LICENSING INFORMATION AND IDEAS TO BETTER YOUR BUSINESS

J u n e 1 4 A Global Perspective: Looking for a Rebound From Tough Times 2011 As the U.S. economy makes its way through the early stages of a slow but steady recovery, there is every reason to believe that the licensing business is beginning on that same path. Anecdotal evidence WHAT’S INSIDE indicates that – after a long period in which many potential agreements seemed to be frozen by uncer- tainty about economic conditions, as well as retail conservatism – the atmosphere in the U.S. is more positive. Retail sales are creeping up, and business seems to be on the upswing. The Legal Corner: In the following pages, we’ve asked LIMA’s Managnig Directors and representatives from around the The Importance of Maintaining world to give a picture of conditions in their local licensing markets. Brand Standards Page 2 Japan Charity Campaign: 2:46 p.m. on 11th March 2011 is a moment in time that will “I Give Because I’m Grateful” remain etched on Japanese minds forever -- the unprecedented Page 3 triple crisis of an earthquake, tsunami and nuclear accident in To- hoku and Fukushima. The TV images were indescribable, the num- Nominees for the 2011 bers inconceivable -- a magnitude 9 earthquake, nearly 10 meter- International Licensing high tsunami waves, over 15,000 deaths, more than 9,000 missing, Excellence Awards 5,000 injured, over 125,000 buildings damaged or destroyed, in- Page 8 frastructural damage estimated at JPY25 trillion (US$306 billion). At retail, lost sales has been estimated to be ¥18 trillion (US$220 billion); that represents 3.3% of overall annual Japanese Comment Deadline Approaching retail economy. on Marketing Food to Kids For the Japanese licensing industry, whilst there are of course Page 9 serious consequences in terms of plummeting royalty income, the licensing community here is pulling out all stops to help the survivors, particularly children, through Please turn to page 4 The flip Side SHOWING WHY LICENSING IS SUCH A VITAL TOOL By Charles Riotto, President Page 11 Another Licensing International Expo will soon be upon us -- our chance to show the global business world why licensing is such a vital tool for driving sales of Welcome, New Members retail merchandise and services. As always, LIMA will be in the forefront with Page 12 a full range of programs to provide information and knowledge on current trends and happenings, as well as the industry’s premier networking event for connect- ing with friends new and old. Once again we will be kicking off this year’s show with a dynamic Keynote Presentation on the global marketplace, delivered this year by Rick Darling, presi- dent of LF USA. In his role at the center of global sourcing and marketing, Rick has a unique perspective on the challenges and opportunities facing suppliers, brand owners, retailers and others. “The New Realities of the Global Consumer Product Marketplace... In- flation, Consumption & the Global Consumer” will take place at 8:45 on Tuesday morning before the Show www.licensing.org Please turn to page 9 THE LEGAL CORNER The Importance of Maintaining Brand Standards By Jed Ferdinand, Jeffers Cowherd P.C. There is an inherent tension in every mer- jewelry line: “the Marks are and shall be chandising program. Brand owners strive associated with a first-class prestige luxury to maintain product quality in an effort to image that is equal to or greater than the ensure that the goodwill associated with image of the most prestigious fine jewelry their valuable brands is not diminished by brands and designers sold in jewelry spe- THANK YOU substandard products or improper distribu- cialty stores such as Tiffany’s and depart- tion channels. On the other hand, licensees ment stores such as Saks, Neiman Marcus, We would like to thank want the freedom to develop products and Bergdorf Goodman and Bloomingdale’s ….” the outgoing members to sell through the broadest possible dis- Brand standard clauses like these are of- of the LIMA Board of tribution channels in an effort to maximize ten found in celebrity and fashion licenses, Directors for their revenues. where maintaining a first-class image is These considerations are not limited to critical. To that end, it is very common to dedication and hard luxury and high-end brands – virtually all see specific references to famous brands work: licensors are concerned with maintaining or designers used as the brand standard brand standards for quality and image. by which licensed products are measured Adam Beder, How does a licensor protect itself? Trusting against. Yet, there is no reason that this Spin Master Ltd. the licensee to do the right thing is not good type of provision could not be used in li- enough. A properly drafted license agree- censes for mid or lower-tier products as Rick Mallow, ment is the only way. If strong and clear well, so long as the licensor identifies com- Making Connections, brand standard protections are not includ- parable brands and lists them as the brand LLC ed in the written license agreement, they standard. may as well not exist because the licensee Quality Acknowledgement: As a won’t be bound by them. corollary to the brand standard clause, the Maura Regan, There is a fundamental legal requirement license agreement should also contain an Sesame Workshop of trademark and brand licensing that the express recognition by the licensee that if licensor must exercise a certain degree the licensed products were of inferior qual- Stu Seltzer, of control over the quality of the licensed ity in design, material