ACID has had an amazing, high profile year! As well as continuing the fight to improve designers IP rights, our membership has increased month by month, we have received masses of national TV, radio and press coverage, and launched exciting new IP awareness campaigns and initiatives. Working on the premise that ‘he who shouts loudest’, ACID’s voice against design theft now resonates within Government and legislative quarters as well as the design industry as a whole – and thanks to our members, partners and friends of ACID – the battle goes on! The good news is that heightened global awareness regarding IP issues has made designers and manufacturers even more IP savvy. Hundreds of our members are including design and brand protection as part of their business strategy and shamelessly using the ACID logo as their voice of deterrence.

ACID has had a number of priorities during the course of the year and I would like to take this opportunity to name just a few: The recent Gowers Review on Intellectual Property has resulted in the establishment of a Strategic Advisory Board on Intellectual Property to advise Government and the UK Intellectual Property Office. The SABIP will be announcing the Chairperson and the 9 Board members in Spring 2008. ACID will be keen to see what the new Chairperson will consider his/her priorities and will review the Boards progress in this column in 12 month’s time! As a result of ACID’s (and others) submissions to the Gowers consultative process, the role of a dedicated Minister for Intellectual Property has been created and Lord Triesman was appointed to the task of overseeing the UK’s Intellectual Property. Andrew Gowers commended ACID as a private sector initiative which “stood out as a good example of ways in which public and industry awareness about IP can be increased”. However, not forthcoming was a recommendation to provide funding to broaden out the ACID initiative to a wider audience. ACID still seeks that backing!

One of our key priorities in 2007, through ACID Lobby and on behalf of membership, was the submission of a comprehensive response to a consultation document on damages requested by the Ministry of Justice. ACID believes that punishing the wrong doer in a fair and just society means introducing a scale of damages which act as a sufficient deterrent against copying. In short, we believe that exemplary damages should be increased as many of us know, apart from the financial loss, damages rarely compensate for the mental distress and moral outrage of IP theft! ACID Lobby will only ever be effective if individual members and organisations support its objectives. Please express your support at grass roots by raising these issues with your own MP! And, if required, please don’t hesitate to call us for a draft letter.

During 2007, at the request of Trading Standards, ACID launched a training module to introduce their officers to design right issues. By instigating this programme, the subject of design right infringement is now included in the Trading Standards Officers’s examination resulting in an improved understanding of IP issues as well as an awareness of all industry groups such as ACID.

2007 has seen our affiliate partnerships grow to 18, the latest to join are the Middle East Association of Interior Designers (APID) and the Furniture Ombudsman and our media supporters continue to come on board, the newest additions being idFX and FX. In January of 2007 I became a CEDR Accredited Mediator which has helped ACID to foster mediation as a real alternative to litigation.

In October, ACID held its first Mediation Theatre demonstrating the positive dynamics of mediation hosted by the UK Intellectual Property Office and co-hosted with CED (Centre for Effective Dispute Resolution). During the last 10 years, ACID has clocked up a staggering 1800 grass roots mediations at exhibitions. Less than 30% of these have required further legal intervention. Often ACID’s mediations have resulted in commercial agreements being struck between the two parties such as a licence agreement or a royalty agreement.

10 years ago, as a result of my own company facing collapse through copying, ACID was launched from a soap box at Decorex with a few faithful followers who started the first round table action group against copying  very much as “Davids” against “Goliaths”. Today ACID is a significant organisation representing IP owners from multi national brands to individual designer makers, all share one objective to capitalise on their creativity and innovation without running the risks of IP theft. Whilst we have a significant track record of nearly 230 settlements against infringers, in 2008 and beyond ACID will continue to expose design theft and encourage innovative collaboration and the expansion of brands through licensing, franchising and the support of IP as a positive force.

I would like to thank all our ACID members for their continued support, to our media supporters for providing a platform to “Name and Educate”, to our Affiliate Partners whose organisations support, encourage and, therefore broaden our aims and objectives to difference industry sectors, to our ACID Accredited Law Firms who have provided invaluable practical help, support and guidance and to the many other Friends of ACID whose continued enthusiasm for our work is sustaining.

