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MERCHANDISING AND CHARACTER LICENSING Jed Ferdinand Grimes & Battersby, LLP Fairfield County, CT/New York City © 2009 Grimes & Battersby Franklin Pierce.

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Presentation on theme: "MERCHANDISING AND CHARACTER LICENSING Jed Ferdinand Grimes & Battersby, LLP Fairfield County, CT/New York City © 2009 Grimes & Battersby Franklin Pierce."— Presentation transcript:

1 MERCHANDISING AND CHARACTER LICENSING Jed Ferdinand Grimes & Battersby, LLP Fairfield County, CT/New York City © 2009 Grimes & Battersby Franklin Pierce Law Center Advanced Licensing Institute 2009

2 Overview The History of Merchandising The History of Merchandising Protecting Merchandising Properties Under the Intellectual Property Laws Protecting Merchandising Properties Under the Intellectual Property Laws The Art of Negotiation The Art of Negotiation The Merchandising License Agreement The Merchandising License Agreement An Overview An Overview Important Provisions in the Agreement Important Provisions in the Agreement Implications of down economy on drafting Implications of down economy on drafting The Future of Licensing The Future of Licensing

3 Introduction to Merchandising Merchandising Defined The licensing of a recognizable trademark or copyright for use on ancillary or collateral products or services The licensing of a recognizable trademark or copyright for use on ancillary or collateral products or services

4 Introduction to Merchandising - History Middle AgesPopes granted licenses to local tax collectors who paid royalties to the VaticanMiddle AgesPopes granted licenses to local tax collectors who paid royalties to the Vatican 1770s2 British ladies of nobility permitted their names to be used on a line of cosmetics in exchange for a royalty1770s2 British ladies of nobility permitted their names to be used on a line of cosmetics in exchange for a royalty 1876Adolphus Busch begins distributing a wine key as a tool containing a small blade, a foil cutter and a basic cork screw1876Adolphus Busch begins distributing a wine key as a tool containing a small blade, a foil cutter and a basic cork screw

5 Introduction to Merchandising - History 1903Helen Beatrix Potter designs a PETER RABBIT doll1903Helen Beatrix Potter designs a PETER RABBIT doll 1904BUSTER BROWN comic strip character licensed for line of products1904BUSTER BROWN comic strip character licensed for line of products 1913President TEDDY ROOSEVELT permitted his name to be used on a teddy bear for a royalty that was used to establish a network of National Parks1913President TEDDY ROOSEVELT permitted his name to be used on a teddy bear for a royalty that was used to establish a network of National Parks

6 Introduction to Merchandising - History 1918RAGGEDY ANN and RAGGEDY ANDY introduced1918RAGGEDY ANN and RAGGEDY ANDY introduced 1924LITTLE ORPHAN ANNIE comic strip becomes radio show by Ovaltine 1924LITTLE ORPHAN ANNIE comic strip becomes radio show by Ovaltine 1928Walt Disney introduces MICKEY MOUSE. First license agreement signed with Waldburger, Tanner in Switzerland for Mickey & Minnie handkerchiefs1928Walt Disney introduces MICKEY MOUSE. First license agreement signed with Waldburger, Tanner in Switzerland for Mickey & Minnie handkerchiefs

7 Introduction to Merchandising - History 1929GIRL SCOUTS of AMERICA license suppliers of Official GSA Products, ultimately producing more than 1800 different products1929GIRL SCOUTS of AMERICA license suppliers of Official GSA Products, ultimately producing more than 1800 different products 1929BUCK ROGERS introduced and becomes immediate hit (Macys sold out first 20,000 Buck Rogers rocket pistols in less than 3 hours)1929BUCK ROGERS introduced and becomes immediate hit (Macys sold out first 20,000 Buck Rogers rocket pistols in less than 3 hours)

8 Introduction to Merchandising - History 1929Disney creates STEAMBOAT WILLIE and licenses rights1929Disney creates STEAMBOAT WILLIE and licenses rights 1932Disney hires Kay Kamen (the Father of Modern Licensing) and establishes licensing program with MICKEY MOUSE1932Disney hires Kay Kamen (the Father of Modern Licensing) and establishes licensing program with MICKEY MOUSE