or workmanship, Marketing on Demand products or risk that the license is deemed a it would impair licensor’s goodwill.There LLC “naked license,” which may result in aban- should be an express representation that donment of the licensor’s rights. But this the licensed products shall of “high standard Holly Stein, Mattel column will focus on the practical impli- and of such style, appearance and quality” cations of brand standard protections, not to protect and enhance the licensed brand the legal ones. The intent is to give brand and maintain the related goodwill. It is also Robert Strand, Strand owners a checklist of provisions related to important to prohibit the licensee from sell- IP the protection of product quality and brand ing damaged or defective merchandise, or image. products considered “seconds” based on Careen Yapp, Brand Standard Clauses: The industry standards. Konami Digital most direct way to address the issue of Product Approvals: Licensors Entertainment brand image is to include a clause in the should have full approval rights throughout license agreement requiring the licensee the entire production process. Depending to maintain a specific and defined brand on the type of licensed product, this could standard that compares the licensed brand include: (1) design or concept approval; (2) with other brands or names particular retail prototype approval; (3) pre-production ap- stores. Here is an example of a brand stan- proval; and (4) post-production approval, dard clause from a license for a high-end Please turn to page 11 2 www.licensing.org CHARITY COMMITTEE “I Give Because I’m Grateful” By Cheryl Stoebenau, Charity Committee Co-Chair

This year’s fundraising campaign theme Children’s Brain Tumor Tissue Consortium. STATISTICS by funding the Children’s Brain is “I Give Because I’m Grateful.” I’m sure Brain and Spinal Cord Tumors are the Tumor Tissue Consortium. Tissue Banks are that most of us can find many reasons to deadliest of pediatric cancers. This disease the way other forms of cancer have made so be grateful in our lives --- and many of you randomly reaches out and strikes perfectly much progress and we have every reason to have also found a reason to give! healthy kids. One-third of the children af- believe that the results of the Consortium Thanks to the generosity of those who flicted with this type of cancer die within will help in speeding a cure for this disease. have already donated, I am pleased to say five years. Those who survive face long- One hundred percent of the money we that we are very close to raising $600,000 – term effects that profoundly challenge raise is used to fund the Children’s Brain 60% of the way to achieving our 2011 goal them throughout their lives. As a parent, Tumor Tissue Consortium. It costs $1,000 of reaching $1,000,000. This is a wonder- imagine how you would feel to hear that to collect and process each tissue sample. ful attribute to our industry! A very special your child has been diagnosed with this In order for researchers to conduct a mean- thank you to those who have donated and disease ---- and then you hear those devas- ingful analysis of the more than 100 differ- to the Charity Committee for their dedica- tating statistics. ent types of pediatric brain and spinal cord tion and support of our efforts to fund the Together, we are going to CHANGE THESE tumors, they need to process 3,000 tissue samples. Munchkin Inc., The NPD Group Inc., Random Without LIMA’s support this research will LIMA Donor List House, Rubie’s Costume Co., Sakar Inter- not be funded. The quicker we can raise national Inc., Scholastic Media, Simon & the money needed to support the Consor- PLATINUM LEVEL Schuster, Spin Master Ltd., Surge Licensing, tium, the sooner we will see positive re- American Greetings Corp., Cartoon Network, Toys “R” Us Children’s Fund sults, bringing hope to the kids and families JAKKS Pacifics Inc., Jay at Play International, who are afflicted by this terrible disease. ADDITIONAL CONTRIBUTORS Jay Franco & Sons, Inc, LF USA, Mattel Inc, I hope it is clear why it is so important Accessory Innovations, Art Impressions Inc., Nickelodeon & Viacom Consumer Products, that we rally together to fight this disease. The Northwest Company, Playmates Toys, Bandai America, Basic Fun, Greg & Susan If you have not already donated to this Warner Bros. Consumer Products Battersby,The Beanstalk Group, Bob Cassata, Brand Central LLC, Martin & year’s campaign, won’t you please help us GOLD LEVEL Barbara Brochstein, Gary & Mickey Caplan, fund the Consortium as quickly as possible? DecoPac, DreamWorks Animation SKG, Children’s Apparel Network, To make a donation visit www.licensing.org MZBerger & Company, Saban Brands and Jennifer Coleman, Collegiate Licensing and click on LIMA Cares. Please give as Saban Family Foundation Company, Commonwealth Toys, Direct generously as you can. Checks Unlimited, Entertainment Licensing SILVER LEVEL Associates, Jeanne Donovan Fisher, Fog ACI International, Bioworld Merchandising, Studios Inc., Global Design Concepts, Inc., CAS Marketing, Disney Consumer Products, Harris-Sachs, Henry Unger & Associates, Rita Franco Manufacturing, Hasbro Inc, Target Bonnell Illig, Liz Kalodner, Jenifer Kramer, Corp. Michael & Bonnie Lane, The Licensing Letter, Licensing Street, Maggie Young & Associ- BRONZE LEVEL ates, Making Connections, Andre Lake Mayer, Added Extras, LLC, AmScan, Inc., Bakery Moret Intimates, Tobin Opheim, Peachtree Crafts, Bentex Group Inc., Berkshire Fashions, Play Things, Charles Riotto, Beth Schlansky, Greg & Leigh