Example Agreements: Licensing Your Brand To Create Chackies For Your Distributors and Customers
People love to wear branded stuff. I accept this as a general truth. The sooner you accept is as well and offer them the chance to promote your brand for you, the sooner you’ll be getting some free advertising. They particularly like beer, spirits, and food brands (my awesome Chateauneuf Du Pape shirt notwithstanding). That means someone will have to make these promotional items for you … big surprise, there are plenty of companies willing to do that. When your brand is large enough, some companies even competitively bid the pricing. And don’t forget the awesomeness of a catalog for your partners – distributors – to be able to order items to hand out (or sell) to retail outlets. It all adds up to a fairly wonderful arrangement, and like most “wonderful arrangements,” is best accomplished through a written agreement.
MillerCoors recently prevailed in a lawsuit brought by a third-party promotional company against the brewer alleging breach of just such an agreement that the promotional company and its successor had with Molson Coors and then MillerCoors to manufacture MC branded items that would be sold through a catalog the brewer offered to distributors. You can read the opinion here where the factual meat of the matter is hashed out by the court in finding that none of the defendants’ actions amounted to the alleged conduct under which damages were sought by the promotional company. It’s not that interesting. What is interesting to any brewer, distiller, vintner; food manufacturer, or anyone else with a brand that may want to capitalize on promotional items (buttons, t-shirts, hoodies) is the licensing agreement and addendum.
Reading through these agreements, you may get a better sense of some of the items to consider in negotiating your own licensing agreements. One is for MillerCoors and one is a prior iteration for Molson Coors Global.
No, surprise, but an interesting read for craft brewers who may be looking for some decent guidance regarding responsible advertising, in the MillerCoors Agreement, you’ll see compliance with the Beer Institute Advertising and Marketing Code along with strict procedures to be followed under that code are mandated by the agreement. There’s also a decent Business Conduct policy that all brands will want to examine to see an example of a “morals” or “ethical conduct” policy that you may want to consider for your own agreements to ensure responsible practices from your contractual partners and the ability to terminate your relationship based on delineated unethical behavior. This is a particularly important point in a regulated field where illegal or unethical conduct might be attributed upstream to manufacturers. Having a policy in place specifically mandating proper behavior can be an example of responsible practices that might help tip the balance against agency action.
The MillerCoors Licensing Agreement:
The Molson Coors Global Agreement: