The Royalty Agreement For Use Of Trademark is essential when a trademark owner wishes to monetize their intellectual property by allowing others to use it while maintaining control over their brand. This document, governed by U.S. trademark law, establishes the financial relationship between parties, specifies usage rights, sets quality standards, and protects the trademark's integrity. It's particularly crucial in franchise operations, merchandising, and brand licensing scenarios, where proper documentation of rights and obligations is essential for both legal compliance and business success.
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1. Parties: Identification of licensor and licensee, including full legal names and addresses
2. Background: Context of the agreement, ownership of trademark, and purpose of the licensing arrangement
3. Definitions: Key terms used throughout the agreement including 'Licensed Marks', 'Territory', 'Net Sales', etc.
4. Grant of License: Scope of rights granted, including territory, exclusivity, and permitted uses
5. Royalty Payments: Payment terms, calculation methods, reporting requirements, and payment schedule
6. Quality Control: Standards for use of trademark and licensor's right to inspect and approve
7. Term and Termination: Duration of agreement and circumstances for termination
1. Sublicensing Rights: Terms and conditions under which the licensee may grant sublicenses to third parties
2. Minimum Guarantees: Specifications for minimum royalty payments or sales requirements to maintain the license
3. Marketing Obligations: Requirements and guidelines for promoting licensed products or services
4. Non-Compete: Restrictions on competing products or services and related limitations
1. Schedule A - Licensed Marks: Detailed list and images of licensed trademarks including registration numbers
2. Schedule B - Products/Services: Comprehensive list of products or services covered by the license
3. Schedule C - Territory: Detailed description of geographic territory where license applies
4. Schedule D - Royalty Rates: Detailed breakdown of royalty calculations and rates for different products/services
5. Schedule E - Quality Standards: Specific quality requirements and guidelines for trademark usage
6. Schedule F - Reporting Template: Standardized format for royalty reports and sales documentation
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