BYORK has currently licensees for women’s apparel. BYORK have distributors in the U.S. BYORK is being approached from licensees, and distributors in North America, South America and Europe, but not yet sighs of any other licensee agreement due to the Company focus on building a broad base foundation structure for brand licensee operation . BYORK licensees approached include baby and kids apparel, belts, eyewear, footwear, underwear, bridal, handbags, jewelry, leather wear, swimwear, and watches, thanks to the creative influence of Howard Sheldon Parker, the first generation of founders BYORK, who is guiding everything from the foundation of the BYORK licensing world. The latest addition to the BYORK approached licensee family are new innovative free standing BYORK boutiques with a specific focus on our complete range of products for both men and women including intimate apparel and the full line of body care collections. Customers will have a chance for the first time to discover the full line of BYORK Sportswear available to them. Additionally premium styles exclusive to the BYORK boutique stores will be displayed. Each licensee will evolve to continually reflect the BYORK image.
All licensees will be unsurpassed in offering style and quality to customers around the globe, contributing to make BYORK one of the best selling brands in the world. BYORK licensees will deliver products and services of uncompromised quality and integrity consistent with the BYORK brand image.
Investors’ Legal Brief – Licensing In the Apparel Industry
It is now almost a truism that adding a designer name to apparel or other product adds value to the product – which is translated into being able to command a higher price. Thus licensing of designer names and other popular trademarks becomes more and more important. Whether you are the licensor or the licensee, the following are some of the primary issues that should be considered and addressed in every licensing agreement.
- Licensor’s Control Over Design
Licensor must have the legal right to closely control the design of the licensed product. Lack of such control could jeopardize or weaken his trademark. Licensor should also have the right to strict control over the quality of the licensed products being manufactured by license, as well as how licensee displays and uses the licensed trademark. In practice, licensor’s control over design may vary from almost total to almost nil, depending upon the licensor and the product being licensed.
- Distribution Channels
Appropriate channels of distribution are crucial to most licensors and must be carefully spelled out in the license agreement. This is particularly important in the case of designer names or trademarks associated with ‘upper end” merchandise, the sale of which to discounters or even mass merchandisers could be highly damaging to the trademark.
Most license agreements provide for payment of royalties on a quarterly basis, accompanied by a detailed statement reflecting sales, credits, discounts, etc. the agreement should also give licensor a right of inspection of licensee’s books and records (to be exercised a limited number of times) to verify the accuracy of licensee’s reports. While royalties are normally paid on net sales (i.e., net of discounts allowances, etc.), what about uncollectible accounts? Licensee can argue with at least equal validity that if a sale has not been collected, he has lost more than the licensor and his loss should not be increased by his having to pay a royalty. This one can go either way, depending upon the flexibility and bargaining power of the respective parties. Guaranteed minimum royalties should always be provided for. One issue that is not so clear: if the sales that would support the guaranteed minimum royalties were not reached, can the licensee nevertheless keep the license by paying the minimum royalties? Licensee may argue that by paying the minimum royalties, he has fulfilled his commitment. Licensor may not be interested merely in the money, however, but may also be seeking a wide distribution of the licensed products bearing his trademark. How this issue is resolved in the licensed agreement really depends on the relative value placed by the licensor on royalties vs. distribution.
- Competitive Products
The license agreement should provide that licensee will not manufacture and sell products under any competitive trademark. A closer question involves whether licensee may sell similar products to the licensed products if they did not bear licensor’s trademark. This issue should be resolved in accordance with the business exigencies applicable to the particular trademark and product.
- Copyright Protection
License agreement commonly provides that any copyrights for styles or patterns created by the licensee and used on the licensed products are the property of the licensor. But if the copyright is the result of designs or patterns created by licensee (and not specifically identifiable to the trademark or trademarks products), licensee can validly contend that he should retain ownership of the copyright, as well as any damages recovered if the copyright is infringed.
- Option to Renew
It is common to give the licensee the option to renew the license agreement for additional terms provided he has fulfilled all of his obligations. One issue that arises: if licensee has paid the minimum royalties but has not achieved the desired levels of sales, should be permitted to renew? If the licensee will not only pay guaranteed minimums but will achieve specified minimum sales levels, the problem will be academic. In some cases however, licensor may not be satisfied with licensee’s performance even if the specified minimum sales have been achieved. If that possibility is anticipated then an option to renew may be inappropriate.
- Right to Sublicense or Assign
Since licensor is contracting with a known licensee, and presumably has confidence in that licensee’s ability to manufacture a quality product and maintain a satisfactory volume of sales, any right of licensee to sublicense or assign should require licensor’s consent. Similarly, a change in the effective management or control of the license should also give licensor the right to terminate.
Since most of the obligations under a license agreement are imposed on licensee, termination prior to the end of the specified term will usually be made by the licensor in the event of licensee’s failure to reach guaranteed minimums, pay appropriate royalties or otherwise breach the contract. As to those breaches that are curable (such as failure to pay royalties) provision should be made to give the licensee a reasonable opportunity to cure before the harsh penalty of termination can become effective. Upon termination based on material breach of the contract by licensee, licensor should be entitled to recover any unpaid royalties at least through the date of termination plus any other provable damages. Licensor would also be well advised to provide for payment of the guaranteed minimum royalties licensor may receive from a new licensee for the licensed products during the remainder of the original term. The termination provision should also provide for the sell-off of existing inventory, either under the same terms as if the license had continued to the end of the designated term, or for a shorter sell-off period than which would have been allowed had there not been an early termination.