What is a product license?
A product licence grants you the right to use generally recognised trademarks, images, films or comic strip characters in your products, publications or campaigns. The licensor retains ownership of the copyright while the licensee (the customer) purchases the right to use the trademark in products and campaigns for an agreed period.
The benefits of a product license
Using a well-known character will generate immediate market recognition for your product. This will increase product sales and profits. Your product will reach new target groups and have a strong competitive edge over similar products on the market. The chance to co-operate with other licence holders is a further advantage that will open up new marketing channels.
What we require from a license?
To become a license you will need to provide a business plan including a wide distribution network and products with high quality which can live up to the brand values. From our professional knowledge of local retail markets, we co-ordinate branded retail campaigns and fairs around the world together with our international partners.
Happy Louis Characters supports clients throughout the approval process of licensed products, with professional design advice that facilitates and speeds up the approval process. We can also supply clients design services through our inhouse designers and external partners.
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How do I proceed with my application?
Once all the conditions of the agreement have been examined, prospective licence holders will be sent a draft contract. The draft contract will specify the royalties payable, a distinct market area, a product description and a guarantee, the size of which will depend on projected sales during first two years.
Once the draft contract has been approved, the finalised contract will be sent for the licensee to sign in duplicate. Both signed copies should be returned for the licensor to sign, after which both parties will receive one original copy of the signed contract.
After the contract has been signed, the licence holder will receive the graphics that have been licenced for use. Product design and development can then begin. In order to ensure that the licensed material has been used in an appropriate manner, license holders must send product descriptions to the licensor for approval before production begins. The official copyright symbol must always be visible whatever the medium – a product, an advertisement or campaign material.
Licensing agreements are usually made for a period of two years. At the end of this period, licence holders may enter into negotiations to continue the agreement or to launch a clearance sale of any remaining products.
What will it cost?
The licence is royalty-based, that is, you pay an agreed percentage of your sales income to the licensor for the right to use the trademark. The amount payable will vary depending on the product group and area of use. If you would like to use the Happy Louis in an advertisement or other sales promotion, the fee will be set in proportion to your media and printing costs.
Once the contract has been signed, you will have to pay advance royalties in the form of a guarantee. You will report your sales figures every quarter. If the royalties to be paid exceed the guarantee, you will be invoiced for the excess.