Anne Brodsky, CBS Consumer Stu Seltzer, Thermos LLC, Trends Interna- Products, CSS Industries, Cherokee Inc., tional, Elan-Polo, Frankford Candy, Freeze, Funrise USAopoly, Mary & Jan Verdegaal, The Wild- Toy Corp., Handcraft Manufacturing, Horizon flower Group, Earl Winthrop, Zak Designs Inc. Group USA, Jerry Leigh Apparel, KIDdesigns, The Joester Loria Group, Lucasfilm, (As of May 16) www.licensing.org 3 GLOBAL OUTLOOK CONTINUED FROM PAGE 1 many and varied charitable activities. One notable change is that not only the For example, “Project: Holding Hand” kids market, but also the adult market, has (“Te wo tsunago” in Japanese; website begun to embrace licensed products. From www.teotsunago.com) has brought to- 2009, several popular clothing chains in gether more than 30 Japanese and foreign China started to take in licensed brands to popular characters in an graphical image appeal to a young generation. For example, showing all the characters holding hands, Transformers/ Kung Fu Panda has been fea- the aim being to bring smiles and encour- tured by Metersbonwe, one of the largest agement to children and adults affected by apparel brands, which operates 3,000 chain the disaster. stores in China. The special lines of MTEEs Another case is LIMA Japan member, (T-shirts of Metersbonwe) based on these Ingram, which runs the “Peace Project” licensed characters have become very pop- (website: www.peace-project.net), a char- ular in China and largely exceeded sales ity program. Since the outset of the disas- projections. Also, clothing chains such as ter, Peace Project members have visited UNIQLO, Baleno, and others are cooperat- the disaster area weekly delivering lifeline ing with licensed brands. For example, this supplies such as food and clothing. For the summer UNIQLO has a new Graphic T-shirts Besides well-known longer term task of re-building the region, line with Care Bears. Ingram is now considering a new charity Another notable change is that the cross- scheme whereby a portion of sales, as a over between licensing and other industries international licensed “charity royalty”, from products carrying is deepening. In many respects, we can say a “JAPAN Rebuilding with Hope” symbol that licensing is shaping up as a traditional hangtag (image on page 1) will be donated industry. For example, Guangzhou Alpha, brands, local brands are to the region. originally a local toy company, has trans- LIMA Japan is also considering participa- formed itself into one of the leading anima- tion in the “JAPAN Rebuilding with Hope” tion companies in China through a public catching up and thriving in initiative. Any LIMA members worldwide stock offering, and last year it acquired a who are interested in cooperating with the kids TV channel, and this year it acquired a scheme, please contact info@limajapan. kids apparel company. China. org. In the past decade, the new economy Fumihiko “Pochi” Kusama represented by Internet, new media, E- Managing Director, LIMA Japan commerce, and so on has achieved explo- sive growth in China. In the new decade, when licensing -- the new business model -- meets the China market, the 2nd largest China economy and the largest emerging economy China’s licensing market has experienced in the world, there is boundless potential. impressive, positive growth since the glob- Sherry Rao al financial crisis in 2008, due to surging do- Managing Director, LIMA UK mestic demand, economic structure change and creative industry development. How does the market look in 2011? As a new business concept, licensing is be- Germany coming more popular and well accepted by The development of the licensing indus- more local companies. Besides well-known try in Germany as well as its neighbors Aus- international licensed brands, local brands tria and Switzerland appears strong. Even are catching up and thriving. The most pop- at second glance. ular local licensed brand is “Pleasant Goat The industry was able to ride out the lat- and Big Big Wolf,” which garnered a couple est global crisis thanks to its innovative po- hundred licensees and created millions in tential. Positive results have been achieved revenue. Please turn to page 5 4 www.licensing.org GLOBAL OUTLOOK CONTINUED FROM PAGE 4 UPCOMING EVENTS in toys, publishing, food and textiles. The topics of virtual worlds and new apps also India Licensing Forum 2011 offer new growth potential for licensing. Brand licensing is a relatively new in- 6/22/11 As with everything, there is also a down- dustry in India. Since the success of brand World Trade Center - Barcelona (Spain) side. The industry as such is faced with licensing is heavily dependent on the retail http://www.key4communications.com/www/key4/en/forum/ enormous challenges, even possibly a com- roll out, it becomes pertinent that the re- plete change. The most important indica- tail industry be on board with the licensing tors for this development are the changes program. To share with all of you, organized Licensing Japan in the thought process and the restructuring retail is a relatively recent phenomenon in that started in China in 2007. India and while growing, it accounts for 7/7/11 to 7/9/11 Germany’s licensees have followed the only 6% of total retail. Estimates put the Tokyo Big Sight - Tokyo (Japan) example of many international groups in retail industry’s size at $450m of which only www.licensing-japan.jp/en/ the toy and textile industry, starting to use 5% is contributed by the organized sector. production facilities in China. Now, they It is also understood that rapid economic need