Document type: Checklist Practice area: Intellectual Property — Entertainment and Media Jurisdiction: United States Last reviewed: 5 September 2026

Section 1 — Ownership diligence (before any grant)

  • Who created each element: text, illustrations, cover art, design, photographs, third-party material
  • Each creator an employee within the scope of employment, or a contractor?
  • For contractors: written agreement, and does any work-made-for-hire recitation fit a statutory category? For illustration and design it frequently does not
  • Present assignment as a fallback in every contributor agreement
  • Permissions obtained for all third-party material, with the scope confirmed
  • Trademarks registered for names and visual representations, in relevant classes and territories
  • Copyright registered
  • Any prior grant of the same rights, or any encumbrance
  • Any statutory termination notice served or imminent
  • Joint authorship risk assessed and resolved

Section 2 — The grant

  • Rights granted enumerated specifically: which of reproduce, distribute, display, perform, prepare derivatives
  • Media enumerated — resist "all media now known or hereafter devised"
  • Where broad media language is unavoidable: a right of first negotiation on new formats
  • Language and territory bounded
  • Term, and whether for the term of copyright
  • "All rights not expressly granted are reserved" — present
  • Reserved expressly: translation; dramatic, film, and television; merchandising and commercial tie-in; interactive and game; and character rights
  • Merchandising reserved where the character is the asset
  • Exclusivity, and its scope
  • Sublicensing rights, and approval over sublicensees
  • Options on future works: limited by genre, number, submission period, response period, and terms to be negotiated rather than matched

Section 3 — Reversion

  • Keyed to actual sales below a stated threshold over consecutive accounting periods — not to "out of print," which print-on-demand has made meaningless
  • Notice mechanism and cure period
  • Effect: which rights revert, and what happens to existing inventory
  • Measurement dates calendared at signature

Section 4 — The money

  • Royalty base: list price or net receipts, by format and channel
  • On net receipts, deductions enumerated exhaustively, and expressly excluding: overhead; marketing; distribution, fulfilment, or platform fees payable to the licensee or an affiliate; bad debt; currency conversion
  • Rate escalators by volume and format
  • Special and high-discount sales: threshold defined precisely and the proportion capped
  • Reserve against returns: capped as a percentage; liquidated over stated periods; disclosed in each statement
  • Advance: non-returnable except for non-delivery or breach; payment schedule; no cross-collateralization against other works
  • Subsidiary rights splits, with approval or consultation on material licences and a time limit for exploitation
  • Statement frequency and content: units by format and channel, price, deductions itemized, reserve taken and released, recoupment position
  • Late payment interest

Section 5 — Audit

  • Annual, on reasonable notice
  • Accountant of the licensor's choosing — not from an approved list
  • Access to underlying records, including sublicensee statements
  • Objection period long enough to permit an audit
  • Cost shifting at a stated variance, commonly 5% — the provision that makes audits happen
  • Right to audit sublicensees, or at least to receive their statements

Section 6 — Acceptance and delivery (publishing)

  • Standard: "professionally competent and fit for publication" — not "satisfactory in the Publisher's sole judgment"
  • Delivery date and extension mechanism
  • Review period, 30–60 days
  • Written editorial notice identifying deficiencies specifically
  • Cure period, 60–90 days, with a second review
  • Consequences of rejection: retention of advance instalments paid; the right to place elsewhere; repayment mechanics
  • Length, format, and file specifications
  • Permissions: who obtains and who pays
  • Author obligations: proofreading, index, promotion

Section 7 — Merchandising structure

  • Minimum guarantee: amount, instalments, recoupable, not refundable, sized to a realistic projection
  • Minimum performance: sales or royalty thresholds per period, with a stated consequence — loss of exclusivity, reduction of scope, or termination
  • Product categories enumerated specifically
  • Territory, with online sales addressed expressly: geo-restriction, prohibition on sales to known re-exporters, responsibility for third-party listings
  • Channels enumerated — not "all channels"
  • Direct-to-consumer addressed, including the royalty base for it
  • Exclusivity defined by category, channel, and territory, subject to performance
  • Carve-outs for the licensor's own sales and promotional use
  • Term, and renewal conditional on performance

Section 8 — Approvals

  • Stages: concept; design and artwork; pre-production sample; production sample; packaging and labelling; advertising; website and social use
  • Approval at the design stage, before tooling
  • Submission form and channel defined
  • Response period, 10–15 business days
  • Deemed outcome if no response — deemed disapproval with escalation to a named executive and a shorter second period is the workable compromise
  • Approval standard: reasonableness where achievable
  • No material change after approval without resubmission
  • Approved samples retained by both parties as the reference standard
  • Approval log maintained

Section 9 — Quality control

Not optional — failure to exercise control can result in abandonment of the mark.

  • Specifications for materials, construction, and finish
  • Compliance with product safety, labelling, and content regulation in every territory
  • Testing by an accredited laboratory, certificates provided before production
  • Inspection rights at manufacturing facilities, including subcontractors
  • Approved manufacturer list, with a right to require a change
  • Ethical sourcing and labour standards
  • Recall procedure, with the licensor's right to require one and the cost allocation
  • Style guide delivered — the asset that reduces the approval burden most

Section 10 — Warranties, indemnity, insurance

Licensor granting content rights:

  • Knowledge qualifiers on infringement and truth of factual statements
  • Indemnity triggered by final adjudication or an approved settlement, not by a bare claim
  • Cap at amounts received
  • Right to participate in the defence and to approve counsel and settlement
  • Coverage under the publisher's media perils insurance, as an additional insured
  • Limits on withholding: reasonable amount, after notice, for a defined period
  • Carve-out for publisher-supplied material and editorial changes
  • Survival limited to the limitations period

Merchandising licensor:

  • Licensee indemnifies for product liability, manufacturing, distribution, and its own advertising
  • Licensor indemnifies only for the property's clearance
  • Licensee carries product and general liability insurance, licensor as additional insured, stated limits, notice of cancellation

Section 11 — Termination and sell-off

  • Termination for cause, with no cure for unapproved product or a safety failure
  • Termination for insolvency, recognizing bankruptcy constraints
  • Termination for failure to meet minimum performance
  • Sell-off: 90–180 days; inventory statement within 10 days; royalties payable; no manufacturing after termination; no sales below a stated price
  • Post-sell-off: licensor's option to purchase inventory at cost; destruction of the remainder with certification; return or destruction of tooling, moulds, and artwork
  • Confirmation that no further product exists

Section 12 — Administration and the calendar

  • Licensee register: categories, territories, channels, terms, guarantees, thresholds, renewal dates
  • Conflict map, checked before any new grant in a programme
  • Approval log with samples retained
  • Royalty tracker with statement dates and objection deadlines
  • Market monitoring for unapproved product, out-of-channel sales, and counterfeits
  • Enforcement protocol: who issues takedown notices, who pays, who keeps recoveries

Calendar at signature:

  • Statement dates and objection deadlines
  • Reversion measurement dates
  • Minimum performance measurement dates
  • Renewal and non-renewal notice deadlines
  • Insurance renewals
  • The statutory termination window — thirty-five years from execution, with notice two to ten years in advance

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