And last but not least, a date for your diary! ACID will be ten years old on 9^th April 2008.Celebrations will be at the Design Council between 5.30 and 8.00 more news later.

With all good wishes for a very Happy New Year and a healthy and prosperous 2008.

Dids Macdonald CEO ACID (Anti Copying In Design)

LORD TRIESMAN

Following successful campaigning by ACID (Anti Copying In Design) and other key stakeholders pressing for the creation of the role of Intellectual Property Minister, Lord Triesman now appointed to the role, set out his store one year on from the Gowers IP recommendations. At an event organised by the Social Market Foundation and sponsored by the Alliance Against IP Theft. Lord Triesman confirmed that whilst the recommendations need to remain flexible to allow for current and future developments, the Gowers Recommendations will be constantly reviewed and adjusted to ensure that the balance of IP rights holders and users is maintained.

With the ever growing tensions and frustrations between rights-holders and consumers, he confirmed that Government cannot set hard and fast rules but will continue dialogue with businesses to seek solutions, urging all stakeholders to take part, looking at the diverse range of business models available to encourage consumer respect for intellectual property. In a bed rock reality check, UK IP stakeholders need not look to Government for immediate legislative reform simply because of the timescales involved however, he assured those present that, “We wouldn’t lose momentum in the UK and will would continue to seek national and international agreements on IP issues. Communication is key, raising awareness of IP where it fits in, how it works with consistent messages which are targeted at all appropriate platforms”.

Highlighting illegal activity and the consumer, Lord Triesman acknowledged (unsurprisingly!) that IP crime is not at the top of most people’s priorities, however the damage inflicted on organisations has a significant impact and Government cannot overlook demonstrable examples of links to organised crime which will become a priority issue for all enforcement agencies. However, solutions will be governed by consumer use and each type of IP theft must “not alienate consumer” he went on to say that “Changing the culture is difficult and requires consumer engagement”.

In summary, Lord Triesman confirmed his “absolute commitment and willingness to work with all stakeholders and, by facing the challenges”, he continued, “Together we can make a difference in the UK”. He then outlined the input he would like to encourage from stakeholders:

1) Developing a way of transferring the cultural messages about IP respect and the consequences of IP abuse – achieving understanding of the creative value of the mind

2) Via consultation – comprehensive responses that map the IP terrain but which are not anti competitive

3) Thinking more creatively about what is in the creative commons from the standpoint that more economic activity is generated by knowledge sharing whilst, at the same time maintaining and protecting business survival by ensuring the balance is right.

Wishing him good luck on his appointment to the position of Minister of Intellectual Property a canny Gordon Brown said, “Take a look at the value that IP has in the UK, it’s a leading edge economy double it!”

ACID COMMENT

The Gowers Report, published in 2006, made 54 recommendations having attracted detailed and comprehensive submissions from over 600 stakeholders representative of the UK economy. Lord Triesman might well benefit from revisiting some of the tried and tested business models working effectively within the UK and not highlighted by Gowers in his recommendations, including ACID.

ACID will continue to lobby the Government, through Lord Triesman and garner support for the provision of exemplary damages which, under the existing legal structure are woefully inadequate and serve no purpose in dissuading those who seek criminal gain from what is still considered a “soft crime” by continuing to make vast profits from the immoral, anti-commercial and criminal activities which they continue to pursue. The organisation will continue to press for Aggravated Damages – The mental distress and moral outrage of IP theft must be seen to be quantified and demonstrated by the award of aggravated damages – often it takes a tremendous amount of conviction, courage and huge financial cost to take action causing ensuing mental distress. Restitutionary damages which fiscally balance the difference between the sale of a cheap copy and the amount lost by the originator/creator who has had to bear all the design, development or promotional costs. Exemplary Damages Punishing the wrong doer in a fair and just society rarely happens in IP infringement. IP crime is still not considered as “theft” nor is it promoted as “theft” clearly because of economic concerns and a lack of education and awareness by the consumer that they are doing anything wrong when they buy counterfeit, pirated or copied goods.

