Frequently Asked Questions

What is the role of the Licensed Products Clause in a merchandise license contract?

The Licensed Products Clause plays a crucial role in a merchandise license contract. This clause provides a detailed description of the merchandise that is to be licensed. It includes specifics such as the materials, colors, and dimensions of the product. The purpose of this clause is to clearly define the scope of the merchandise rights granted to the licensee. The licensor, or the copyright holder, generally aims to limit the licensee's merchandising rights as much as possible. This is to ensure that the licensee does not overstep the boundaries of the agreement and misuse the copyrighted material. On the other hand, the licensee usually seeks the right of first refusal if the licensor decides to license the property to other product lines. This means that the licensee has the first opportunity to continue the agreement before the licensor offers it to others. The Licensed Products Clause is a critical component of the merchandise license contract as it helps to prevent potential disputes over what merchandise is covered under the agreement. It provides a clear understanding between the licensor and licensee about what products are included in the license, thereby reducing the risk of misunderstandings and potential legal disputes.