A Brand Royalty Agreement is essential when a business wants to authorize another entity to use its brand assets in exchange for royalty payments. This document, governed by Hong Kong law, is commonly used in scenarios ranging from international brand expansion to local licensing arrangements. It establishes the commercial and legal framework for brand licensing, including detailed provisions for royalty calculations, payment terms, quality control measures, and brand protection requirements. The agreement ensures compliance with Hong Kong's intellectual property laws, particularly the Trade Marks Ordinance (Cap. 559), and addresses tax implications under the Inland Revenue Ordinance. It's particularly relevant for businesses expanding their brand presence in Hong Kong and the broader Asian market, providing a structured approach to brand monetization while maintaining brand integrity.
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1. Parties: Identification of the licensor and licensee, including full legal names and registered addresses
2. Background: Context of the agreement, confirmation of brand ownership and rights to license
3. Definitions: Defined terms including 'Brand', 'Territory', 'Licensed Products', 'Net Sales', 'Royalty Rate'
4. Grant of Rights: Scope of license, territory, exclusivity/non-exclusivity, and permitted uses of the brand
5. Term and Renewal: Duration of the agreement and conditions for renewal
6. Royalty Payments: Royalty rates, calculation methods, payment terms, currency, and reporting requirements
7. Quality Control: Quality standards, approval processes for brand usage, inspection rights
8. Protection of the Brand: Obligations regarding brand protection, infringement reporting, and cooperation in enforcement
9. Representations and Warranties: Parties' representations regarding brand ownership, right to contract, and compliance with laws
10. Termination: Termination rights, breach provisions, and consequences of termination
11. Confidentiality: Protection of confidential information exchanged during the agreement
12. General Provisions: Standard boilerplate clauses including governing law, notices, assignment, and entire agreement
1. Minimum Performance Requirements: Minimum sales targets or royalty payments required to maintain the license
2. Sub-licensing Rights: Terms and conditions for sub-licensing if permitted
3. Marketing and Promotion: Marketing commitments, advertising requirements, and brand usage guidelines
4. International Commerce Terms: Additional provisions for cross-border licensing including currency conversion and export compliance
5. Audit Rights: Detailed audit provisions for verifying royalty calculations
6. Brand Development: Provisions for brand evolution, new product development, and brand extension
7. Local Registration: Requirements for local trademark registration in licensed territories
8. Force Majeure: Provisions for handling unforeseen circumstances affecting performance
1. Schedule 1 - Licensed Brands: Detailed list of licensed trademarks, including registration numbers and classes
2. Schedule 2 - Licensed Products: Comprehensive list of products covered by the license
3. Schedule 3 - Territory: Detailed definition of geographical territories covered by the license
4. Schedule 4 - Royalty Rates: Detailed royalty rate structure, including any variations by product or territory
5. Schedule 5 - Quality Standards: Specific quality requirements and specifications for licensed products
6. Schedule 6 - Brand Guidelines: Detailed guidelines for brand usage, including logos, colors, and styling
7. Schedule 7 - Reporting Templates: Forms and templates for sales reporting and royalty calculations
8. Schedule 8 - Approval Procedures: Detailed procedures for obtaining approval for brand usage and new products
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