Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Talking Business: An ethical approach to working with licence partners

Alice Stagg is a senior associate in the intellectual property department at law firm Wragge Lawrence Graham & Co

Alice Stagg is a senior associate in the intellectual property department at the law firm Wragge Lawrence Graham and Co LLP.

Alice Stagg

Following the second anniversary of the tragic Rana Plaza factory collapse in Dhaka, Bangladesh, which killed more than a thousand people, many companies will be re-evaluating not only their own manufacturing supply chains, but also those of their partners.

How should brands and retailers approach the particular challenges raised by clothing licences? The usual answer for a licensor is to look to commit its licensees to contractual provisions addressing ethical sourcing.

Negotiating a mutually acceptable solution can be complex, however. Merchandising agreements may involve collaborations between two large organisations, each with its own respective and well-established sourcing principles.

Such codes include requirements, for example, that factories ensure safe working conditions for their employees, that they do not use child labour, and they pay their workers living wages. A brand may also want to include contractual obligations addressing auditing and inspection of the factories used to produce licensed articles, and how the licensee should respond if any problems arise.

It is not necessarily practically straightforward for a large retailer to accept the licensor’s demands. Its sourcing policies and process will have been considered carefully by many stakeholders within the organisation and ultimately adopted at board level. A retailer may be engaging the same factories to produce both own brand and licensed product, potentially for more than one licensor. They will want to present their suppliers with a cohesive and clear set of requirements across the full range of articles which are being produced.

Companies may in addition, or alternatively, refer to the ethical sourcing principles published by third-party organisations. The Base Code of the Ethical Trading Initiative (ETI) is founded on the conventions of the International Labour Organisation. ETI members range from multinationals such as Inditex and Asos.com to international trade union bodies including Traidcraft and development charities such as Oxfam.

Reaching agreement on the appropriate contractual requirements is, of course, just the starting point. Over the life of an agreement, it is the way in which compliance with these obligations is measured, monitored and communicated which proves central to an ongoing relationship between licensor and licensee or between supplier and customer.

Alice Stagg is a senior associate in the intellectual property department at the law firm Wragge Lawrence Graham and Co LLP.

Alice Stagg

Following the second anniversary of the tragic Rana Plaza factory collapse in Dhaka, Bangladesh, which killed more than a thousand people, many companies will be re-evaluating not only their own manufacturing supply chains, but also those of their partners.

How should brands and retailers approach the particular challenges raised by clothing licences? The usual answer for a licensor is to look to commit its licensees to contractual provisions addressing ethical sourcing.

Negotiating a mutually acceptable solution can be complex, however. Merchandising agreements may involve collaborations between two large organisations, each with its own respective and well-established sourcing principles.

Such codes include requirements, for example, that factories ensure safe working conditions for their employees, that they do not use child labour, and they pay their workers living wages. A brand may also want to include contractual obligations addressing auditing and inspection of the factories used to produce licensed articles, and how the licensee should respond if any problems arise.

It is not necessarily practically straightforward for a large retailer to accept the licensor’s demands. Its sourcing policies and process will have been considered carefully by many stakeholders within the organisation and ultimately adopted at board level. A retailer may be engaging the same factories to produce both own brand and licensed product, potentially for more than one licensor. They will want to present their suppliers with a cohesive and clear set of requirements across the full range of articles which are being produced.

Companies may in addition, or alternatively, refer to the ethical sourcing principles published by third-party organisations. The Base Code of the Ethical Trading Initiative (ETI) is founded on the conventions of the International Labour Organisation. ETI members range from multinationals such as Inditex and Asos.com to international trade union bodies including Traidcraft and development charities such as Oxfam.

Reaching agreement on the appropriate contractual requirements is, of course, just the starting point. Over the life of an agreement, it is the way in which compliance with these obligations is measured, monitored and communicated which proves central to an ongoing relationship between licensor and licensee or between supplier and customer.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.