If you are on Facebook you have probably seen Pusheen, the cat featured as e-stickers and little comic strips created by the site Everyday Cute. If you are a parent, you probably buy an insane amount of soft toys (i.e. “plush”), and if you have a 9-year-old like me, you have a growing collection of Pusheen plush. So many people ask me what I do when I tell them I am a licensing agent. I thought I would break it down and use Pusheen plush as a brand license example.
Pusheen plush was created via partnership with plush manufacturer Gund, a name that may sound familiar to you as everyone’s “Gotta Have a Gund”. Although I do not work with the owners of the Pusheen character property nor do I represent Gund, I thought a Pusheen Case Study would provide a great brand collaboration example of how a typical licensed product partnership works.
In this case, the creator/owner of the Pusheen trademark, designs and original content is the “Licensor”; the manufacturer of the plush Gund is the “Licensee”. Although each license agreement structure may deviate slightly from the norm, here are the basic roles and responsibilities the Licensor and Licensee:
1) Trademark: Licensor is responsible for trademarking the brand name Pusheen and any sub-brands, characters and trademark phrases associated with Pusheen, in all relevant classes of consumer products, and in all relevant territories where licensed product will be sold. The Licensor would do this through a lawyer and pay for all costs associated with trademark filing. The cost is not cheap, but if you plan on licensing your brand it’s the cost of entry.
2) Designs: Licensor provides design elements to be used on products and packaging including character renderings, color palettes, patterns, logos, packaging guidelines, character sayings (very relevant for comic strip properties like Pusheen) and any other do’s and don’ts for developing licensed products. More established licensors create something called a style guide to house all of this information in an organized and inspiring manner. A less formal approach for a new designer getting into licensing would be to keep materials needed for product development like patterns, logo files and other elements for packaging organized in a cloud file for licensees to use.
3) Copyright: Licensor is responsible for taking actions to file and obtain necessary copyrights for designs. Different lawyers have different opinions on exactly what needs a copyright. Just know that when signing a license you will need to represent that the designs and artwork you provide are original, so keep good files on how your work was created in the event someone claims your work was copied.
4) Marketing: Some Licensees will ask for a Licensor’s participation at trade events and in store consumer events for marketing purposes. When you are working on your first license you may want to ask about what is expected from you marketing-wise and, if travel is required, discuss who pays for travel up front. In general, whatever you were doing that got you to the point where you have your first licensing opportunity is something you should continue doing to market and promote your collaborations. So if you have stores and/or a social media following and /or you have ongoing press relationships, continue putting resources into those channels to promote your licensed products.
5) Approvals: Once you provide designs to the licensee, the licensee typically creates product concepts/renderings of the products for your approval. There are times when the licensee will ask you to take the first pass at product design, but that is not the norm in my experience. It’s best to establish a timeline and formal process to provide feedback on product renderings. Once you have given written approval, the licensee may show to retailers before creating product samples, or they may go straight into product sampling. A licensor will definitely need to approve samples before they go into actual final production, so make sure to establish a timeline and communication that provides for that. A licensor is entitled to final production samples as well. Fingers crossed, everything looks just as expected (or even better) if you are involved in the approval process from start to finish.
1) Manufacturing: The licensee is responsible for sourcing and manufacturing the licensed products and working with the license or to get approval during the development process. In the case of Pusheen, Gund is a big player in plush known for sourcing and manufacturing quality products, and therefore an excellent choice as a partner.
2)Design: Typically a licensee has an in house design team that will take the artwork provided by the licensor and develop concept renderings based on that work. Some licensees allocate more resources and are better at this than others, and the ones who are less creatively-inclined may require more involvement from the licensor to get the initial designs right.
3) Wholesale Sales: The licensee is responsible for wholesale sales to retailers. There are many ways in which licensees market to the trade to obtain retail orders including exhibiting at trade shows, traveling to see buyers at various retailers, having reps that visit retailers regularly, sending catalogs to key accounts. Many licensees have showrooms based in key areas like New York and Los Angeles. A good question to ask a prospective licensee is how they market to the trade. I will delve more deeply in how to vet a licensee in future Free Licensing Advice posts.
4) Prompt payment of fees/royalties to Licensor: In the case of a standard license agreement, the licensee usually pays licensor a royalty based on wholesale sales of licensed products shipped. This is usually done on a quarterly basis and the licensee will issue a report to the licensor with a payment within 15-30 days after the quarter closes. There could be deviations from this payment structure, but this is the most standard one.
I hope this example helps to outline the basics of who does what in your typical licensing partnership. I would love to know if this info is helpful and what kids of questions you have for future free advice posts.