Attire Accessories - Mar/Apr 2019 (Issue 75)

102 PARTNERSHIP POWER Dids Macdonald explains how to grow your business through licensing Do you have a new design, product or service that you could licence to a manufacturer or a much larger, more established brand in a deal that could benefit you both? For example, a company that has the marketing and sales capacity through which your product can reach new markets or a manufacturing capability through which you could fast track more production and, therefore, sales. If so, it is maybe time to find out more about licensing and what is involved. When you create a new design or product, you create intellectual property rights so long as you meet the criteria for copyright and design right, which are created automatically. You can, of course, register your design rights officially at the Intellectual Property Office. It’s the same with the name you trade under – if you meet the criteria, you can protect your name with a registered trademark. This is a wise move, whether you are licensing or not, as what you build up under your own name or brand is your brand capital – a precious commodity! An IP licensing agreement is created between an IP rights owner and someone who you authorise to use those IP rights. They are called a licensee, and you would be the licensor. This is in exchange for revenue, which is referred to as a fee or a royalty. The most important part of any licensing relationship is what is in the small print, parameters and terms that are fair and to which you both agree to work under. A successful licensing relationship should be viewed as a long-term plan from the basis of mutual respect, with the small print tied up legally to protect both parties. ACID’s dos, don’ts and essential tips for creating a successful licensing relationship Have you established what IP rights you own? Before entering into a licensing agreement with a third party, a simple IP Health Check will help to focus on any patents, trademark or design registrations that need to be in place prior to a licensing venture. ACID can help! Consider key terms to enable a safe and productive commercial basis from which you can both work together profitably. The key elements of a sound licence royalty agreement are that it contains provisions, not only to work effectively and profitably together but also provisions in the event that things do not work out for whatever reason. Tempting though it is, never use someone else’s agreements – terms that might suit one relationship could be a disaster for another. ACID has produced an industry-standard licence royalty agreement after consultation with designers and manufacturers. It is a standard set of basic conditions to which additional specific clauses, relevant to a set of circumstances, can be added and included if required. It is a reasonable, professional foundation from which two parties can work together in a licence/royalty relationship. Not reading the small print in any agreement only makes lawyers rich. Understand the difference in various licensing terms. By licensing your rights, this means that you retain ownership and can, through a licence agreement, impose certain restrictions. Be sure to understand the various licensing terms and what they mean. • An exclusive licence becomes the exclusive right of the licensee, and therefore you cannot use the design during the licensing term. • A sole licence allows both you and the licensee to use the designs. • A non-exclusive licence means that the licensee has the right to use the designs but cannot take action to prevent anyone else using