ACID would also urge Lord Triesman to really put his weight behind mediation as a real alternative to litigation and ensure that UK businesses look into their own back yard with declared corporate responsibility on IP issues and a public commitment to seek mediation sooner rather than later in the legal equation as recommended in Crown Prosecution Rules and encouraged by many UK judges.

Finally, IP having at last being given the importance of a ministerial status, ACID would urge Lord Triesman to ‘influence the influencers’ within Government.  Through his political network he has the opportunity to put the protection and encouragement of the nation’s intellectual property much higher up the political ladder.

Standard Terms of Trading via the Internet

ACID is encouraging all designers/manufacturers to pack their intellectual property (IP) tool kit with as much armoury as possible – and this includes keeping up to date with ACID’s portfolio of legal agreements – written by the organisation’s team of Accredited Lawyers and tailored to a variety if trading situations – web, pitching, licensing/royalty and standard terms and conditions of business, all with a particular focus on safeguarding intellectual property rights.

Although the agreements are available to all, ACID members benefit from the support of the ACID Legal Hotline 0845 2305742 to discuss their requirements. However, non-members still get a good deal and a standard re-usable legal document. The latest addition is ACID’s new Standard Terms of Trading via the Internet.

This invaluable Agreement covers all the elements required for protecting both the supplier and the customer – liability, warranties, data protection, and intellectual property. The agreement is re-usable and represents excellent value as a one-off investment. If users feel there are one or two clauses which do not apply to their circumstances – these may be amended or deleted as required and once legally checked with an ACID accredited lawyer (via the ACID legal hotline) or solicitor the agreement becomes bespoke.

Says Dids Macdonald, ‘We want ACID members to get the best from their business relationships. All our industry standard agreements include support tailored to raise awareness within all commercial frameworks that IP ownership is highlighted appropriately and legally clarified. Hundreds of our members have found these agreements effective and simple to use.

Mark Heritage is an assistant solicitor at ACID Accredited Law Firm Hammonds, which provides advice on the full range of intellectual property rights and their enforcement

The increasing centrality of the world-wide web to modern business clearly affords designers great opportunities to advertise their products and talent and expand their business. However, it also provides a ready route for copyists to disseminate infri ngements globally at the touch of a button, and too many designers have heard of (or been the victim of) online copying, which might range from plagiarism of marketing text, images or other materials, to unauthorised trade mark or brand use, or outright copying of product design.

So what can you do if you find infringements of your IP online? The standard approach is to target the individual or company known (or suspected) to be behind the posting of the infringing material online with a cease and desist letter. However, it can prove difficult to achieve results with this method, as often the infringer (who can be based abroad) has taken steps to obscure their identity, or simply does not respond, requiring further costly enforcement action. However, a more creative approach, involving the relevant website “host”, can yield results. By way of background, a domain name (i.e. and internet address in the format “www”….. .com, or .co.uk, etc) is registered by a “registrant” with a “registrar”, who distributes domain names. Once the domain is registered, the website and online materials accessible through are then “hosted” (i.e. brought onto the world-wide web, so as to be accessible by internet users) by a “host” provider.

What is not commonly known is that there are frequently express provisions in the host’s standard terms with the registrant which entitle the host to suspend its hosting. These are essentially designed to protect the host from liability. However, usefully for designers, they often include circumstances in which material provided for hosting infringes one or more IP rights or is generally “unlawful” (although the precise terms vary from host to host).

If the host can be satisfied such material has been provided for hosting by the registrant, they may suspend hosting as a defensive step. If this is done, internet users trying to access the website at that domain should receive the familiar white screen and the message that the website is “unavailable”, or be taken to a holding page. In either case, online access to the website effectively becomes impossible and the “flow” of infringements into the public domain is halted.

Therefore, combining a cease and desist letter to the host with a cease and desist letter to the registrant can allow online infringements to be attacked from both the “top-down” and “bottom-up”, increasing the chances of early success.

President Sarkozy is leading a crack down against downloading music and films from the internet without paying for them, with a ground breaking new enforcement body. Those who persistently continue to illegally download will be cautioned. If they ignore two further warnings they face the possibility that their internet accounts will be suspended or terminated.