9 Introduction to Merchandising - History 1932child star Shirley Temple licenses SHIRLEY TEMPLE dolls1932child star Shirley Temple licenses SHIRLEY TEMPLE dolls 1936First RED RYDER BB Gun Licensed1936First RED RYDER BB Gun Licensed 1935First HOPALONG CASSIDY movie; he and TOM MIX licensed for toys and premiums1935First HOPALONG CASSIDY movie; he and TOM MIX licensed for toys and premiums

10 Introduction to Merchandising - History 1941First ARCHIE comic book published by MLJ Magazines Pep ComicsArchie, Jughead, Betty & Veronica are born1941First ARCHIE comic book published by MLJ Magazines Pep ComicsArchie, Jughead, Betty & Veronica are born 1947The HOWDY DOODY show becomes hot property on the new media, television1947The HOWDY DOODY show becomes hot property on the new media, television 1950First PEANUTS comic strip published; United Features Syndicate develops licensing programs for it and GARFIELD1950First PEANUTS comic strip published; United Features Syndicate develops licensing programs for it and GARFIELD

11 Introduction to Merchandising - History 1955LOS ANGELES RAMS, under Pete Rozelle, market their image (8 years later, NFL Properties is created)1955LOS ANGELES RAMS, under Pete Rozelle, market their image (8 years later, NFL Properties is created) 1950sWarner Bros. actively pursues licensing opportunities with its LOONEY TUNES characters1950sWarner Bros. actively pursues licensing opportunities with its LOONEY TUNES characters 1955ELVIS PRESLEY storms onto the music scene & a licensing legend is born1955ELVIS PRESLEY storms onto the music scene & a licensing legend is born 1959Original BARBIE doll introduced by Mattel at Toy Fair and a licensing legend is born1959Original BARBIE doll introduced by Mattel at Toy Fair and a licensing legend is born

12 Introduction to Merchandising - History 1960Hanna Barbara creates the FLINTSTONES1960Hanna Barbara creates the FLINTSTONES 1961Disney acquires rights to WINNIE THE POOH and a licensing legend is born1961Disney acquires rights to WINNIE THE POOH and a licensing legend is born 1962JAMES BOND 007 Movie spawns licensing programs. Warner Bros. creates Licensing Corporation of America (LCA)1962JAMES BOND 007 Movie spawns licensing programs. Warner Bros. creates Licensing Corporation of America (LCA) 1963NFL Properties formed to license team logos1963NFL Properties formed to license team logos 1964The BEATLES arrive in the US; Beatlemania craze begins1964The BEATLES arrive in the US; Beatlemania craze begins 1966KERMIT THE FROG is bornJim Henson the proud father1966KERMIT THE FROG is bornJim Henson the proud father 1969Sesame Street airs and makes OSCAR, BIG BIRD and ERNIE household names1969Sesame Street airs and makes OSCAR, BIG BIRD and ERNIE household names

13 Introduction to Merchandising - History 1970Pierre Cardin develops fashion licensing program. Cherokee (1973), Calvin Klein (1976), and Ralph Lauren (1985) follow suit1970Pierre Cardin develops fashion licensing program. Cherokee (1973), Calvin Klein (1976), and Ralph Lauren (1985) follow suit 1972American Greetings creates HOLLY HOBBY Character and commences licensing program1972American Greetings creates HOLLY HOBBY Character and commences licensing program Mid-1970sParamount Pictures aggressively pursues licensing opportunitiesMid-1970sParamount Pictures aggressively pursues licensing opportunities 1977MARY ENGELBREIT grants first license for her artworkcreates art licensing category1977MARY ENGELBREIT grants first license for her artworkcreates art licensing category

14 Introduction to Merchandising - History 1977STAR WARS motion picture releasedMaster Toy License granted to Kenner Toys. A new day in licensing begins.1977STAR WARS motion picture releasedMaster Toy License granted to Kenner Toys. A new day in licensing begins.

15 Introduction to Merchandising - History 1981First Licensing Show Staged at New York Coliseum in New York with 1000 people in attendance (current attendance is >20,000)1981First Licensing Show Staged at New York Coliseum in New York with 1000 people in attendance (current attendance is >20,000) 1982Licensing Industry Association (LIA formed)1982Licensing Industry Association (LIA formed) 1985LIA merges with Licensed Manufacturers Association (LMA) to form Licensing Industry Merchandisers Association (LIMA)1985LIA merges with Licensed Manufacturers Association (LMA) to form Licensing Industry Merchandisers Association (LIMA)

