WHO IS THE LICENSOR?
Some merchandise licensing agents insist on being identified as the “licensor” in their artists’license agreements. There are several reasons why this is not an advisable practice, either for the artist or the agent.
- Identifying the agent as the “licensor” is legally incorrect. Only the person who owns copyright or trademark rights in intellectual property can grant a license to use that property. In almost all cases, the only owner of rights in the property being licensed will be the artist. Since the agent has no ownership interest in the property, any purported grant of a license by the agent will be a nullity, along the same lines as the proverbial deed from the man on the street transferring title to the Brooklyn Bridge.
- LIf the agent is named as the licensor, the licensee will be able to sue the agent if the artist fails to make good on any of these obligations.icense agreements often impose obligations on the licensor. For example, if any of the licensed properties becomes subject to a claim of infringement, the licensor is usually obligated to indemnify the licensee for all costs that the licensee incurs in connection with that claim. The licensor may also be obligated to develop a minimum number of new properties each year during the term of the license, or may be obligated to participate in certain marketing efforts. If the agent is named as the licensor, the licensee will be able to sue the agent if the artist fails to make good on any of these obligations.
- The licensor usually has the right to approve or disapprove product samples. If the agent is named as the licensor, the agent could approve samples without input from the artist. However, if this occurs and the artist is not satisfied with the samples, the artist could claim that the agent acted in bad faith.
- If the artist terminates the agency relationship, the artist will have to seek an assignment of all license agreements from the agent. The agent may not consent to executing an assignment, and, in any case, the assignment process simply creates more paperwork for both the artist and the agent.
The better practice is for the artist to be named as the licensor, and for the agreement to identify the agent as the artist/licensor(s agent.