to reposition themselves given the growth in the past decade has augmented Seoul Character & Licensing Fair competitive situation around those produc- the disposable income of the middle class 7/20/11 to 7/24/11 tion facilities. and it is the urban consumer that the global Coex, World Trade Center - Seoul (KR) It is a fact that the industry is faced with chains are eyeing. www.characterfair.kr huge challenges in the wake of China’s The Q311 BMI (Business Monitor Inter- wage increases and shipping bottlenecks national) India Retail Report forecasts that resulting from the Asian quality initiative. total retail sales will grow from INR19.0trn Comic-Con Experts believe that there is no plan B yet (US$395.96bn) in 2011 to INR30.23trn 7/21/11 to 7/24/11 to meet the requirements of international (US$785.12bn) by 2015. Strong underlying companies when it comes to production economic growth, population expansion, San Diego Convention Center - San Diego, CA (US) know-how, infrastructure, quality and safe- the increasing wealth of individuals and www.comic-con.org ty requirements. the rapid construction of organized retail The leaders of the German (licensing) in- infrastructure are key factors behind the New York International Gift Fair dustry, however, do not consider the situa- forecast growth. tion to be unsolvable. New concepts are in While the licensing figures are miniscule 8/13/11 to 8/18/11 the works which take the new situation into when compared to other international mar- Jacob Javits Center - New York, NY (US) consideration, connect markets and render kets, India is fast establishing itself as a www.nyigf.com manufacturing more economical. strong potential market in the future world International brands are hot and the trend of licensing. Licensing in India is definitely is pointing in the direction of “grown-up on the rise and is to be valued at US $500 Franchising & Licensing Licensing Asia brands” which still have enormous growth million in 5 years to come. The opportuni- 9/8/11 to 9/10/11 potential. It is said that in this country, the ties in licensing are limitless in India and Marina Bay Sands - Singapore impacts of global market crises as well as we have just seen a trailer yet! www.franchiselicenseasia.com ecological disasters are neither reflected in Vrinda Oberai prices nor sales figures in licensing, with LIMA India/License India the exception of the increased price for cot- ton. Yet the situation remains challenging. Fall Toy Preview Current times require entrepreneurial 10/4/11 to 10/6/11 flexibility and creativity both of which will Italy Dallas Market Center - Dallas, TX (US) act as a fresh impulse for the industry. And The licensing industry in Italy has its www.toyassociation.org we are eagerly awaiting new TV formats main focus not on entertainment, but on and blockbusters (especially from the US) brands based on automotive/fashion and which will not only spark business but also sport, which account for more of the 60% Brand Licensing Europe 2011 of licensed products retail sales. our imagination, creativity and belief. 10/18/11 to 10/20/11 Heike Winner Italy is the 4th largest EU market for li- Managing Director, LIMA Germany censing, and the past year has been an ex- The Grand Hall, Olympia - London GB Please turn to page 6 www.brandlicensing.eu www.licensing.org 5 GLOBAL OUTLOOK CONTINUED FROM PAGE 5 citing period, based on the following crucial sians’ income was disposable, vs. around aspects: “New Europe” 40% for a typical Western consumer, mak- • Based on the decision by main toy New Europe encompasses the 35 coun- ing it a very attractive market for FMCG, industry leader Preziosi Group to tries and 400 million people of Central, food and beverage products, apparel, and open distribution and licensing for Eastern and South East Europe, Russia and luxury goods). pre-school products, there is finally a the Commonwealth of Independent States. The Ukraine, with 47 million people, sixth new interest from licensees in other It’s not a uniform region, but rather includes largest in Europe, is the fastest growing re- kids categories (such as apparel and a mix of relatively mature markets that tail market in Europe. The share of chains stationary mainly) for this target aren’t expect to grow quickly and emerg- is still low and there is significant potential market, which is historically under- ing markets for whom growth prospects are for further development of modern formats. estimated in Italy. much better. Turkey, with a growing population already • A massive growing interest from Total consumer spending for the whole in excess of 70 million, is likely to emerge fashion industry, of high and medium region is expected to be US$2,206 billion. as one of the world’s highest potential con- profile, to extend the development of Russia, Turkey and Poland are predicted to sumer markets and strongest performing their brands into several licensing account for 79% of the region’s retail sales economies in Europe over the next decade. categories, not only fashion. this year. The estimated consumer spending level of • An increasing number of consumer The IMF expects the central and east- US$ 6,977 in 2010 is expected to reach US$ products companies are interested ern European economies to grow at 4.5% 12,948 by 2014. in manufacturing licensed goods, in this year and next. Tough measures in re- In many ways, this part of the world of- many cases pushing the envelope solving the region’s crisis have meant that fers investors advantages over other emerg- to create unique designs and origi- eastern Europe looks better off fiscally and ing markets and can be a promised land for nal products for the local market. structurally than the Eurozone economies. licensing business. The starting position of The goal: to renew and refresh their Much of the region was pulled from reces- the majority of properties is the same and product lines, and at the same time sion in large part by Germany’s export-led market success does not belong exclusively enlarge their retail footprint. economic recovery. This was especially so to large companies. For international play- • More and more brand owners and in the Czech Republic, Hungary, Poland and ers, there is an opportunity to catch the next TV producers don’t want to delegate Slovakia. growth wave in New Europe countries from licensing management to agencies, In 2010, the Polish economic growth rate the very beginning. but rather keep that business in- was 3.8 %, one of the best results in Eu- Željko William Krnjak house. In the last few months, this rope. With 38 million people, Poland is the LIMA New Europe has created a huge market for licens- biggest market among the new EU coun- ing professionals and new job oppor- tries. Its population in 2010 is also one of tunities in our territory. the youngest in Central and Eastern Europe, • Broadcasters are starting to find the with more than 38% of all citizens in the Southeast Asia way to cooperate with licensees 20-44 age group -- crucial for retail sales. Licensing activities in Asia have grown to strengthen the awareness of TV In 2010, the retail market in Russia re- rapidly in recent years. Apart from China, brands, having understood the busi- covered after the previous year’s economic the Southeast Asian markets have also ness opportunities based on mutual slowdown, increasing by 12.6% to $541bn. recorded robust growth, especially in co-operation. Each Federal District (Central, Volga, South- countries like Vietnam, Indonesia and Thai- So, despite an economic crisis which still ern, Siberian, Urals, Northwestern and Far land. In general, the licensing landscape in lives in Italy, a lot of things are changing East) enjoyed an increase in retail sales of Southeast Asia in 2011 is competitive and and moving, and we’re pretty sure that we at least 8%. Moscow and Saint Petersburg promising. will meet brand new companies and very still account for the lion’s share of retail Throughout the region, entertainment is well established companies that will jump spending and sales growth, with about 38 the biggest licensing category. Despite the into the licensing Jungle! percent of the country’s total. fact that local governments in Singapore Christina Angelucci Russian Federation GDP increased by 4% and Thailand have been pushing local pro- LIMA Italy/License Italia in 2010 and is forecast to rise by a further duction, Western and Japanese properties 4.2% in 2011. This will have a positive ef- are dominating the licensing industry. Con- fect on consumer spending in both food and sumers are also receptive to sports brands, non-food retail sectors. events and teams, leading to a healthy (Until the financial crisis, 70% of Rus- Please turn to page 7 6 www.licensing.org GLOBAL OUTLOOK CONTINUED FROM PAGE 6 growth in sports licensing. ensure the success of a property. The Taiwan market is almost stagnant. Concerning the most successful proper- The Japan earthquake and tsunami hit the ties, SpongeBob is expected to lead sales licensing industry as many manufacturing in 2011, after a surprisingly great 2010. companies are trading in Japan. According to forecasts by the companies As for Hong Kong, the overall licensing participating in our market analysis, Cars 2 sector is as dynamic as the city itself. The should also have a great presence in this “kidult” market is becoming prominent and year licensing business. companies are switching to digital market- Jana Robles ing and social networks to reach their au- LIMA Spain/Edicones Just diences. Licensing in mobile applications has just started. We foresee more and more companies will be looking into this area for brand building and promotion. UK Tani Wong So what’s happening out there in the UK? Managing Director, LIMA Southeast Asia The background looks pretty bleak. Perhaps surprisingly, though, the overall mood re- mains upbeat: the UK licensing trade ex- pects something to pull us out of recession Spain sooner rather than later. The UK licensing trade In spite the difficult economic situation, That said, there are several indicators of the licensing market in Spain has remained a weak marketplace. Last month, accoun- strong in 2011. According to the market sur- tants Ernst & Young issued a report predict- expects something to pull vey annually published in Licencias Actuali- ing that total spending will not recover to dad, licensees confirm that sales have risen pre-recession levels until 2013. High levels between 10 and 20%, although rotation of of personal debt, restricted lending, high us out of recession sooner products has been lower. inflation and the prospect of higher interest The licensing business in Spain encom- rates are all contributing to a lack of con- passes about 800 licensees and 45 agents sumer confidence. rather than later. and owners. Distribution is characterized by This is backed-up by a survey by the Brit- a large percentage of traditional indepen- ish Retail Consortium (BRC) showing that dant retail stores plus a growing mass mar- April’s Royal Wedding spending boost was ket segment, where we can find national cancelled out by a poor March, leaving