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Design, Painting, Image Commercialization Rights Licensing Agreement

[Design, Artwork and Image Commercialization Rights License Agreement]

★ This is a template for an agreement when a third party (corporation or client) uses designs based on existing designs, paintings, or images for commercialization.

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Upon the completion of the transaction, the contract file content (zip format) will be available for download.

If you double-click the downloaded file, a Word format file will appear.

Notes and comments are included. You may customize freely.

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※ Change “designs, paintings, and images” to “designs” only as needed.

“Commercialization Rights” is not a legal term, but it is a commonly understood term, so we use it (its meaning is described in the purpose clause).

★ Clauses included in the “Design, Painting, and Image Commercialization Rights License Agreement”

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Article 1 (Purpose)

※ If necessary, change “design based on paintings/images” to “design based on images,” or simply “design.”

In anticipation of many designs or complex explanations, this document treats the details and specifications as being described in a separate appendix.

Article 2 (Definitions)

Please modify the definitions of terms according to the contract contents.

Item 1:

※ If necessary, change “design based on paintings/images” to “design based on images,” or simply “design.”

※ If the patents and designs filed or registered with the Patent Office are not included, delete the sentence: “In addition, the patents and designs that have been filed or registered with the Patent Office (hereinafter ‘this trademark’) and design rights (hereinafter ‘this design’) shown on the appendix are also included.”

Article 3, Article 4: “World-wide including Japan” should be modified to “Japan and the Republic of Korea” as needed.

Article 3 (Representations and Warranties)

Paragraph 1: This provision represents and warrants that the grantor (A) has the authority to enter into this contract with the grantee (B).

Paragraph 2: This provision represents and warrants that the design does not infringe the copyright of any third party.

Paragraph 3: This provision represents and warrants that the design does not infringe third-party trademark rights or design rights. (Delete if unnecessary.)

Article 4 (Grant of rights, limitations, etc.)

Paragraph 1 (Details of the grant): It clearly states that the grantor gives rights to the grantee.

Paragraph 2 (Exclusivity vs non-exclusivity): It specifies whether the rights are exclusive or non-exclusive.

Paragraph 3 (Exceptions): Leaves room for possible exceptions to exclusivity.

Article 5 (Manufacturing and Quality Control)

Paragraphs 1–3: If the products and the designs used on those products are of poor quality, the credibility and value of the “design” will be damaged, which is a problem for the grantor and could affect the grantee’s credibility as well.

Therefore, supervisory and approval procedures are established.

Article 6 (Sales Promotion, etc.)

Paragraph 2 (Approval): For advertising, publicity, and promotional materials, it is common for the grantor to supervise and approve the designs used, for the same reasons as products.

Paragraph 3 (Advertising Rights, Sponsorship Rights):

Depending on the content, the grantor may charge consideration for the use of designs in advertising, publicity, promotional materials, or premium goods.

This provision confirms that. (If unnecessary, delete and treat the current Paragraph 4 as Paragraph 3.)

Article 7 (Copyright Notice)

If the designs, paintings, or images are copyrighted works, it is usual to include the prescribed copyright notice.

However, if the grantor (the party granting commercialization rights) approves, this notice may be omitted.

Article 8 (Consideration)

Provisions regarding royalties.

In this contract, a combination of an upfront fee (initial royalty),

a minimum guaranteed royalty, and

running royalties calculated as a rate of sales are used.

★ Methods of calculating royalties can vary as follows.

① A lump sum paid upfront (paid-up royalty)

② A one-time payment at contract signing (initial royalty) plus a running royalty calculated as a fixed rate on sales

③ Payment of only running royalties

④ A specified annual minimum guaranteed amount (minimum royalty); if running royalties exceed this amount, pay the total running royalties; if running royalties do not exceed the minimum, pay the minimum

★ In Paragraph 1, the consideration may also be described as “Amount of money ○○○○○ yen (including consumption tax)” or may be described as “Amount of money ○○○○○ yen (excluding consumption tax) plus the consumption tax amount.”

★ In Paragraph 1, another example where the upfront royalty is paid in multiple installments is also described.

Article 9 (Submission of Royalty Reports)

As the Licensee, to earn the trust of the Licensor, you should submit reports that form the basis for calculating running royalties and

keep the underlying books and records accessible for audit at any time.

Article 10 (Non-Refundability of Earned Funds)

Article 11 (Duty to Report)

Article 12 (Registration of Trademarks and Designs)

As the Licensor, since it is not considered acceptable to grant ownership of IP rights related to the “Design” to the Grantee,

we will either retain them or arrange measures to keep them under our control.

→ If provisions favoring the Grantee are permissible, the following provisions may be contemplated.

Article 13 (Infringement by a Third Party)

Article 14 (Disclaimer)

Disclaimer

As for liability, while considering warranties, the Licensor clarifies that it is exempt from liability for problems arising from the Grantee’s actions beyond the granted rights.

Article 15 (Prohibition on Transfer of Rights)

Article 16 (Confidentiality)

Provisions regarding confidentiality.

Article 17 (Termination of Contract)

Article 18 (Damages, Force Majeure Disclaimers)

Paragraph 1: It provides for liability for damages (a typical provision).

★ Alternate Example 1 for Paragraph 1: a provision limiting the scope of damages for both parties.

★ Alternate Example 2 for Paragraph 1: a provision imposing heavier damages only on the Grantee.

→ “Opportunistic profits” means the profits that would have been earned if the contract had been performed according to its terms.

→ “Opportunity profits” include both “lost profits” and expenses that would not have occurred if performance had been fulfilled.

→ “Lost profits”

For example, if the Grantee breaches and does not perform, this is a breach of duty, and the profits the Licensor would have earned are the lost profits.

→ “Expenses that would not have occurred if performance had been fulfilled”

If the Grantee’s non-performance forced the Licensor to incur expenses, those expenses are “expenses that would not have occurred if performance had been fulfilled.”

【Scope of Damages: Civil Code Provisions】

If the following Civil Code Article 416 would render damages provision excessive, the contract will limit the scope of damages.

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Civil Code Article 416 (Scope of Damages)

1. A claim for damages for non-performance of an obligation is intended to compensate for damages that would normally occur.

2. Even if there are special circumstances, if the debtor could foresee or should have foreseen them, the claimant may claim compensation for those damages.

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Paragraph 2: Provisions on force majeure disclaimers.

Article 19 (Validity Period)

Article 20 (Post-Term Handling of the Product)

Article 21 (Exclusion of Organized Crime Groups and Anti-Social Forces)

Article 22 (Governing Law, Consultation, Exclusive Jurisdiction)

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★ Notes and comments included. The Word file format is freely customizable.

Seller information

Akiraccyo

Japan

Identity confirmed

NDA concluded

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