensed Property, Territory, Term, and Licensed Products
4. Grant of License: Specifies the scope, nature (exclusive/non-exclusive), and territory of the license granted
5. Term and Renewal: Defines the duration of the agreement and conditions for renewal
6. Royalties and Payments: Details the financial terms, including royalty rates, minimum guarantees, and payment schedules
7. Quality Control: Sets standards for product quality, approval processes, and inspection rights
8. Intellectual Property Protection: Outlines measures for protecting the licensed IP and handling infringement
9. Manufacturing and Distribution: Specifies production requirements, authorized manufacturers, and distribution channels
10. Marketing and Promotion: Details requirements and restrictions for marketing the licensed products
11. Reporting and Auditing: Establishes reporting obligations and audit rights
12. Representations and Warranties: Contains standard warranties regarding IP ownership and authority to contract
13. Termination: Specifies grounds for termination and post-termination obligations
14. General Provisions: Includes standard clauses like notices, assignment, governing law, and dispute resolution
1. Sublicensing Rights: Include when licensee may need to sublicense rights to third parties
2. E-commerce Rights: Include specific provisions for online sales when relevant
3. Export Control: Include when products may be subject to export regulations
4. Corporate Social Responsibility: Include when there are specific CSR requirements for manufacturing
5. Local Content Requirements: Include when there are specific requirements for local manufacturing or content
6. Exclusivity Provisions: Include detailed terms when granting exclusive rights in specific territories
7. Force Majeure: Include specific force majeure provisions beyond standard clauses when necessary for the industry
1. Schedule A - Licensed Property: Detailed description and images of all intellectual property being licensed
2. Schedule B - Licensed Products: Comprehensive list and specifications of approved products
3. Schedule C - Quality Standards: Detailed quality control specifications and procedures
4. Schedule D - Royalty Rates: Detailed breakdown of royalty rates by product category and territory
5. Schedule E - Approval Procedures: Step-by-step process for product and marketing approvals
6. Schedule F - Authorized Manufacturers: List of approved manufacturers and their facilities
7. Schedule G - Territory Restrictions: Detailed breakdown of territorial rights and restrictions
8. Appendix 1 - Brand Guidelines: Detailed guidelines for brand usage and styling
9. Appendix 2 - Reporting Templates: Standard forms for sales reports and royalty calculations
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