16 Introduction to Merchandising – Recent Trends Corporations wake up to Licensing as revenue source, paid advertising and way to broaden trademark protectionCorporations wake up to Licensing as revenue source, paid advertising and way to broaden trademark protection Celebrities become a dominant force in licensingCelebrities become a dominant force in licensing

17 Introduction to Merchandising The Source of Merchandising Properties: The Source of Merchandising Properties: Character & Entertainment Character & Entertainment

18 Introduction to Merchandising The Source of Merchandising Properties: The Source of Merchandising Properties: Sports & Collegiate Sports & Collegiate

19 Introduction to Merchandising The Source of Merchandising Properties: The Source of Merchandising Properties: Celebrity & Designer Celebrity & Designer

20 Introduction to Merchandising The Source of Merchandising Properties: The Source of Merchandising Properties: Corporate & Events Corporate & Events

21 Introduction to Merchandising Types of Licensed Products Types of Licensed Products State of the Industry 25 Years Ago State of the Industry 25 Years Ago Disney Disney Warner Bros Warner Bros Paramount Pictures Paramount Pictures Few Others Few Others LIMAs Harvard/Yale Survey LIMAs Harvard/Yale Survey

22 Introduction to Merchandising Total domestic licensing revenues of $5.8 billion Total domestic licensing revenues of $5.8 billion Character & Entertainment$ 2.5 billion Character & Entertainment$ 2.5 billion Corporate Marks & Brands$ 1.1 billion Corporate Marks & Brands$ 1.1 billion Fashion$ 848 million Fashion$ 848 million Sports$ 807 million Sports$ 807 million Collegiate$ 203 million Collegiate$ 203 million Art$ 167 million Art$ 167 million Music$ 113 million Music$ 113 million Publishing$ 43 million Publishing$ 43 million Non-Profit$ 40 million Non-Profit$ 40 million Others$ 22 million Others$ 22 million

23 Introduction to Merchandising Licensing Revenue by Product Category Licensing Revenue by Product Category Apparel$ 1.02 billion Apparel$ 1.02 billion Toys/Games$ 975 million Toys/Games$ 975 million Software/Videogames$ 553 million Software/Videogames$ 553 million Gifts/Novelties$ 491 million Gifts/Novelties$ 491 million Food/Beverage$ 441 million Food/Beverage$ 441 million Accessories$ 479 million Accessories$ 479 million Home Decor$ 292 million Home Decor$ 292 million

24 Introduction to Merchandising Top Ten Licensors* 1. Disney Consumer Products ($21 Billion) 2. Warner Bros. Consumer Products ($6 Billion) 3. Nickelodeon & Viacom Consumer Products ($5.2 Billion) 4. Marvel Entertainment ($5 billion) 5. Major League Baseball ($4.7 billion) 6. Sanrio ($4.2 billion) 7. Cherokee Group ($4.1 Billion) 8. National Football League ($3.5 billion) 9. General Motors ($3 billion) 10. Lucas Licensing ($3 billion) _____________ * According to License! magazine 2006

25 Protection of Properties Copyright Protection Copyright Protection Applicable for Art and Character Likenesses Applicable for Art and Character Likenesses Inexpensive and Immediate Inexpensive and Immediate Finite Duration Irrespective of Use Finite Duration Irrespective of Use Trademark Protection Trademark Protection Applicable for Names and Characters Applicable for Names and Characters Immediate and Relatively Inexpensive Immediate and Relatively Inexpensive Infinite Duration with Use Infinite Duration with Use Right of Publicity Right of Publicity State by State State by State

26 Protection of Properties Search Considerations Search Considerations All-Class Merchandising Searches All-Class Merchandising Searches Consider Other Established Uses Consider Other Established Uses Yale for locks Yale for locks Harvard for software Harvard for software Intent to Use Trademark Applications Intent to Use Trademark Applications Merchandising Classes, e.g. 9, 16, 25, 28 Merchandising Classes, e.g. 9, 16, 25, 28 Protect Before You Publicize, especially internationally Protect Before You Publicize, especially internationally

27 The Art of Negotiation Know Your Property Know Your Property Be Aware of Its Strengths & Weaknesses Be Aware of Its Strengths & Weaknesses Know the Competition Know the Competition Know Your Adversary Know Your Adversary Investigate, Investigate, Investigate Investigate, Investigate, Investigate Be Humble Be Humble Beware of assuming obligations that you cannot keep Beware of assuming obligations that you cannot keep -Licensor: marketing obligations -Licensor: marketing obligations -Licensee: product introduction -Licensee: product introduction

