Design, painting, and image merchandising rights license agreement (agency affiliation)

[Design, painting, and image merchandising rights license agreement (agency affiliation)]

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★This is a contract whereby a management agency, production company, art gallery, etc. (Party A) grants permission to a client (Party B) to commercialize designs, paintings, and images related to talents, artists, etc. (Party C) affiliated with Party A.
*Please change "talent" to "artist" etc. as necessary.

"Merchandising rights" is not a legal term, but it is a recognized term, so we use the term "merchandising rights." (The meaning is stated in the purpose clause.)

*This Agreement is based on the premise that Party A has entered into a management agreement with Party C and that Party A has the authority to enter into this Agreement with Party A (management agency, production company, art gallery, etc.) on behalf of Party C.

*When entering into a contract with a freelance talent or artist (not affiliated with an agency), please use the following contract template.

Design, painting, and image merchandising rights license agreement https://akiraccyo.thebase.in/items/2689680

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※For reference (our office website)
Merchandising rights license agreement, merchandising rights usage agreement
http://keiyaku.info/licence01.html
Contract law and management for design, art and creative fields
https://keiyaku.info/design01.html
Art Business: Artist and Gallery Contract
https://keiyaku.info/art01.html
Contracts for entertainment agencies, talents, models, and musicians
http://keiyaku.info/e_production01.html
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★ Clauses included in the "Design, Painting, and Image Merchandising Rights License Agreement (Agency Affiliation)"
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Article 1 (Purpose)

In case there are a large number of "designs" or the explanation is complicated, we have provided the details in an "attachment."

*Please change the word "design" in the "Designs listed in the attached sheet for Category C" to "images," "paintings," "characters," "avatars," etc. as necessary.

Article 2 (Definition)

Please change the definition of each term according to the content of the contract.

No. 1: If the "trademark" or "design" that has been applied for or registered with the Japan Patent Office is not included, please delete the following: "It also includes the trademark (hereinafter referred to as "the trademark") and design right (hereinafter referred to as "the design") that have been applied for or registered with the Japan Patent Office as shown in the attached document."

Items 3 and 4: Please change "the whole world, including Japan" to "Japan and the Republic of Korea" if necessary.

Article 3 (Representations and Warranties)

Section 1: This provision represents and warrants to the client (Party B) that the management agency, production company, art gallery, etc. (Party A) has the authority to enter into this agreement on behalf of the talents and artists (Party C) affiliated with Party A.
→The premise is that Person C belongs to Person A, i.e. Person A has entered into a management contract with Person C.
Clause 2: This provision states that Party A represents and warrants to Party B that the Design in question does not infringe the copyright of any third party.
Section 3: Party A represents and warrants to Party B that the Design in question does not infringe on any trademark or design rights of any third party. (Please delete if unnecessary.)

Article 4 (Licenses and Restrictions on Rights, etc.)

Section 1 (Regarding the content of the license): This section clearly states that Party A grants Party B the rights.

Section 2 (Exclusive/Non-Exclusive): Clearly states whether the rights are exclusive or non-exclusive.

Section 3 (Regarding exceptions): Leaves room for exceptions to monopoly.

Article 5 (Manufacturing/Quality Control)

Paragraphs 1 to 3: If the product or the design used in that product is of poor quality, it will damage the credibility and value of the "Design in question," which will be a problem for Party A and will also affect Party B's credibility. Therefore, we have established supervision and approval procedures.

Section 4 (Regarding copyright ownership): Even if Party B makes modifications to the design or creates a new work during the commercialization process, Party A needs to clarify the ownership of the copyright to the design (including cases where it becomes a secondary work), and therefore this provision has been included.

Section 5: Provisions regarding the delivery of the original drawings, manuscripts, etc. of the Design to Party B. (Please delete if unnecessary.)

Article 6 (Sales Promotion, etc.)

Section 2 (Regarding Approval): For the same reasons as in the case of products, Party A usually supervises and approves the design used in advertising, publicity, and sales promotion materials.

Section 3 (Advertising Rights, Sponsorship Rights):
Depending on the content, Party A may also charge a fee for the use of the design in advertising, publicity, sales promotion materials, or premium goods.
This is a provision that confirms this. (If it is unnecessary, please delete it and make the current paragraph 4 paragraph 3.)

