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Licensing 101: A Paradox of Piracy for Licensing Business Part 4

20 Mar 2015

20 March 2015

Welcome back – in the earlier sections on counterfeit, I spoke about the ‘piracy paradox’ and the reasons a licensor needs to combat piracy and the best way to do it, which is to offer a licensed alternative and collaborate closely with your key retailers to ensure they are fully aware of the official licensees.

For sure, once an official licensee is signed up (and has paid an advance on the minimum guarantee) that licensee will quickly begin agitating for the market to be cleared and will usually help (instead of just complain) as long as the licensor comes across as responsive and committed. By “help” what I mean, is the licensee will provide documentation and information about where counterfeit product is being sold, or produced, or imported.  Generally speaking, the licensor should not empower the licensee to take action themselves.  It is important for the Licensor to always remain in front of all anti-piracy efforts – making all decisions and enforcing.  (Most standard licensing agreements correctly reserve for the licensor the sole right to determine if and when to take action against a particular perceived infringement.)

Well before this point, and as part of the licensors’ planning efforts to launch and support a global licensing program, the licensor will have needed to make strategic efforts to secure various trademarks for its IP pretty much in all markets where it intends to license.  I am not a lawyer, so I will only touch briefly on this as a pre-requisite, and all licensors should take their own advice on the issue.

More to come on this topic; stay tuned.