Thursday, July 25, 2013

Licensed Products II


Yesterday I wrote briefly about licensed products and the popular licensing agreements that some jewelry stores must meet in order to carry particular brands. This is only a small portion of licensing. Licensing can encompass product development, marketing and of course distribution. Anyone who purchased a licensed sports team baseball cap is holding a product that probably went through many steps before it got to the consumer.


All those t-shirt, caps and jackets had to go through a process whereby the licensor approved concepts, prototypes and final products for distribution. This can be a very expensive process for the licensee who sometimes foots the entire bill for development of a product. Usually the payoff for the licensee is the exclusive use, manufacturing, wholesaling and distribution of the product. They eventually make back their investment through sales of the finished product.


This can be a problem when others illegally use the brand or trademarked item without permission or any other agreement. We’ve all seen products sold on the internet that feature a well know sports team or TV show but may not have the necessary agreement in place. Basically they made a product then began selling it cutting out the owner of the intellectual property or those who have legal licensing agreements.


This is illegal and those who own the intellectual property do have rights. They can sue but sometimes the violators are not located in the US. Foreign countries do not always take a hard line against companies in their own country who are manufacturing products without a license. Also some are simply creative individuals who assemble individual, unique or one of a kind products for sale. It’s kind of hard to catch the “here today gone tomorrow” vendor. Either way you slice it, it makes it hard for those with licenses to compete.

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