In a deal struck with the music industry an agreement has been made to make individual downloads of archive French material available on all types of players and will drop digital rights protection. Equally the French film industry has responded with an offer to release DVDs more quickly following a film’s release. Groups representing consumers have reacted negatively to the proposal claiming that it will be a threat to civil liberties. In order for the new enforcement body to be fully up and running, the French Government will have to introduce new laws which could come as soon as Spring 2008.

ACID comment: The French already lead on several IP initiatives – to date we have seen a move within the fashion industry to ban journalists from fashion shows, thus allowing the catwalk creations to have a steal on the lookalikes. Under the French IP Genesis scheme to help companies evaluate their IP worth, the French Government provides free help and expert advice from IP experts which identifies the rights they should be protecting.

ACID has led the way in the UK with free Intellectual Property Strategy Reviews, (IPSR’s) available to ACID’s corporate members and in 2008 ACID will seek Government sponsorship to broaden out their service to non-members. The scheme was started several years ago and many companies have benefited. One such audit took place at ACID members Duresta. Following the IP Audit MD Clive Kenyon Brown said, ‘I would thoroughly recommend an ACID IP Strategy Review for all design led businesses, which should include all senior members of staff, so that they may fully understand the importance and value of the intellectual property within their business’.

IP Health Check Guidelines:

• Knowledge of IP Law

Understand and identify basics of IP law that affect you and your company’s products/services. For example, review your existing trade mark portfolio and identify priority territories. Decide which IPRs need to be registered and allocate the appropriate budgets, don’t forget that this is tax deductible. Identify company secrets and confidential processes and ensure they are secured and managed. Create a protocol for the management of company ‘know how’.In house – are your design/creation processes secure? Ensure that your design/creation process includes the necessary safeguards and that all marketing material communicates an anti copying message. Always sign and date work and, wherever practical and possible, lodge with a 3rd party or ensure you have a secure in house document management system. Brand protection – consider incorporating technology which will allow you to trace origin and authenticity in packaging. Do you have clauses in standard terms and conditions of employment with your designers which flag up the ownership of IP? If you employ freelance designers, always have a standard agreement in place to clarify IP ownership. Network with all those within the supply chain to inform you of any possible lookalike productsMake sure your staff fully understand the value of your original products and are aware of the investment, research and development which goes into your product range/service. Ensure your standard terms and conditions of business and supply contain IPR clauses clearly clarifying ownership and responsibilitiesCarry out regular due diligence checks on suppliers, manufacturers, contractors and other partners and have a system in place to monitor production standards including overrun audits

• Secure supply chain
• Establish relationships with IP experts

By establishing relationships with IP experts who know your business they can help you create an effective IPR strategy underpinned by the appropriate registrations relevant to your business. Having your IP house in order will act as an invaluable USP and key driver in attracting investment or in mergers, acquisitions and investments. Having a proactive approach will help you prepare for any unpexpected challenges before they occur.

In the latest IPKat posting the new UKIPO search facility for Trademarks has been reviewed.

“One of the commoner gripes of UK trade mark lawyers is that UKIPO’s public database does not allow proper searching for identical or similar marks. Until now, you’ve been restricted to simple searches for the word elements of marks, and then only where the element starts with a specified string of characters or is an exact match. For anything more sophisticated than this, you’ve had to rely on subscription services (not cost-effective for occasional enquiries) or begging favours from fellow professionals. But UKIPO has recently unveiled (with an almost total lack of fanfare) an improved search facility. The options on offer include word and/or image searches and more flexibility with the position of search terms within trade marks. You can filter results by reference to Nice class, filing date and mark status. There are even helpful online guides provided in case it’s all a bit much. On the plus side, results are displayed clearly and quickly and the glitches mentioned above should be easy to fix. We should then have a significant upgrade of the trade mark professional’s toolbox, perhaps no match for subscription services (searching for lookalikes and phonetic similarities will remain awkward), but better than what we’ve been used to.”