28 The Merchandising Agreement Type Type License vs. Assignment License vs. Assignment Exclusive vs. Non-Exclusive Exclusive vs. Non-Exclusive Basic Terms Basic Terms Compensation (Royalty Rates, FOB, Split) Compensation (Royalty Rates, FOB, Split) Net Sales Net Sales Advances Advances Guaranteed vs. Non-Guaranteed Minimum Guaranteed vs. Non-Guaranteed Minimum Royalty Periods (quarterly, yearly, monthly) Royalty Periods (quarterly, yearly, monthly) Term of Agreement/renewals Term of Agreement/renewals Licensed Territory Licensed Territory

29 Current Royalty Rates Range Median Range Median Entertainment/Character: 8-20%10% Entertainment/Character: 8-20%10% Corporate Brands:4-12%7-8% Corporate Brands:4-12%7-8% Art 3-15%6-8% Art 3-15%6-8% Designer & Fashion4-10%6% Designer & Fashion4-10%6% Colleges & Events7-9%8% Colleges & Events7-9%8% Professional Sports7-12%9-10% Professional Sports7-12%9-10% Non-Profit 4-12%6-7% Non-Profit 4-12%6-7%

30 The Merchandising Agreement Definition of Net Sales: Definition of Net Sales: Model Provision: Net Sales" shall mean LICENSEE's gross sales (the gross invoice amount billed customers) of Licensed Products, less discounts and allowances actually shown on the invoice up to a maximum of seven percent (7%) and, further, less any bona fide returns (net of all returns actually made or allowed as supported by credit memoranda actually issued to the customers). No other costs incurred in the manufacturing, selling, advertising, and distribution of the Licensed Products shall be deducted nor shall any deduction be allowed for any uncollectible accounts or allowances. Net Sales" shall mean LICENSEE's gross sales (the gross invoice amount billed customers) of Licensed Products, less discounts and allowances actually shown on the invoice up to a maximum of seven percent (7%) and, further, less any bona fide returns (net of all returns actually made or allowed as supported by credit memoranda actually issued to the customers). No other costs incurred in the manufacturing, selling, advertising, and distribution of the Licensed Products shall be deducted nor shall any deduction be allowed for any uncollectible accounts or allowances.

31 The Merchandising Agreement Best Efforts Clauses Best Efforts Clauses -Example of a ambiguous clause: LICENSEE will use its best efforts to make Licensed Products continuously available through normal channels of trade.

32 The Merchandising Agreement Best Efforts (cont.) Best Efforts (cont.) -Two considerations: a. What level of effort – best efforts vs. commercially reasonable is actually a distinction with little legal difference b. Best efforts to do what …. b. Best efforts to do what …. -Better Clause: LICENSEE shall use its best efforts to promote, market, sell and distribute the Licensed Products in the Territory during the Term of the Agreement.

33 The Merchandising Agreement Licensor Marketing Obligations: Problematic Clause Licensor Marketing Obligations: Problematic Clause Licensors Assistance in Marketing Efforts. Licensor shall provide reasonable assistance to Licensee in marketing the Licensed Products, at Licensees request, but shall not be required to expend material amounts of time or money in doing so. Celebrity shall be actively involved in promoting the Licensed Products and Sub-Licensed Products, (whether requested or not by Licensee) and wherever reasonably practicable and appropriate, shall publicly wear or use the Licensed Products and Sub-Licensed Products, particularly at public events, shows and appearances. Moreover, during the Term of this Agreement, Celebrity shall not: (a) enter into any endorsement agreement or otherwise obligate or require Celebrity to endorse any product or service for products that are then included under this Agreement; or (b) renew or extend any endorsement agreement obligating or otherwise requiring Celebrity to endorse any product or service for products that are the subject of this Agreement, which agreement was in existence before the Effective Date of this Agreement. Better to define every obligation (commercial, print, appearance) Better to define every obligation (commercial, print, appearance)

34 The Merchandising Agreement Identification of Licensed Property Identification of Licensed Property Trademarks & Character Names - likeness for celebrities Trademarks & Character Names - likeness for celebrities Straight trademark license – reference the mark and registrations (and other considerations for trade dress) Character license grant: The Property comprises: the approved names, logos, symbols, depictions, characters, characterizations, likenesses, designs, visual representations, trademark and copyrights of the ARCHIE series of characters as they appear in comic books published by Archie Comics, inclduing without limitation, the characters, Archie, Betty, Veronica, and Jughead.

