The Merchandise Licensing Agreement is a crucial commercial contract used when a business wants to authorize another party to produce and sell products featuring their intellectual property. This agreement type is particularly relevant in the Canadian market, where it must comply with federal laws such as the Trademarks Act, Copyright Act, and Competition Act, as well as provincial consumer protection legislation. The document establishes comprehensive terms covering license scope, territory rights, quality standards, royalty structures, and approval processes. It's commonly used by brand owners, entertainment companies, sports organizations, and other intellectual property holders who wish to expand their brand presence through licensed merchandise while maintaining control over their IP and ensuring compliance with Canadian legal requirements. The agreement typically includes detailed schedules specifying licensed properties, approved products, and quality standards.
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1. Parties: Identification of the licensor and licensee with their full legal names and addresses
2. Background: Context of the agreement, including description of the intellectual property being licensed and the parties' intentions
3. Definitions: Detailed definitions of key terms used throughout the agreement
4. Grant of License: Scope of the license, including territory, exclusivity, and permitted uses of the licensed property
5. Term and Renewal: Duration of the agreement and conditions for renewal
6. Royalties and Payments: Financial terms, including royalty rates, minimum guarantees, and payment schedules
7. Quality Control: Standards for product quality, approval processes, and inspection rights
8. Intellectual Property Protection: Provisions for protecting the licensed IP, including trademark usage guidelines and ownership confirmation
9. Manufacturing and Distribution: Requirements and restrictions for production and distribution of licensed merchandise
10. Records and Audits: Record-keeping requirements and audit rights
11. Representations and Warranties: Standard warranties regarding IP ownership, authority to license, and product quality
12. Termination: Grounds for termination and post-termination obligations
13. General Provisions: Standard boilerplate clauses including governing law, notices, and assignment
1. Sublicensing Rights: Include when licensee is permitted to sublicense the rights to third parties
2. Marketing and Promotion: Include when specific marketing requirements or restrictions are needed
3. E-commerce Rights: Include when online sales are part of the distribution strategy
4. Corporate Social Responsibility: Include when specific ethical or environmental standards must be met
5. Export Control: Include when products may be subject to international trade restrictions
6. Competition Law Compliance: Include when there are specific competition law concerns
7. Insurance Requirements: Include when specific insurance coverage is required
8. Force Majeure: Include when specific events beyond parties' control need to be addressed
1. Schedule A - Licensed Property: Detailed description and images of the intellectual property being licensed
2. Schedule B - Licensed Products: List and specifications of approved merchandise categories
3. Schedule C - Quality Standards: Detailed quality control requirements and specifications
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 approval and timelines
6. Schedule F - Trademark Usage Guidelines: Specific requirements for using the licensed trademarks
7. Appendix 1 - Approved Manufacturers: List of approved manufacturing facilities
8. Appendix 2 - Approved Distribution Channels: List of approved retailers and distribution channels
Relevant legal definitions
Clauses
Relevant Industries
Retail
Consumer Goods
Entertainment
Sports
Fashion
Media
Gaming
Character Licensing
Toys and Games
Apparel and Accessories
Home Goods
Food and Beverage
Relevant Teams
Legal
Commercial
Intellectual Property
Business Development
Product Development
Quality Assurance
Sales
Compliance
Finance
Marketing
Operations
Brand Management
Relevant Roles
Licensing Director
Legal Counsel
Commercial Manager
Brand Manager
Intellectual Property Counsel
Business Development Manager
Merchandise Manager
Contract Administrator
Compliance Officer
Product Development Manager
Sales Director
Quality Assurance Manager
Chief Commercial Officer
Licensing Coordinator
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