a and international groups such as El Corte flat overall performance. The underlying Ingles, Carrefour or Alcampo. This depen- economic situation is one of weak spending dence on mass distribution has shortened and pressure for retailers, and the number the life cycle of many properties to one or of people visiting shops in March and April two years at most. fell by 0.8 per cent from a year ago. The role played by licensed product is Members are telling us similar stories. also higher in Spain than in many other The message from several licensing agency countries. According to data compiled by members is that they are cutting all but the NPD, the market share of licensed toys essential expenditures as deals are hard stood at 34% of the total traditional toy to come by. One large food company told business, compared to 32.6% in 2009. The me that only retail price cuts were driving licensing business grew by 3.3% in value, sales, another feared that commodity pric- while the unlicensed toy fell by 0.7%. es must be passed on at long last to retail- Although the market behavior is quite ers as margins are unsustainable – which good, there are also some challenges. The will not help in these circumstances. main problems identified by licensing pro- Kelvyn Gardner fessionals are high prices, increasing com- Managing Director, LIMA UK petition and over-reliance on television to www.licensing.org 7 NOMINEES FOR THE 2011 INTERNATIONAL LICENSING EXCELLENCE AWARDS

Best Art or Design Program Best Film, Television, Celebrity, or Entertainment Licensee – Andy Warhol, The Andy Warhol Foundation for the Visual Arts Hard Goods Artkey’s Qi Baishi, Artkey Co., Ltd. The Bridge Direct, Inc., dba The Bridge, Justin Bieber/dolls Shopaholic, Too, Designs by Lolita, Inc./Out of the Box Licensing Konami Digital Entertainment, Inc., Karaoke Revolution Glee The Smiley Pop Art Style Collection, The Smiley Company Learning Curve Brands, Chuggington/die-cast toys Victoria and Albert Museum, Victoria and Albert Museum/V&A Enterprises LEGO, Harry Potter/construction sets & Hogwarts board game Rubie’s Costume Co., Inc., Lady Gaga/costumes & accessories Best Art or Design Licensee Creative Tops, Victoria and Albert Museum/ceramics Best Film, Television, Celebrity, or Entertainment Licensee – Dom Pérignon, Andy Warhol/champagne Soft Goods Santa Barbara Design Studio, Lolita/glassware Awake, Inc, Glee/apparel Smiley Factory Ltd., SmileyWorld Vintage/apparel Jay Franco & Sons, Inc., Toy Story 3/bedding, bath & beach Mighty Fine, Alice in Wonderland/apparel Best Character or Toy Brand Program Mighty Fine, Toy Story 3/apparel Hello Kitty, Sanrio, Inc. National Entertainment Collectibles Association, Inc, The Twilight Saga: Eclipse/ Minnie Mouse, The Walt Disney Company apparel & accessories Peppa Pig, eOne Entertainment Skelanimals, Skelanimals, LLC/Art Impressions, Inc. Best Sports or Sports-Themed Entertainment Program 2011 Bridgestone NHL Winter Classic, National Hockey League Best Character/Toy Brand Licensee–Hard Goods ESPN, ESPN Fisher-Price, Inc., TRIO DC Super Friends Batcave NASCAR Team Properties, NASCAR and Teams JAKKS Pacific, Inc., Big Buck Hunter Pro/TV games & Wii title PGA Tour, PGA Tour, Inc. Kellogg Company, Scrabble/Cheez-It PPW Toys, Mr. Potato Head Affinity Program Best Sports or Sports-Themed Entertainment Licensee smart USA, Hello Kitty/car wraps for the smart fortwo Cycle Force Group, Tour de France/bicycles & accessories JAKKS Pacific, Inc., Ultimate Fighting Championship/action figures, playsets & role play Best Character/Toy Brand Licensee–Soft Goods K’NEX, NASCAR/building sets São Paulo Alpargatas S.A./Havaianas, Woody Woodpecker/flip flops PB Teen, NFL/bedding Jay Franco & Sons, Inc, Mickey Mouse/bath program Sportcraft, ESPN/indoor & outdoor recreation Loungefly, Hello Kitty/junior accessories Best Licensed Promotion Best Corporate Brand Program Burger King’s The Twilight Saga: Eclipse Ultimate Experience, Summit Entertain- Animal Planet, Discovery Communications/The Joester Loria Group ment/Striker Entertainment ASPCA Private Label Brand, American Society for the Prevention of Cruelty to Animals Chuggington Traffic Safety Cross-Platform Promotion, Ludorum/Super RTL JCB, J C Bamford Excavators Limited/JCB Consumer Products Dove Glee For All, Twentieth Century Fox Film Corp. Jelly Belly, Jelly Belly/The Licensing Company Gillette Fusion ProGlide Limited Edition Armed Forces Licensed Razor Program, The Stanley Works, Stanley Black & Decker/Beanstalk U.S. Army, Navy, Air Force, Marines, Coast Guard Green’s Free Irwins Apron, Irwin Family Mr. Happy Should’ve Gone to Specsavers, Chorion Best Corporate Brand Licensee SGI Apparel & Kohl’s Bakugan Gift with Purchase Program, Nelvana Enterprises/ Baccus Global, LLC, The Stanley Works/lighting & 12 volt automotive accessories Cartoon Network Enterprises Ginsey Home Solutions (aka Ginsey Industries, Inc.), Rubbermaid/designer bath mat collection Nouveau Eyewear, Umbro/ophthalmic eyewear Best Retailer Sakar International, Inc., Kodak/family of products Boots, Strictly Come Dancing Shabby Chic, Simply Shabby Chic at Target/bedding, bath, window Forever 21, Minnie Mouse Lowes, Sesame Street Target, Toy Story 3 Best Film, Television, Celebrity, or Entertainment Program Walmart, Toy Story 3 Dora the Explorer, Nickelodeon Consumer Products Walmart, The Twilight Saga: Eclipse How to Train Your Dragon, DreamWorks Animation Justin Bieber, Bravado International Group Toy Story 3, The Walt Disney Company Overall Best Licensed Program The Twilight Saga: Eclipse, Summit