35 The Merchandising Agreement Identification of Licensed Property Trade Dress--Example

36 The Merchandising Agreement Definition of Licensed Mark: Definition of Licensed Mark: Marks means the following marks along with all registrations, applications for registration and common law rights with respect to the following, whether presently owned or hereafter acquired by PCA: (a) MAGNA DOODLE and (b) any other marks that PCA agrees in writing that Ohio Art may use in connection with the Products.Marks means the following marks along with all registrations, applications for registration and common law rights with respect to the following, whether presently owned or hereafter acquired by PCA: (a) MAGNA DOODLE and (b) any other marks that PCA agrees in writing that Ohio Art may use in connection with the Products.

37 The Merchandising Agreement Better Clause: Better Clause: [A]ny and all trade names, trademarks and logos, and the designs, trade dress, copyrights, symbols, rights of publicity and visual representations, and other intellectual property and proprietary rights associated with the MAGNA DOODLE marks presently owned or hereafter acquired by PCA anywhere in the Territory and any common law rights presently owned or hereafter acquired by PCA with respect thereto anywhere in the Territory. [A]ny and all trade names, trademarks and logos, and the designs, trade dress, copyrights, symbols, rights of publicity and visual representations, and other intellectual property and proprietary rights associated with the MAGNA DOODLE marks presently owned or hereafter acquired by PCA anywhere in the Territory and any common law rights presently owned or hereafter acquired by PCA with respect thereto anywhere in the Territory.

38 The Merchandising Agreement Disputes and Governing Law Disputes and Governing Law Arbitration vs. Litigation Arbitration vs. Litigation Venue – forum selection clause Venue – forum selection clause -consider home and home provision Applicable State Law Applicable State Law

39 The Merchandising Agreement Audit and Document Retention Provisions Audit and Document Retention Provisions Time, Location, Cooperation & Payment Time, Location, Cooperation & Payment Records-Type, Location, Period Records-Type, Location, Period

40 The Merchandising Agreement Insurance Provisions Insurance Provisions Product Liability Product Liability Indemnification Provisions Indemnification Provisions Product Liability by Licensee Product Liability by Licensee Infringement by Licensor Infringement by Licensor Warranties Warranties Power to Enter Into Agreement Power to Enter Into Agreement Non-Infringement/Best of Knowledge & Belief Non-Infringement/Best of Knowledge & Belief

41 The Merchandising Agreement Quality Control Provisions Multiple Approvals of Products/Packaging/ Advertising Multiple Approvals of Products/Packaging/ Advertising Recourse for Failure to Comply Recourse for Failure to Comply

42 The Merchandising Agreement Termination Provisions Termination Provisions Termination on Notice for Breach with Right to Cure Termination on Notice for Breach with Right to Cure Immediate Right to Terminate Immediate Right to Terminate Repeated Failure to Pay Royalties Repeated Failure to Pay Royalties Failure to Maintain Insurance Failure to Maintain Insurance Failure to Meet Product Introduction & First Shipment Dates Failure to Meet Product Introduction & First Shipment Dates

43 The Merchandising Agreement Licensor Wish List: Licensor Wish List: Retain all rights or agree upon equitable sharing Retain all rights or agree upon equitable sharing Get licensee to commit to a guaranteed minimum royalty Get licensee to commit to a guaranteed minimum royalty Get highest royalty rate and advance as possible Get highest royalty rate and advance as possible Protect against domestic sublicensing Protect against domestic sublicensing Protect against FOB sales Protect against FOB sales Limit reps and warranties to best of knowledge & belief Limit reps and warranties to best of knowledge & belief Cap liability Cap liability Tie indemnity to reps and warranties Tie indemnity to reps and warranties Must be final judgment Must be final judgment Cap on income received Cap on income received Build milestones to trigger termination (i.e. Product Introduction Date, First Shipment Date or ceased sales) Build milestones to trigger termination (i.e. Product Introduction Date, First Shipment Date or ceased sales) Deal only with a reputable company Deal only with a reputable company Licensee estoppel clause Licensee estoppel clause

44 The Merchandising Agreement Licensee Wish List Licensee Wish List -exclusive rights -broadest possible territory -narrow best efforts clause -obligate licensor to protect licensed mark

