Term and Territory
How long is the Term for which you have rights? Is there any extension at the end of the Term or a sell-off period for any stock? Is the Territory less than worldwide? If so, can you add other territories as the deal progresses? And is there anything you can legally do about goods or services sold in to your Territory from outside of it?
Grant of Rights
Are your rights exclusive or non-exclusive? If they are non-exclusive are you able to protect the value of your licence? What rights do you have? Manufacturing? Selling? Marketing? Advertising and promotion? For which sales channels do you have these rights? Do they include online and mobile? Can you sub-licence to someone else?
Do you need any approvals from the Licensor before you carry out particular activities? If so, are there any time limits the Licensor must comply with? Must the Licensor be “reasonable” about granting approvals or not? Must the approval be in writing or is it okay if it’s verbal?
If there is an advance or licence fee when is that payable? Can some of it be staged rather than it all being paid up-front? Or can it be expressed as a guarantee which is not paid out till the end of the Term? Is it off-set against royalties or commission you have to pay? How is any royalty or commission calculated? What is the “base price” – is it a dealer or retail price? Can deductions be made from that base price before calculating the royalty – for example, discounts or rebates you give to customers, packaging costs you incur, or marketing costs you spend?
How often do you have to account for royalties? In what format must statements be delivered and in what currency must you pay? Must you receive an invoice before payment? How are withholding taxes dealt with – may you deduct them?
Do you have a promise in the agreement that the product is owned by the Licensor and that they are fully entitled to grant you all rights? Have all rights granted to you been fully cleared and paid for?
Marketing Commitments and Service Levels
Are you agreeing to any marketing or service level commitments? If so, are they precise, measurable, achievable and timetabled? Are there any service level commitments you need to impose on the Licensor to cover things like maintenance, repair, replacement of faulty goods or fixing software bugs?
Changing Contractual Partners
Are you able to assign the agreement to someone else if you need to? If you take in investment and have a change of control does that affect your rights – can the Licensor terminate?
LawBite Legal Advice
LawBite professional advisors can help you straightaway with all of these issues and more. Just go to the the Legal Advice section and make your enquiry. We’ll get back to you within 24hrs with a meaningful response.