Entertainment/Striker Entertainment Hello Kitty, Sanrio, Inc. The Wizarding World of Harry Potter, Universal Orlando Resort/ JCB, J C Bamford Excavators Limited/JCB Consumer Products Warner Bros. Consumer Products Justin Bieber, Bravado International Group PGA Tour, PGA Tour, Inc. The Stanley Works, Stanley Black & Decker/Beanstalk Toy Story 3, The Walt Disney Company Victoria and Albert Museum, Victoria and Albert Museum/V&A Enterprises 8 www.licensing.org Comment Date Is Near on Kids’ Food Marketing Last month, the Interagency Working a Washington Post report on the hearings.) Group on Food Marketed to Children — Of course, the definition of the word which includes representatives of the Fed- “voluntary” is hardened by the fact that the eral Trade Commission (FTC), Centers for guidelines are being put together by four Disease Control (CDC), Food and Drug Ad- government entities. ministration (FDA), and U.S. Department of In addition, the working group is accept- Agriculture (USDA) — held a public hear- ing written comments on its efforts until ing into its proposals that would guide food July 14. companies in their marketing efforts toward Much of the preliminary proposed prin- children and teens. ciples (go to http://www.ftc.gov/os/2011/0 If adopted, the voluntary guidelines would 4/110428foodmarketproposedguide.pdf for go into effect in 2016. (Go to http://www. a copy of the report, which was issued on washingtonpost.com/politics/food-makers- April 28) relate to improving “the nutritional resist-lawmakers-proposal-for-guidelines- profile of foods marketed to children.” It in-marketing-to-children/2011/05/24/AFK- also contains an extensive section on the f3mAH_story.html?wprss=rss_business for Please turn to page 10

R I O T T O CONTINUED FROM PAGE 1 floor opens, and is free to all attendees. Market Overview and Tour on Sunday June As our industry evolves and transforms, 12. Our retail consultants -- Lisa Carver and LIMA is once again hosting a multitude of Carol Spieckerman of newmarketbuilders -- educational opportunities at the Expo to will provide their perspective on the current help you keep up with the changes. Fea- U.S. retail landscape. Following this lun- tures debuting this year include free group cheon session will be a guided bus tour to a roundtables on Wednesday morning, June carefully selected group of major retailers. 15. These sampler sessions, moderated by Licensing Expo is a showcase for emerg- top industry experts, will include brief pre- ing trends and exciting new properties, and sentations and Q&A on topics ranging from also an opportunity to honor those who what makes a merchandisable property, to have helped grow the industry into what it working with retail. Also, LIMA and Busi- is today. ness for Social Responsibility, in collabora- One such visionary is Leigh Anne Brod- tion with Hasbro, NBC Universal, The Walt sky, President of Nickelodeon Consumer Disney Company and Time Warner, will Products, who will be inducted into the present a free seminar to promote greater Licensing Hall of Fame during the LIMA compliance with social and environmental Opening Night Awards Ceremony on June standards in the licensing industry. 14. The industry will honor Leigh Anne for Licensing University™ continues to offer her groundbreaking contributions to the strategic insight into major industry seg- world of licensing and merchandising over ments that will appeal to licensing new- the last 25 years, as well as her dedication comers and veterans alike. The program to charitable endeavors on behalf of LIMA’s covers a wide-range of topics, including Charity of Choice. Of course, we’ll also rec- licensing in the digital age, retail and dis- ognize our industry’s innovators with the tribution strategies, and how to stay ahead annual LIMA Licensing Excellence Awards. of consumer trends. Addressing the global After the awards ceremony it will be industry, sessions will be held on how to time to kick back at the House of Blues for expand licensing business internationally, LIMA’s Opening Night Party. Don’t miss the as well as a course for international attend- opportunity to catch up with your licens- ees on how to enter the U.S. market. ing friends and colleagues from around the LIMA will once again offer our Retail globe! www.licensing.org 9 PHOTO GALLERY

Rahul Gambir, Licensing Director for Tommy Hilfiger (L to R) Topps Europe’s Ruth Leonard and Ailsa Herd LIMA Board member Bettina Koeckler of Chorion India, was among the many speakers at the License discuss developments with Dave Tovey of Mind makes a point during the LIMA UK Licensing India conclave in Delhi. Candy at LIMA UK Licensing Essentials Course. Essentials Course last month. Educational Events in London, Tokyo, Delhi One of LIMA’s most important functions is to help licensing professionals keep up with developments and industry issues. Within the past several weeks, LIMA of- fices and representatives in sweveral parts of the world staged events for local con- stituencies. The annual LIMA UK Licensing Essentials Course was followed by the net- working Spring Fling. In Delhi, License India invited local marketers to hear more about Atulit Saxena, COO- Brand at Future Brands, licensing as a business model. And in Tokyo, Mr. Masaaki Hagino, President of Voyager Japan, was addresses License India Licensing conclave in New the main speaker at LIMA Japan’s Digital Publishing Delhi. LIMA Japan successfully staged a Digitial Seminar, which drew a full house in Tokyo. Publishing Seminar originally scheduled for the day the tragic earthquake struck.