To view the full article visit the IPKAT Blog Spot

From the left, Back Row – John Farrell (Reconnaissance International), Robert Glenn (Stretchline Holdings Limited), Julie King (head of department fashion and textiles De Montfort University), Malcolm Ball (ASBCI chairman), Dids Macdonald (ACID), Simon Tracey (Davenport Lyons solicitors), Chrissie Morse (Timberland and the ACG), John Scrimshaw (Fashion Business International) Front row: Sarah Wright (Olswang solicitors), Alan Holder (Pentland Group) and Rachel Parman (Shoosmiths solicitors)

Fashion and textile professionals from across the fashion industry assembled at the recent ‘Protect the Brand – fighting the copycats and fakes’ conference in London to hear how they can best protect their intellectual property and brand identity from the world’s unscrupulous design pirates and counterfeiters. Organised by Fashion Business International in conjunction with the suppliers’ forum for clothing and textiles, the ASBCI, the conference assembled some of the UK’s foremost anti-counterfeiting and design theft specialists.  Speakers’ urged the fashion industry to unite in raising consumer awareness on the humanitarian cost of producing counterfeit goods and dispel the myth that it is a ‘victimless’ purchase with thousands of workers, including children, working in unregulated even brutal ‘underground’ sweat shops.

Delegates heard how the $900 billion global counterfeit industry is organisationally linked to international terrorist and criminal enterprises. Meanwhile, designers and brands were urged to audit their design development trails, patent their original design wherever possible then brand, protect and be prepared to publicly defend their intellectual property, IP, in a united bid to deter the copycats. Speakers also appealed to governments and customs authorities to impose higher legal and financial penalties with the ultimate sanction of criminalising the consumer for purchasing and owning a fake.

The conference provided keynote speaker Dids Macdonald, CEO of ACID an opportunity not only to put the case against copying for designers, but to extend the message to 9 million listeners on the Radio 4 Today programme.

The event focused on the serious issue for many designers who often see their work “stolen” – copied by powerful and unscrupulous players, seeking an easy shortcut to consumer appeal. The theme of the day also concerned the billions of pounds diverted worldwide from the business of leading fashion brands by counterfeiters who benefit illegally from the investment these brands have made in their name and reputation. In the spate of recent high profile cases such as Chloe against Top Shop and Jimmy Choo against Marks & Spencer, Macdonald outlined the plea on behalf of many designers and creators who face a real threat through design theft, to urge retailers and manufacturers to support designers by commissioning original design, thereby creating their own signature ranges and, therefore, their own intellectual property. In this way retailers and manufacturers would not only support designers but also one of the UK’s greatest USP’s – design and innovation. By respecting the intellectual property rights of designers and brand owners, retailers and manufacturers would also negate the risk of being legally challenged over look alikes.

Macdonald also urged Government to place IP theft higher up the political agenda. According to Simon Tracey of Davenport Lyons who had undertaken a survey into Fake Luxury Goods and their social acceptance, the most effective way of changing consumer behaviour was to highlight the fact that often the proceeds are going towards the funding of organised crime or in worst-case scenarios – terrorism. Nearly 80 per cent of consumers said they would be put off buying counterfeits if they knew this to be the case. Also, amazingly, 20% of fake-buyers were from the £50,000+ bracket of salary earners.

Karl Mackie of CEDR with Dids Macdonald CEO ACID

At the first ACID intellectual property (IP) Mediation Theatre, held at the UK Intellectual Property Office, demonstrating the dynamics of two “real life” disputes involving a patent and design right infringement, ACID (Anti Copying In Design) joined forces with CEDR (Centre for Effective Dispute Resolution) to demonstrate the effectiveness of mediation as a real alternative to litigation. According to CEDR £33 billion is lost each year in the UK through time lost in conflicts in the workplace.

In the first “theatre” with lawyer representation, CEDR Mediator Alan Limbury, calmly and creatively facilitated and guided the patent dispute, whose parties were in deep disagreement over ownership of the invention, into the crafting of an agreement with both parties into a manufacturing and licensing deal. Prior to the mediation both parties were determined to go to a final court hearing to determine ownership of the invention.

The second “IP theatre” with parties only, using an actual ACID case study, involved a design right issue between a UK and Danish company, both in the trimmings business. Patrick Walker, Director of Advocacy at ACID Accredited law firm Hammonds, used his mediator skills effectively to draw out the key points of the dispute quickly and effectively to create a sound basis for bargaining and negotiation between the two parties. What could have resulted in a slanging match between professionals, not to mention legal proceedings, resulted in a framework for a productive and long term licensing relationship.

