License, Royalty & Revenue Agreements: Drafting, Monitoring and Auditing
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Lawyers involved in drafting license and other self-reporting contracts typically understand boilerplate provisions but not the financial nuances that are subject to high degrees of interpretation that eventually costs their clients significant money and business relationships. Billions of dollars are lost annually and significant litigation results from poorly drafted financial, monitoring, and auditing terms. Unfortunately, these shortcomings are generally not discovered until a royalty audit or in litigation, at which point it's often too late to undo the damage, leaving the licensor with no choice but to accept pennies on the dollar or the inability to terminate a poor agreement. In License, Royalty & Revenue Agreements: Drafting, Monitoring and Auditing, CPA Sidney Philip Blum navigates readers through the nuances of drafting the best possible financial terms for license and other self-reporting agreements and shows how proper monitoring and auditing should occur once a deal is in place. The 2014 Edition includes updated information on how to properly write the financial aspects of royalty contracts to protect the licensor, licensee, and other concerned parties. Additional sample terms and "real-world" agreements have also been included.
• Uniquely focused book that provides extremely valuable information about how to properly protect a party receiving self-reported information and identifies the opportunities for reasonable penalties when the contract is violated
• Written by an expert in third-party auditing with contract compliance experience
• Aids practitioners with guidance on how to avoid the pitfalls of licensing, from the beginning contracting phase through to monitoring and auditing
"Blum unites his accounting expertise with a clear understanding of contract law to expose deficiencies in common practices that will cause many readers to rethink their audit and reporting procedures and provisions. This is a valuable resource for intellectual property owners and their advisors who want to ensure they get what they bargain for out of their contracts."
--Kevin D. DeBré
Intellectual Property and Technology Transactions Practice Group Chair
Stubbs Alderton & Markiles, LLP
"A great peek inside the mind of one of the country's leading strategic auditors. Must-reading for anyone drafting or laboring under a self-reporting contract."
Professor of Law, UCLA
"Mr. Blum's treatise is the product of 25 years of front-line experience auditing royalty and other contracts for the biggest industry players. He has provided a valuable service to attorneys and accounting professionals by sharing some of his knowledge and insights with the rest of us. Cover your bases. Learn from the expert. Read this book."
O'Donnell & Associates, PC
"Financial Elements of Contracts delivers a thought-provoking, habit-challenging compendium of do's and don'ts for lawyers and business people alike. No matter where you sit on the chessboard of contracts, Sidney Blum's forceful text provides a critical rethinking of contact drafting and enforcement that will change the way you play the game."
--Lindsay Conner, Partner
Manatt Phelps & Phillips LLP
"Blum's background as an accountant in Los Angeles- -as well as his prior experience with a big accounting firm, a motion picture studio, and an oil company- -amply qualifies him to offer his insights to lawyers engaged in drafting, performance, and litigation of licensing agreements. This book is helpful for lawyers involved in drafting licensing agreements, monitoring the performance of agreements, or contemplating litigation when performance proves to be less than satisfactory."
--Paul D. Supnik
Los Angeles Lawyer
Table of Contents
CHAPTER 1 An Overview of License Agreements
CHAPTER 2 Why You Need to Monitor Licensees
CHAPTER 3 Types of Royalty Contracts and Reporting Risks
CHAPTER 4 Roles in Third-Party Monitoring
CHAPTER 5 Justification and Implementation of a Contract Monitoring Program (CMP)
CHAPTER 6 Key License Agreement Terms and Conditions
CHAPTER 7 Best Practices for a Licensee
Appendix A. Sample Brand License Agreement
Appendix B. Merchandise License Agreement
Appendix C. Trademark License Agreement
Appendix D. Technology License Agreement
Appendix E. Registration of Manufacturer
Appendix F. Royalty Statement
Appendix G. Settlement Letter (California)
Appendix H. Non-Disclosure Agreement
Appendix I. Third-Party Risk-Ranking Matrix
Appendix J. Notification of a Third-Party Audit Program
Appendix K. Notification of an Audit