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Reseller Distribution Agreement

A Reseller or Distribution Agreement governs how products are marketed and sold through intermediaries, defining territories, pricing, and performance expectations. This playbook explains negotiation levers around exclusivity, revenue targets, and brand protection.

Intellectual Property Rights

Why This Matters: IP disputes can be costly and hinder business operations. Explicit IP terms prevent misunderstandings and ensure freedom to operate.

Negotiation strategy

If you're the Manufraturer:

Ensure that all pre-existing IP remains with the company and negotiate for joint ownership of any IP developed during the contract. Secure broad usage rights to leverage the IP fully.

If you're the Distributor:

Negotiate to retain ownership of any IP you create and seek a fair compensation for any IP that is jointly developed. Limit the scope of licenses granted to protect your interests.

Essential elements

1

IP Ownership

Defines who owns the IP.
2

Licensing Terms

Outlines scope of licenses.
3

Usage Rights

Specifies how IP can be used.

Action framework

ACCEPT

Propose edits if the IP allocation does not reflect the agreed terms or if the licensing scope is too broad.

EDIT

Reject if the clause assigns all IP rights to one party without fair compensation or joint ownership terms.

ADD

Add language to clarify joint ownership or to specify licensing terms if missing.

PRO TIP

Always ensure IP clauses are clear and reflect the true intent of both parties to avoid future disputes.

Example clauses

FAVORABLE

Balanced IP Ownership Clause

"Each party retains ownership of its pre-existing intellectual property. Any intellectual property developed jointly shall be owned jointly, with each party having an equal share."
NEUTRAL

Standard Licensing Clause

"Licenses granted herein are non-exclusive, non-transferable, and limited to the scope of this agreement."
UNFAVORABLE

One-Sided IP Assignment

"All intellectual property created during the term of this agreement shall be owned by the party that creates it."

Fallbacks

Joint Ventures

In joint ventures, ensure joint ownership terms are equitable and reflect contributions of each party. Consider future commercialization and licensing opportunities.

Cross-Border Agreements

For cross-border agreements, consult with local counsel to ensure compliance with relevant IP laws and consider potential jurisdictional issues.

High-Risk Projects

In high-risk projects, ensure that IP ownership and licensing terms are clear to mitigate potential disputes and protect investments.
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