Agreement Between Owner And Manufacturer

On the other hand, a manufacturer may be asked to invest a lot of time and money to develop specific skills or acquire expensive equipment to start producing the brand owner`s products. What will happen to this investment if a brand owner is able to find another manufacturer who is willing to produce the same goods for less? The producer will also benefit from a reliable long-term production plan. An exclusivity clause is just one of many conditions that brand owners and manufacturers wish to address in an agreement that regulates a contractual relationship. Other conditions that the parties should consider include the relevant terms and conditions, quality standards and remedies, the rules of confidentiality that will govern the law of jurisdiction and the jurisdiction in which the agreement is to be concluded. Thoughtful and carefully crafted agreements can protect the manufacturer and trademark holder from unintended results and allow each party to clearly understand its relationship rights and obligations from the outset. Pamela A. Grinter is a partner in the Department of Fox Rothschild LLP. She represents private, public and not-for-profit companies in the full range of business transactions, including the choice of business and business creation; Shareholder management mergers and acquisitions; production, distribution, franchising and trade agreements; and business. She can be contacted by pgrinter@foxrothschild.com. The client accepts that, for the duration of the agreement [or a shorter or longer period], the manufacturer is the sole manufacturer [of products manufactured under this agreement] or lists certain products for the [specific sector] unless, in all cases, that contract is terminated by the manufacturer for any reason or by the customer for no reason or (ii) the manufacturer cannot continue to deliver the products manufactured under this agreement if they are ordered and at agreed prices.

A typical exclusivity clause that benefits a trademark holder requires the manufacturer to limit the production and sale of the same or similar products for a specified period of time. An exclusivity clause for a trademark holder may exist during the duration of the employment contract. However, a trademark holder often wants the exclusivity period to be extended beyond the duration of the contract, so that a manufacturer cannot immediately start manufacturing competing products when the relationship ends. The scope of this exclusivity clause generally also applies to products that are identical or substantially similar to the trademark holder to products for which the contract manufacturer has been responsible by the contract manufacturer. Some brand owners may also wish to identify competitors with whom a producer cannot cooperate. Let`s now take a look at the details contained in this agreement: manufacturers should be aware that trademark holders may be reluctant to accept an exclusivity clause like this. While a brand owner would certainly appreciate reduced pricing for a larger volume, good collaboration with an experienced manufacturer and the usefulness of the know-how developed by the manufacturer, he might also want several sources for his products in order to minimize the risk of supply – which would limit this type of exclusivity clause. The parties may have to strike a certain balance between the two rules of exclusivity and a clear exclusion for the trademark holder if the manufacturer does not act properly. A licensing agreement between a trademark holder and a manufacturer is an official document indicating that the manufacturer of a product is authorized to manufacture the product by the company or by the person who protected it.

However, the trademark holder may choose the terms of the licence for this contract. This agreement is essential evidence – which is also valid in the courts – to ensure that the protected component is not copied and manufactured illegally.