In her summary, Dids Macdonald CEO of ACID, a keen supporter of mediation, said, “I can honestly say that none of the 1800 or so mediations that we have facilitated have been the same but one consistent theme is how effective mediation is as a real alternative to litigation. I believe there is a need for a) mediation to enter the legal dispute equation sooner in accordance with Crown Prosecution Rules and b) there is a huge learning curve to be achieved so that those companies who follow the litigation route in disputes are fully aware of access to, and the availability of, effective mediation by trained and experienced experts in the field of alternative dispute resolution”.

According to CEDR “A New case brings impassioned plea from High Court Judge for more mediation”   Lord Justice Ward delivered the following comments in the judgment for the case of Egan v Motor Services (Bath) [2007] EWCA Civ 1002:

“What I have found profoundly unsatisfactory, and made my views clear in the course of argument, is the fact that the parties have between them spent in the region of £100,000 arguing over a claim which is worth about £6,000.  In the florid language of the argument, I regarded them, one or other, if not both, of them, as “completely cuckoo” to have engaged in such expensive litigation with so little at stake.”

Mark Jefferies, June Davies and Steve Probert from UKIPO

Thank you for your continued support of ACID it is very much appreciated. We rely on our highly valued members to help us continue our fight against IP theft.  ACID’s objective remains the same today as it was 10 years ago when the organisation was started to ensure that our members designers and manufacturers, pan-industry  receive the best possible service in design protection plus expert advice and guidance should their work be copied. ACID is also active in government lobbying to improve design laws, as well as educational programmes in IP for young designers.

We have made some positive changes to support our SMEs and, as a result of membership feedback, we have re-allocated the turnover categories so that a lower category has been created, ensuring that some of our members will be eligible for a reduction in membership fees.  We have also merged the previous top three categories to help you quickly assess which category of membership is appropriate to your business. To those of you that have not returned our recent communication regarding your turnover declaration we would ask that this is returned to us as soon as possible.  This will enable us to identify your correct category and renewal fee and issue your renewal request promptly.

ACID has endeavoured to keep membership costs as low as possible; in fact, we have not increased our fees during the last 9 years of operation. However, in order to maintain and expand our high level of member support services, educational programmes and lobbing activity, we are compelled to increase our membership fees in line with other trade organisations.  To make life easier, we offer a number of different ways to pay for ACID membership including a great new benefit a Direct Debit facility so payment can be paid annually or spread over the year in monthly or quarterly instalments.  Please note, Direct Debit mandates must be returned no later than the 14^th December to ensure inclusion on the Direct Debit list for 2008.  Alternatively, we still welcome payment by credit/debit card, cheque or direct bank payment.  Membership renewals are due on Ist January.

Over the years we have seen ACID grow from a small action group to a leading trade association (with over 1,000 member companies) fighting IP theft at all levels.  My heartfelt thanks to you for continuing to be part of this organisation and helping us lobby for a better deal for individual designers and design-led companies.

Art Meets Matter merchandise showing the licensed imagery from Penguin Books

For creative artists and gift and product designers licensing can be one of the most   effective and profitable relationships. Licensing is an extremely sound way to expand your business and develop long lasting commercial partnerships. However, it’s a two-way deal and only works when each party respects the other. For licensing to succeed, like any other commercial relationship, a sound and effective communications framework is essential, two way positive and constructive feedback being a key ingredient. If this is backed by a legally structured licensing agreement which has been negotiated in good faith on ethical grounds then, if the relationship is sound, licensing may well be an effective route to company and brand expansion.

Often callers to the ACID legal hotline will ask, how much or what percentage should I ask in royalties? There are no hard and fast rules, but clearly for any licensing arrangement to work effectively the level of royalties need to be acceptable for both parties. For the originator and design creator, sufficient so that they feel that their creativity is adequately rewarded and for the manufacturer/distributor enough to offer good profit margins. Basically, a small percentage of volume sales may be as good as a large percentage of small sales, so realistic discussion about potential levels of sales is key, possibly with built-in review dates based on success. In this way if a designer/creator has established a good and honest relationship with a manufacturer/distributor the goal posts can change depending on the success of a particular product range. This will encourage the artist/designer to work positively within that partnership and can lead to better returns all round.