45 Implications of Bad Economy Escrow monies Escrow monies Personal guarantees Personal guarantees Financing mandates : Financing mandates : Product Financing and Production. Supplier shall, throughout the term of this Agreement, have immediately available inventory ready for shipment to Retail Customers in an amount not less than five thousand (5,000) Product units (the Base Inventory Amount). Should a Retail Customer(s) indicate in writing an intention and or desire (the Purchase Intent Notification) to purchase an amount of Product that shall exceed the Base Inventory Amount, Supplier shall, within fifteen (15) days of such notice, provide the necessary factory and production financing to begin production of the number of units that are reasonably required to meet the expected current and projected ongoing demand from such Retail Customers based upon its Purchase Intent Notification. In the event that Supplier is unable to provide such production financing, 4DGP shall have the option, at its sole discretion, of providing or arranging for such production financing. For the purposes of this section, the Purchase Intent Notification of a Retail Customer(s) shall specifically not require the procurement of a Purchase Order from such Retail Customer(s), but rather shall be an indication of interest by a Retail Customer that reasonably indicates its intent to purchase the number of units detailed in its Purchase Intent Notification in the event that such a number of units were to be in production and capable of delivery with a firm commitment date. In such instances where 4DGP elects to provide for such financing, Supplier shall be obligated to accept such financing, so long as the costs of such financing does not result in the Suppliers total variable Product costs for manufacturing and delivering the Product to Retail Customer(s) (including all product production costs, financing and factoring costs, transportation costs, sales commission and costs and Royalty payments due 4DGP, and other costs reasonably and typically incurred in the production and delivery of goods to Retail Customers) (the Total Product Cost) being greater than the Wholesale Price of the Products to be sold to the Retail Customer(s). For any instance in which 4DGP shall provide Production Financing in which the Wholesale Price exceeds the Total Product Cost and any and all costs of Production Financing provided by 4DGP, Supplier shall retain the difference between the Total Product Cost and the Wholesale Price. Product Financing and Production. Supplier shall, throughout the term of this Agreement, have immediately available inventory ready for shipment to Retail Customers in an amount not less than five thousand (5,000) Product units (the Base Inventory Amount). Should a Retail Customer(s) indicate in writing an intention and or desire (the Purchase Intent Notification) to purchase an amount of Product that shall exceed the Base Inventory Amount, Supplier shall, within fifteen (15) days of such notice, provide the necessary factory and production financing to begin production of the number of units that are reasonably required to meet the expected current and projected ongoing demand from such Retail Customers based upon its Purchase Intent Notification. In the event that Supplier is unable to provide such production financing, 4DGP shall have the option, at its sole discretion, of providing or arranging for such production financing. For the purposes of this section, the Purchase Intent Notification of a Retail Customer(s) shall specifically not require the procurement of a Purchase Order from such Retail Customer(s), but rather shall be an indication of interest by a Retail Customer that reasonably indicates its intent to purchase the number of units detailed in its Purchase Intent Notification in the event that such a number of units were to be in production and capable of delivery with a firm commitment date. In such instances where 4DGP elects to provide for such financing, Supplier shall be obligated to accept such financing, so long as the costs of such financing does not result in the Suppliers total variable Product costs for manufacturing and delivering the Product to Retail Customer(s) (including all product production costs, financing and factoring costs, transportation costs, sales commission and costs and Royalty payments due 4DGP, and other costs reasonably and typically incurred in the production and delivery of goods to Retail Customers) (the Total Product Cost) being greater than the Wholesale Price of the Products to be sold to the Retail Customer(s). For any instance in which 4DGP shall provide Production Financing in which the Wholesale Price exceeds the Total Product Cost and any and all costs of Production Financing provided by 4DGP, Supplier shall retain the difference between the Total Product Cost and the Wholesale Price.

46 The Future of Licensing Disturbing Trends: Disturbing Trends: Transfer fees Transfer fees Royalty Rates Approaching 20% Royalty Rates Approaching 20% Licensees Offering Equity plus Royalties Licensees Offering Equity plus Royalties Increased use of transfer fees Increased use of transfer fees Refusal to grant options to renew Refusal to grant options to renew Ownership issues for licensee developed material Ownership issues for licensee developed material Inflexibility in product submissions Inflexibility in product submissions Extraordinarily high guarantees paid as advances Extraordinarily high guarantees paid as advances


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