Article 7 (Copyright Notice)

If the design or image is a copyrighted work, it is common to display the required copyright notice.
However, if Party A (the party granting permission to commercialize the product) approves, the display may be omitted.

Article 8 (Compensation)

These are regulations regarding compensation (royalties).

This contract requires an initial royalty,
It is a combination of a specified minimum guaranteed royalty (minimum royalty) and a running royalty calculated by multiplying sales by a rate.

There are various methods for determining (calculating) royalties, as follows:
①Pay a fixed amount in one lump sum (paid-up royalties)
② A method that combines a fixed lump sum payment (initial royalty) at the time of signing the contract with a running royalty payment calculated by multiplying the sales amount of the product by a fixed rate.
3. Paying only running royalties
④ A minimum annual compensation amount (minimum royalty) will be set, and if the running royalty amount exceeds that amount, the total running royalty amount will be
If the total running royalties do not exceed the minimum royalty amount, the minimum royalty amount will be paid.

★In paragraph 1, the description of the compensation: "○○○○○ yen (including consumption tax)" can also be changed to "○○○○○ yen (excluding consumption tax) and the total amount equivalent to consumption tax."

★In paragraph 1, the price stated as "○○○○○ yen (consumption tax added separately)" can also be written as "○○○○○ yen (consumption tax included)."

An alternative example to paragraph 1 is also provided for cases where initial royalties are paid in multiple installments.

Article 9 (Submission of Royalty Report)

In order for Party B (the licensee) to gain the trust of Party A (the licensor), Party B must submit a report that serves as the basis for calculating the running royalties, and
The underlying books must be auditable at all times.

Article 10 (Non-refund of vested interests)

Article 11 (Reporting obligation)

Article 12 (Trademark and design registration)

As Party A (the licensor), it is considered unacceptable for any part of the intellectual property rights relating to the "Design" to be attributed to Party B.
Establish a mechanism to make it yours, or at least under your control.

→ Examples of provisions that favor Party B (the employer) are also provided.

Article 13 (Infringement of rights by third parties)

Article 14 (Disclaimer)

Regarding exemption from liability, Party A's position is that it is balanced with the guarantee, but we would like to confirm that Party A will be exempt from liability for any problems arising from Party B's actions other than those relating to the rights themselves granted to Party B.

Article 15 (Prohibition of Transfer of Rights)

Article 16 (Obligation to maintain confidentiality)
This is a provision regarding confidentiality obligations.

Article 17 (Termination of Contract)

Article 18 (Compensation for damages, exemption from force majeure)
Section 1: Stipulates liability for damages. (This is a typical example of a provision.)

★Alternative example 1 of paragraph 1: An example of a provision limiting the scope of damages to be awarded by both parties is also provided.
★Alternative example 2 of paragraph 1: We also provide an example of a provision in which only Party B is obligated to pay a heavier amount of damages.

→ "Profit from performance" refers to the profit that would have been earned if the contract had been performed as per the contract.
→ "Profit from fulfillment" includes both "lost profits" and "expenses that would not have been incurred if the contract had been fulfilled."
→ "Lost profits"
For example, if Party B fails to perform the work in violation of this contract, this will be Party B's default on its obligations. The profits Party A would have earned if Party B had performed the work are called lost profits.
→ "Expenses that would not have occurred if the performance had been carried out"
If Party A is forced to make expenditures because Party B has not fulfilled the contract as per the agreement, then Party A has incurred "expenses that would not have been incurred if the contract had been fulfilled."

[Scope of damages: Civil Code provisions]
If the scope of damages stipulated in the following article (Article 416 of the Civil Code) is excessive, the scope of liability for damages will be limited by contract.
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Civil Code Article 416 (Scope of damages)
1. The purpose of a claim for damages for breach of obligation is to obtain compensation for the damages that would normally arise from the breach.
2. Even if damage has arisen due to special circumstances, the creditor may claim compensation if the parties foresaw or could have foreseen those circumstances.
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Section 2: Provides for exemption from liability for force majeure.

Article 19 (Validity Period)

Article 20 (Handling of the Products after the Contract Ends)

Article 21 (Exclusion of anti-social forces such as organized crime groups)

Article 22 (Governing Law, Consultations, and Jurisdiction)

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