Licensing in fashion industry

What is the meaning of licensing agreement? The verb to license is synonymous of give permission. A licensing agreement is an authorization to recitation authorize material granted by a party named Licensor to another party called Licen apprehend. This is a obligation in the midst of this two parties. The purpose of a licensing agreement is the reliable use of the licensees earmark, by the licensee, specified in the terms of the contract.We know two different types of licensing based in the use of common trademarks or famous trademarks. The Licensing in fashion industries is based in the use of famous brands such us Airman, Dolce & Cabana, Pravda and other mansion. A license under intellectual property has whatsoever(prenominal) components such us ?+ Term ?+ Auditing quality control monitoring ?+ Advertising and other costs connected to promotion ?+ Exclusivity ?+ Termination Renewal ?+ Infringement litigation The assignment of a license of decennium depends on specific cont ractual terms.The licensing agreement is only applicable for a particular geographic region, Just for a certain period of time or barely for a stage in the value chain. L 1. Advantages of a licensing agreement. When a society decides to put in place a licensing agreement must assess what are the benefits that will arise from the relationship between Licensor and Licensee. ?+ Advantages for Licensor as in all the contract is distinguished to have a return.A licensing agreement is useful to enlarge the societys geographic market to decentralized and differentiate the offer in order to reduce the business risks to pull up the cite, popularity and fame of her core brands, giving the same image of trademark in each store and in all points of sales financial benefits in remarry market due to positive feedback in licensees products and in secondary market because of royalties in licensees sales. ?+ Advantages for Licensee industrial benefits in order to increase the range of licensees products by making them to a greater extent recognizable by supporting low costs to rise trademark distinctiveness. . 3 terms of the contract. A successful brand licensing requires a planned dodge ?+ to determine core brands values in order to use them in the new category of products. ?+ to identify the level of differentiation desired. ?+ the achievement of leverage in the new category of products/services. . 4 several risks for the parties. One of the risks for licensor is due to the lack of monetary return Royalties. But the major risk is the loss of control regarding the uniqueness of the brand (the customer feel inaccessible the trademarks products). The licensees product are always not in line with the concept of trademark, so its value is blurred. The market wonder regarding the change of the trademarks strategic position that cause the disorientation of loyal costumer. The risk of lower quality of licensees products than the quality of licensees services, that bring consum ers to Judge products not good adequacy to be acquired. The high cost of license agreement. The impossibility to have enough time and business to recoup the investments. The risk of management of unsold goods and inventories.The licensor and the licensee must argue about the licensing agreement in order to decrease the risks. There are many clauses which the parties can establish to better define the terms of the contract in order to ameliorate the performance. The subject of the major clauses regards the fees beyond royalties, sub-licenses and the costs connected with promotion and advertising of trademarks products. The base of a good licensing agreement is the correct and sink information about the firm its value, positioning and the quality of its image. 1. Rules about Licensing agreement in ground forces. The Layman act 1125 the mistake caused by any people who in commerce uses any word, name, symbol or the combination of both similar to another recognizable trademark could be liable in a civic action. According to the Layman act 1064 a petition to cancel a registration of trademark may be changed at any time if the trademark is used by the registrant or with his permission so as to misrepresent the resource of goods or services in connection with which the mark is used. 3 1. 6 Licensing agreement in European law.Art 51 the rights of the owner of a community trademark must be revoked, the licensee is liable to misrepresent the public. Both in USA and in EX. the licensee run two typologies of risks ?+ common repairs ?+ cancellation As we said in the first part of the essay the licensor has an economic advantage to defend the power and recognition of the trademark but he has also a Juridical interest not to lose the registration of trademark. 4 1. 7 How to defend the trademark. The licensor has two possibilities to retain his trademark. ?+ Ex ante he can includes in the licensing agreement clauses about monitoring and inspecting the quality and the sta ndards of the services provided. Licensees purpose and licensees interest must be aliened. ?+ Ex post the licensor could act against the licensee if he did not respect the contract (like the quality of the service) or if he forged the trademark. 2. 1 The brand Licensing. Introduction. The license agreement relates to a right granted by a permit, if there is not this authorization the use of the mark is an illegal act.The license agreement must not be confused with a permit that relates to a license for a shorter period of time. The brand licensing deals with the granting of licenses by those who own the trademark to those who are interested (individuals or companies) to use them in the production of the products, over a period of time and in a defined territory. The brand licensing, especially in the fashion perseverance, is used to extend own brands to products of an entirely different nature.The licensor has the advantages such as being able to choose the products to be sold unde r license and authorize the sale of prototypes ND choose the best licensee. The benefits in a license agreement also concern the licensee, he may increase his market power by change the brand through brand recognition, increase its sales going to extend the range of audiences served, develop models and sell them in special shops. Enter into a contract brings benefits to both of the parties the licensee must paid periodically (monthly, semi-annually depending on terms of the contract signed by both parties) royalties to the licensor.And the licensee has a return on sales and investments with the ontogeny of licensor s trademark. Most of the major Italian fashion industries enters into licensing agreements for ancillary products, such as perfumes, sunglasses, watches (an face is that of D or Airman) or for the production of knitwear, such as Ralph Lauren. The fashion licensing is the most widespread among the license agreements between industries. As we said before it mostly concer ns the dissemination of products relating to health and beauty, accessories, clothing and household products. N some cases the brand owner decides to license the production, distribution and marketing of its core apparel categories, in other cases, he designer of the brand identifies specific categories that can be licensed by extending the brand into areas other than those of clothing. The licensor maintains strict control over the quality and the design. 2. 2 Airman case a practical example. We can see a practical example with the license agreement signed in 2011 between Airman and Ululation for the production and distribution of prescription frames and sunglasses.The Airman collection has decided not to renew the licensing agreement with Safari, expiring on December 31, 2012, in favor of Ululation. The licensing agreement with Ululation, anticipated with the signing of a letter of intent basis, in November 2011, for a ten-year exclusive license agreement for the design, producti on and distribution worldwide for collections of sunglasses and prescription eye-wear under the Giorgio Airman, Emporium Airman and a / X from 2013.After ten years of intense collaboration with Safari the Airman group decides not to renew the contract, a serious loss in the short period (150-200 one million million euros) for Safely that is certain to recover it in the long term thanks to licensing agreements with Polo Ralph Lauren ND Cline. Andrea Gouger, CEO of Ululation says Back in 1988 Giorgio Airman and Ululation started a very successful Journey together together we changed the world of eyeglasses which, previously perceived as mere functional instruments, evolved into aware and into indispensable fashion accessories.Airman is eponymic of excellence of Made in Italy and represents values which are perfectly in line with ours. We are therefore excited to work together again, in a partnership that will for sure be mutually beneficial, The market had already understood the impe nding ivories between Airman and Safely, favoring an agreement with Ululation who previously collaborated with the company from 1988 to 2003, a long collaboration that led to explode the sunglasses and eyeglasses sector, making the glasses a real fashion accessory.The non-renewal of the license agreement between Airman and Ululation in 2003 was a surprise analyzing the close cooperation and sharing of innovative ideas between the two entrepreneurs. 2. 3 Michael Koru case a practical example. With this example we may analyze the key parts of the license agreement, between Michael Koru and P. R. China, which can often be considered common to all licensing agreements in the world of fashion industry regarding the manufacturing of the products.