Reviewing a licence agreement for your product or brand

Licensing a product, a design or a brand lets another business make or sell it in a market the owner cannot reach, in return for royalties. The licence has to grant enough for the licensee to invest, keep enough control for the owner to protect the brand, and make sure the money is paid and can be checked. The agreement needs to do all three. I review the agreement from the licensor's side and return it marked up with a written explanation of the changes and which ones a licensee will accept, for a fixed fee of £495 in three working days.

Who this is for

Brand owners, designers, inventors and product businesses in England and Wales licensing their product, design or brand to a manufacturer, a distributor or a retailer in the UK or abroad, and want the agreement to protect the brand, the rights and the royalties. Both parties are businesses; consumer law matters because the product will carry the licensor's name.

What to look for in a licence of your product or brand

The rights granted, exclusivity and the territory

The agreement should identify each right licensed: the registered trade marks by number, the copyright in artwork and designs, registered designs, and know-how. A trade mark licence must be in writing signed by the proprietor under section 28 of the Trade Marks Act 1994, an exclusive licence of copyright must be in writing under section 92 of the Copyright, Designs and Patents Act 1988, and the review checks that the licence states whether it is exclusive, sole or non-exclusive, defines the products, the territory and the channels, and reserves everything not granted. Where a patent is involved, its drafting, filing and prosecution are matters for a patent attorney regulated by IPReg, and the review addresses the licence terms rather than the patent.

Quality control and approvals

A licensor that does not control the quality of goods sold under its mark risks the mark becoming deceptive and liable to revocation under section 46 of the Trade Marks Act 1994, and the brand's reputation follows the licensee's worst product. The review asks for a specification, pre-production sample approval, ongoing quality standards, inspection rights, approval of packaging and marketing, and a right to require withdrawal of non-conforming goods, with the licensee's manufacturing sites and sub-contractors approved by the licensor.

Royalties, minimum guarantees, reporting and audit

The royalty should be defined on a clear base, net sales with listed deductions only, with a minimum guarantee paid in advance or against which royalties are set off, and a rate that steps up with volume where the licensee's sales justify it. The review asks for quarterly statements in a set format, payment within a stated period, interest under the Late Payment of Commercial Debts (Interest) Act 1998 on late royalties, an audit right with the licensee paying the audit cost where the underpayment exceeds a stated percentage, and a right to terminate for a missed minimum.

Product liability in the licensor's name

Where the licensor's name or mark appears on the product, Part I of the Consumer Protection Act 1987 treats a person who holds itself out as the producer by putting its name on the goods as the producer, with strict liability for damage caused by a defect, and the General Product Safety Regulations 2005 treat an own-brander as the producer. The review asks for the licensee to warrant compliance with product safety law in each territory, to indemnify the licensor for claims arising from the licensee's manufacture, to carry product liability insurance naming the licensor, and to manage and pay for recalls of the licensee's products.

Sub-licensing, competition law and the licensee's own brand

The licence should prohibit sub-licensing and assignment without consent, or allow sub-licensing to approved manufacturers only. Under section 29 of the Trade Marks Act 1994 an exclusive licensee may be given rights as if it were the proprietor, and under section 31 it may have its own rights against infringers, so the review checks that infringement control stays with the licensor. Territorial and customer restrictions on the licensee are permitted within the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022; a term setting the licensee's resale prices is resale price maintenance under section 2 of the Competition Act 1998. The review also checks that the licensee cannot register the licensor's marks or a similar mark of its own, and that goodwill from use accrues to the licensor.

Term, termination, sell-off and what comes back

The agreement should set the term, renewal conditions, and termination for missed minimums, quality failures, challenge to the licensor's rights, change of control and insolvency. On termination the review asks for a short sell-off period for conforming stock at normal prices, delivery up or destruction of remaining stock, moulds and artwork, return of confidential information, and an obligation on the licensee to stop using the marks and to withdraw domain names and social media handles that contain them. Registration of the licence under section 25 of the Trade Marks Act 1994 protects the licensee and is worth agreeing where the licensee asks.

What it costs

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Complex review, £895. Heavily negotiated or unusually complex documents. Five working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

The licensee wants exclusivity for the whole of Europe. Should we give it?

Only in return for minimum guarantees that reflect the territory, with the right to take back countries the licensee does not exploit. The review asks for exclusivity to be tied to minimums by territory, for the territory to shrink if the minimums are missed, and for the licensor to keep online and direct sales where agreed.

If a product the licensee makes injures someone, are we liable?

You can be, because putting your name on the product can make you the producer under the Consumer Protection Act 1987. The review asks for the licensee to comply with product safety law, to indemnify you for claims arising from its manufacture, and to carry product liability insurance naming you.

How do we know the royalty statements are right?

Only through an audit right, which the review checks and strengthens: access to the licensee's records on notice, an independent accountant if you prefer, the licensee paying the audit cost where the underpayment exceeds an agreed percentage, and interest on the shortfall.

Related guidance and services

• Contract review, £495, the service this page describes
• Terms and conditions drafting, £995
• Reviewing a trade mark licence
• Reviewing a distribution agreement from a manufacturer

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.