Link-ups not stitch ups
September 12, 2012
Collaboration. It’s all the rage. Drapers on September 8, 2012 reported that Marks & Spencer’s new director of kidswear and home, Stephanie Chan, could result in more collaboration with designers.
But that doesn’t mean you can simply agree with your collaborator to collaborate.
In With or without you? Options for brands and designers seeking to benefit from celebrity exposure we considered how brands can benefit from collaborative relationships. But what are the dos and don’ts so far as your collaboration agreement is concerned?
First and foremost you need to be clear as to what your collaborator is bringing to the party. A simple statement such as “design expertise” or “name awareness” is at best insufficient. At worst, it is a litigation opportunity waiting to explode with consequential damage to your brand, wasted management time, and the incurring of unnecessary legal costs.
Instead you should set out in as much detail as possible the design services to be provided. Essentially this is the extent to which the collaborator will be involved in the design process of the collaborative range. Equally the agreement needs to make clear where the collaborator’s rights cease. For the collaborator to claim that there has been an infringement of his moral rights because he does not like what you are doing will call into question the whole rationale for the collaboration.
But if you don’t address these issues, you will be at risk. It follows that your agreement must tackle the issue of intellectual property.
The collaborator should be concerned to ensure that by collaborating with you he will not be exposed to any threat of infringement claims by third parties. You can expect that he will seek warranties as to your intellectual property position. He may also seek an indemnity against such claims.
The converse is also the case. Warranties and indemnities given by the collaborator will provide you with some protection. However, before determining what warranties and indemnities to seek, a trade mark and design right search of relevant registries will inform you of immediate issues.
The agreement must also make clear the basis upon which the intellectual property provided by the collaborator will be provided. Will it be on a licence basis or will you have ownership? Equally will the collaborator own any part of the intellectual property in the range which has been designed? If it is you who decides whether or not registration should be sought for a design, it should be you who decides whether or not action is taken in respect of third party infringers as well as claims of infringement made by third parties.
Almost acting as a shadow of intellectual property is whether a restriction is to be placed on the other activities of the collaborator under the terms of the collaboration agreement. Preventing the collaborator from being involved with a competitor is obvious. Less so if the collaborator is involved in some form of unsavoury activity or makes a non-politically correct statement.
The extent to which the collaborator may be prepared to agree to be restricted in his other activities is likely to be linked to his remuneration. Is this to be a salary or consultancy fee? How about a percentage of net sales? If the latter you need to ensure that you do not end up paying a royalty either on VAT or on invoices as opposed to monies when they are received.
The final issue is the duration of the agreement. Will it be for a fixed period? Will it be capable of renewal? If so on what terms?
Addressing these questions from the outset is likely to pay dividends in respect of progressing the relationship with the collaborator. It is also likely to result in lower legal fees as you have a collaboration agreement which will be fit for purpose!