Influencer Production (Agency Affiliated)_Merchandising Rights License Agreement

[Influencer Production (Agency Affiliated) Merchandising Rights License Agreement]

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★This is a Merchandising Rights License Agreement that an influencer (C) belonging to a management agency (A) enters into with another company (collaboration partner) that manufactures and sells a product when producing the product.
→The contracting parties are the influencer's agency (Party A) and the corporation or individual seeking to commercialize the influencer's work (Party B).

*If you are entering into a contract with a freelance influencer (not affiliated with an agency), please use the following contract template.

Influencer Produced Merchandise License Agreement https://akiraccyo.thebase.in/items/57147980

★Products produced by influencers can be divided into the following two cases. This "Merchandising Rights License Agreement" is for use in case (1).

(1) Cases where another company (collaboration partner) sells the product as its own.
Influencers grant merchandising rights to other companies (collaborators).

(2) Cases where an influencer sells the product as their own.
(This is when an influencer runs their own branded business.)
Regarding the manufacturing of our products, we can also outsource the manufacturing by concluding an "OEM contract" with another company.

*Although "merchandising rights" is not a legal term, it has gained some acceptance as a term, so we use the term "merchandising rights".
(The details are set out in Article 3 of the contract template.)

Reference (our firm's website)
Influencer-related transaction design and contract creation
https://keiyaku.info/contents05.html
OEM Agreement
http://keiyaku.info/OEM01.html
Fashion business and apparel industry contracts
http://keiyaku.info/fashion01.html

★ Clauses included in the "Influencer Production (Agency Affiliated) Merchandising Rights License Agreement"
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Article 1 (Definition)

This section defines the terms used in this agreement.

No. 1 “Portraits, etc.”
→If you do not wish to use the portrait of C, please delete it.
Issue 2: "This Design"
→In the event that there are a large number of designs or the explanations are complicated, we have provided the details in a separate document.
→ Change "Design based on drawings/images" to "Design based on images" etc. as necessary.
→If the "trademark" or "design" that has been applied for or registered with the Japan Patent Office is not included, please delete the sentence, "It also includes the trademark (hereinafter referred to as "this trademark") and design (hereinafter referred to as "this design") that have been applied for or registered with the Japan Patent Office as shown in the attached document."
No. 3 "Designated Items"
Issue 4: Sales Area
→Please change "the whole world, including Japan" to "Japan and the Republic of Korea" if necessary.
No. 5 “Manufacturing Area”
If necessary, please change "the whole world, including Japan" to "Japan and the Republic of Korea."
Issue 6: Contract Year

Article 2 (Purpose)

Clause 1: The purpose of this Agreement is to stipulate the basic conditions for Party B to manufacture and sell products produced by Influencer (Party C).

Section 2: Product planning will be carried out in the following manner.
(1) The plan is jointly planned by influencer (C) and influencer (B).
(2) Influencer (C) plans the event and Party B approves it.

Article 3 (Licensing and Restrictions on Merchandising Rights)

Section 1: This section contains provisions regarding the content of the merchandising rights granted to Party B by the agency (Party A) to which the influencer (Party C) belongs.

→The details of the merchandising rights are as follows:
(1) The right to jointly plan with C the designated items of the Products that use the Portraits, etc. and the Design in accordance with the provisions of Article 2, Paragraph 2.
(2) The right to manufacture the products planned pursuant to the provisions of the preceding paragraph in the manufacturing area.
(3) The right to sell the Products manufactured pursuant to the provisions of the preceding paragraph within the sales area: If you do not use the portrait, etc., please change “Portrait, etc. and the Design” to “The Design.”

Section 2: This section stipulates that the merchandising rights granted by Influencer (C) to Party B are exclusive.

Section 3: Leaves room for exceptions to monopoly.

Article 4 (Representations and Warranties)

This provision states that the influencer's agency (Party A) represents and warrants to Party B that it has the authority to enter into this Agreement on behalf of Party C.
→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 is a provision favorable to Party A. (Please delete it if unnecessary.)

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.

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): Party A may collect compensation for the use of images, designs, etc. in advertising, publicity, sales promotion materials, and premium goods, depending on the content. This provision confirms this. (Please delete if unnecessary.)

Article 7 (Party A's Display)

These are regulations regarding the display of information indicating that a product is planned, manufactured, and sold with the permission of the agency (A) to which the influencer (C) belongs.

Article 8 (Compensation)

These are regulations regarding compensation (royalties).
The agreement includes a down payment (initial royalty), a minimum royalty of a specified amount, and a running royalty calculated by multiplying sales by a percentage.

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) is set, and if the running royalty amount exceeds that amount, the total running royalty amount is paid, and if the total running royalty amount does not exceed the minimum royalty amount, the minimum royalty amount is paid.

Article 9 (Submission of Royalty Report)

In order for the licensee (B) to gain the trust of the influencer/licensor (A), the licensee (B) must submit reports that serve as the basis for calculating running royalties and make the underlying books available for audit at any time.

Article 10 (Non-refund of vested interests)

Article 11 (Reporting obligation)

Article 12 (Trademark and design registration)

As the agency/licensor (A) of the influencer (C), it is considered unacceptable for even a portion of the intellectual property rights related to the "Design in Question" to be attributed to B, and therefore the agency/licensor (A) will establish measures to have the intellectual property rights attributed to it or at least to have them under its control.

→ Examples of provisions in favor of the licensee (Party B) are also provided.

Article 13 (Infringement of rights by third parties)

Article 14 (Disclaimer)

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)

It also provides for the right to terminate the contract and makes careful provisions regarding claims for damages.
Under the Civil Code, if the other party fails to fulfill their contractual obligations, the right to terminate arises (statutory right to terminate, Civil Code Articles 541 and 543). In addition to the statutory right to terminate, this clause adds grounds for termination by agreement (items 1 to 13) and also provides that the contract can be terminated without notice.

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 does not perform the work in violation of this contract, this will be Party B's default on its obligations. In this case, 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 such 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 Products after Termination of Contract)

This is a provision regarding the handling of products that the licensee (Party B) has in stock at the end of the contract period.

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

Article 22 (Governing Law, Consultations, and Jurisdiction)

【Attachment】

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