Well-constructed licensing and distribution agreements protect revenue streams and intellectual property while clarifying each party’s responsibilities. They minimize litigation risk by defining dispute resolution, termination rights, and liability limits. Effective contracts also enable strategic growth through territory management, sublicensing controls, and performance incentives that align partners on long-term commercial success.
Thorough contract drafting clarifies liabilities, sets insurance and indemnity expectations, and provides structured remedies for breach. These protections reduce the frequency and cost of disputes, preserve commercial relationships, and protect the company’s financial position by limiting unintended exposures.
Our firm focuses on translating business objectives into enforceable contract provisions that manage risk and support growth. We collaborate with clients to prioritize commercial terms, negotiate balanced outcomes, and prepare operational schedules and exhibits so agreements are clear and actionable for all parties.
Our services cover negotiating amendments, conducting audits to verify payments and performance, and pursuing resolution through negotiation, mediation, or litigation if necessary. We focus on pragmatic dispute management to protect commercial relationships while defending client interests.
A license grants permission to use intellectual property such as patents, trademarks, or software under specified conditions, while a distribution agreement governs how products are sold through distribution channels. Licensing focuses on rights to use or commercialize IP, whereas distribution sets responsibilities for supply, marketing, and sales logistics. Deciding which arrangement is appropriate depends on business goals. Use a license when you want third parties to exploit your IP directly. Use a distribution agreement when the focus is on moving products through a reseller or wholesale channel, often combined with elements that protect brand and quality.
Royalties are calculated using fixed fees, percentage of net sales, per-unit amounts, or hybrid formulas that combine minimum guarantees with performance-based percentages. Agreements specify accounting methods, allowable deductions from gross or net sales, payment schedules, and currency to avoid disputes about calculation. Enforcement relies on clear reporting and audit rights. Include documentation requirements, timing for statements, and remedies for underpayment. Audit provisions typically allow periodic review by an independent accountant to verify reported sales and royalty payments with consequences for underreporting.
Quality control provisions should define product specifications, manufacturing standards, labeling requirements, and approval processes for marketing materials. Include inspection rights, corrective action procedures, and the ability to suspend use of trademarks if standards are repeatedly violated to protect brand reputation and customer trust. Practical clauses set measurable quality metrics and timelines for remedying defects. They also provide for technical cooperation and training when needed, along with consequences for persistent noncompliance such as termination or limitation of distribution rights.
Yes, you can grant exclusive rights to a distributor for a defined territory or channel, but exclusivity carries trade-offs. Exclusive arrangements can help motivate a distributor to invest in marketing and inventory, but they may limit your ability to work with other partners or sell directly in that territory. When granting exclusivity, include performance benchmarks, minimum purchase requirements, and termination clauses tied to underperformance. These protections ensure exclusivity promotes sales growth rather than creating a passive arrangement that restricts market access without benefits.
Termination and transition provisions lay out notice periods, cure opportunities, and how to handle outstanding inventory, returns, and unsatisfied royalties. Clear mapping of post-termination rights prevents surprises and preserves value, including rules for unsold stock, rights to residual inventory, and continued use of confidential information for winding down. Transition clauses can also require cooperation on customer handoffs, transfer of data, and completion of pending orders. Specifying timelines and responsibilities reduces business disruption and helps preserve customer relationships during contract changes.
Common indemnity provisions allocate responsibility for third-party claims related to IP infringement, product liability, or breaches of representations and warranties. Liability limits, carve-outs for certain claims, and insurance requirements help balance protection with commercial viability by defining the scope and extent of recovery. Draft indemnities and liability caps that reflect realistic risk exposure. Include obligations to defend, control settlement terms, and timely notice of claims. Insurance provisions should align with the potential scale of exposure and require evidence of coverage where appropriate.
Sublicensing and assignment rights determine whether a party may transfer its rights and obligations to third parties. Restricting assignment without consent protects the licensor from unwanted partners, while allowing limited assignment to affiliates or during corporate reorganizations provides operational flexibility. Consider including consent thresholds, permitted assignees such as affiliates, and obligations for notice upon transfer. Special rules for change of control should address whether a buyer inherits existing contractual rights or must seek approval to continue distribution or licensing activities.
Cross-border agreements must account for export controls, customs, tax implications, and differing intellectual property registration regimes. Governing law and dispute resolution clauses should be chosen carefully to balance enforceability and convenience, potentially using arbitration or selecting jurisdictions with relevant commercial law frameworks. Commercial teams should evaluate currency risks, import/export compliance, and local regulatory requirements. Counsel can advise on registration strategies for IP, local contract formalities, and necessary certifications or labels to ensure lawful distribution across borders.
Require audits and reporting rights when royalties, compliance, or inventory levels materially affect your revenue or brand protection. Reporting obligations should specify formats, frequency, and the level of detail for sales, returns, and deductions. Audit provisions should include notice, frequency limits, and who bears costs if significant underreporting is discovered. Audits are particularly important for royalty-bearing licences and high-volume distribution channels. They provide transparency, deter underreporting, and enable recovery of unpaid amounts while offering a nonconfrontational path to verify performance through independent accounting reviews.
For sale or investment due diligence, ensure contracts are assignable or include buyer consent provisions, and gather all procurement, distribution, and license histories for review. Clean, well-documented agreements with clear revenue streams and minimal contingent liabilities increase transaction value and reduce friction during negotiations. Address any outstanding disputes, required third-party consents, and potential change-of-control restrictions before marketing the business. Preparing summary schedules and standardizing documentation expedites diligence and provides buyers or investors with confidence in the stability of contractual relationships.