So what are the watch points when setting up a licensing deal? Who owns the rights?
If the licence agreement clearly states who owns the rights then if there is a problem further down the track you can refer to the agreement. It is also important to agree who is going to be responsible for pursuing any rights infringement you or the licensee? Understand the difference between assigning your rights and licensing your right. By licensing your rights you are effectively permitting someone else to exploit those rights for a certain period of time, usually in return for a ROYALTY. After that period the rights revert back to you. If you assign your rights you are TRANSFERRING ownership of those rights for good.

What’s the difference between an exclusive, sole and non-exclusive license agreement?

1. Basically an exclusive licence restricts the licensor from granting a licence to anyone else AND exploiting those rights themselves. Thus, if you were to grant an exclusive licence to a retailer to manufacture and sell one of your designs, you would be restricted from doing the same yourself and you could not allow anyone else to manufacture or sell that design either.
2. The benefit of granting this type of licence is that the ROYALTY you receive is likely to be greater than the royalty you would receive if you granted a non-exclusive licence.
3. If you grant someone a sole licence, the only people allowed to exploit those rights are you and the licensee. You would not be allowed to grant a licence to someone else.
4. If you grant a non-exclusive licence you would still be able to exploit those rights yourself and you could allow others to do so. Although the ROYALTY you would receive under these terms would be less than under an exclusive licence, the benefit would be (subject to market demands and/or geographical restrictions in the licence itself) that there would be no limit on the amount of licensees you may appoint.

Financial provisions
Most important – always ensure that you fully understand who is paying what and how royalties will be managed. There are many companies who specialise in forensic license audits and who can advise you about the best way to ensure that you are getting what is rightfully due to you. Safeguards include regular audited communications of sales. The bottom line is that if what you are licensing proves to be a good product for a licensee they will want to ensure that the relationship is based, not only on agreed method of financial probity, but of trust and fairness. By rewarding the creativity that makes a design or artwork commercially successful for both parties this makes for a better long-term relationship. It is a short term and negative strategy when licensees do not fulfil their obligations and brings licensing into disrepute. A good safeguard is to speak to others with whom the licensee works – are they trustworthy? Do they honour royalties? What is their reputation with other designers?

Adaptations/Modifications
Often modifications or adaptations are necessary to take a product to market by a licensee so it is important that you establish and clarify who will be responsible for these and how much control you have as a licensor – what you don’t want to happen is for one of your products to be modified or adapted in a way that is not acceptable to you or your brand identity.

Territories and duration
What are the limitations for use and how long will the license run? Is it just for the UK or in other territories? This must be clear and unambiguous so that if there are any disputes you can always refer to the small print.

Termination
How do you intend to terminate the agreement? Try and consider bottom line scenarios so that you have clear guidelines, acceptable to both parties, if one party wishes to terminate the agreement. How much notice is necessary, what will be the conditions for termination?

How can Intellectual Property be used creatively and successfully?
A fantastic example of a successful, long term and developing licensing relationship is that of ACID members Arts Meets Matter with giants Penguin, owners of the iconic trade mark “Penguin Books”. Tony Davis, by recognising the natural affinity between books and coffee/tea drinking, pencils and deckchairs translated this into an exciting range of award winning products sold throughout the UK. Equally, Penguin books had the vision to see the potential of this synthesis. Tony Davis had not only the creative thought to broker the deal but the business savvy and acumen to make it happen. One of the most important aspects of any collaborative design work is the agreement upon which the relationship is based. ACID has worked with both product designers and manufacturers to produce a simple to read and user-friendly re-usable licence/royalty agreement which creates a level playing field between both parties. This is positioned as an industry standard agreement to which bespoke clauses can be added to suit both parties.  The most important aspect of any relationship is NEVER have to rely on the small print but in the unlikely event that you do, ensure that the small print works for you.  Details of ACID’s re-usable industry standard licensing/royalty agreement are available from the ACID Trading area.