Kids’ Food Marketing CONTINUED FROM PAGE 9 definition of “marketing targeted to chil- in efforts to work with the British govern- dren and adolescents,” essentially adopt- ment on drafting regulations on the same ing the language developed by the FTC in topic. It had been working for over a year its 2008 report to Congress on the subject. with the Food Standards Agency, but, with We’re monitoring the situation, and will the election of a new government last year, let membership know of any developments. responsibility for nutritional matters was We’d love to hear the views of members transferred to the Department of Health. and non-members alike concerning the best The handover to the DoH was completed path toward reasonable guidelines. What in January 2011. Several attempts to get are your ideas? Let us know your views on meetings have been thwarted by personnel the subject by sending an email to mbroch- and logistical issues, but that effort will be [email protected]. resumed after Licensing Expo. Meanwhile, LIMA UK has been involved 10 www.licensing.org THE LEGAL CORNER CONTINUED FROM PAGE 2 which is critical to ensure that the ship- the licensor’s written approval. Termination: Finally, it is important ments of manufactured licensed products For licenses involving apparel and related to tie in a specific termination right in the conform to the designs and specifications goods, it is very common to have a tiered event the licensee fails to comply with that Licensor previously approved. Licens- approach to distribution. This typically in- any of the brand standard, quality control, ees often complain about the timing of the volves starting in the upper-tier with one distribution and manufacturer provisions licensor’s approval rights impacting tight brand in the first year or two of the license, listed above. This is an important policing production and shipping deadlines. Despite and then moving down to the mid and mass mechanism for the licensor, and it ensures this reality, it is to the licensor’s advantage tiers in later years, often with a brand that a swift end to the license in the event of a to preserve full approval rights and to never is a derivative of the upper-tier brand. At non-performing licensee. allow silence (i.e. a failure to respond to an the same time the apparel licenses will These are just some of the provisions approval request within a certain defined also look to limit distribution to “off-price” available to the licensor to ensure that the time period) to be deemed approval. retailers to later years and for secondary licensed products conform to brand stan- Distribution Channels: The licens- brands only. dards of image and quality. Again, it is criti- ee will want the freedom to sell in all tiers Manufacturers: If the licensee in- cal not to leave these considerations to the through all possible distribution channels. tends to utilize a third-party manufacturer, parties’ intent or expectations – in order to For some licenses, this may be appropriate. the licensor will want to maintain the right be enforceable they must be in the written Yet, for most, it is not because licensors to approve the manufacturer and will want agreement. will often have specific expectations about to require the licensee to have the manu- where products should be sold to conform facturer sign an agreement that binds the Jed Ferdinand is a Principal with Jeffers to brand image. manufacturer to the obligations of the Cowherd P.C., a law firm located in Fairfield The most direct way to address the issue license agreement. An additional option County, Connecticut, where he heads the of distribution channels is to have a specific would be to require the Licensee and its firm’s intellectual property and licensing list of authorized retailers attached as a manufacturer to be bound by LIMA’s Code practices. Jed’s practice focuses on the schedule to the license agreement. At the of Business Practices. Licensors want to do protection and exploitation of brands in the same time, the licensee can be given the everything possible to avoid a repeat of a United States and internationally. He can freedom to explore other possible channels “Kathie Lee Gifford” labor situation at all be reached at JFerdinand@Jeffers-Law. during the term of the license, subject to costs. com. The flip Side: Harry Potter, Speed Networking flip staged successful events this spring tion from each department -- marketing, in California and New York, expanding the retail, licensing -- and be able to hear their knowledge of new licensing professionals. perspective about where they see the fran- Warner Bros. Consumer Products hosted chise going as the movie series comes to a flip Learning Breakfast on the Warner an end.” Bros. lot in March. A panel of key WBCP In New York, flip Speed Networking re- executives -- Pam Brice, Executive Direc- turned on April 6. The concept: give each at- tor, Retail Business Development, Rox- tendee five minutes with three different in- anne Gray, Director, Sales/Global Themed dustry executive to ask questions and learn Entertainment, and Kevin Morris, Director, more about their roll in licensing. Speak- Worldwide Marketing -- used their expe- ers included Elliott Azrak, EVP of Global Kevin Morris, Pam Brice and Roxanne Gray of Warner Bros. rience with the Harry Potter program to Licensing at LFUSA, Jose Castro, Director Consumer Products gave insights on managing the Harry discuss the challenge of maintaining and of Retail Development at Nickelodeon, and Poter franchise at flip event. extending a successful franchise. James Slifer, Vice President, Business De- “The Harry Potter event was a lot of fun velopment at The Joester Loria Group. and very informative. It was really interest- “It was a great way to meet executives ing to learn about how the licensing and from different aspects of the licensing in- marketing strategies have changed to adapt dustry and seev how they got to where they to both growing characters and fans,” says are now,” reports Kaitlyn Curran of Warner Judy Hua of Sanrio Global Consumer Prod- Music Group/Rhino Entertainment. “I wish I ucts. “It was also nice to have representa- had more time with them!” www.licensing.org 11 CONTINUED FROM PAGE 2 CONTINUED FROM PA CONTINUED FROM PAGE 2 GE 2 WELCOME NEW MEMBERS LIMA Board of Directors Adam Beder, Spin Master Ltd. 360 Audit LLP Experience Hendrix LLC Manchester United Richmond Management Peter Boder, United Labels AG Henna Riaz Bob Hendrix Merchandising Ltd. Group www.360royaltyaudit.com www.jimihendrix.com Sabine Eckhardt, SevenOne Ad Factory GmbH Ben Elkington Andy Richmond Glenn R. Hendricks, SloaneVision Unlimited www.mulicensing.com A Squared Entertainment Fantastick Greetings GmbH Simba Dickie Group Liz Kalodner, CBS Consumer Products Pam Vincent Gerd Mueller Stefan Lutz www.a2entertain.com www.fantastick.de Maravilla Entertainment Bettina Koeckler, Chorion Limited Carlos Luer Valdes www.simba-dickie-group.com Rick Mallow, Making Connections www.maravilia.com Alloy Entertainment Furniture Brands Speechly Bircham LLP Christina Miller, LIMA Chairperson, Cartoon Network Sarah DuBois Miller International, Inc. Nicholas Tall Maura Regan, LIMA Vice Chairperson, Sesame Workshop www.alloyentertainment.com McHale Design Shelley Peters Maureen McHale www.speechlys.com Charles Schnaid, Miller, Kaplan, Arase & Co., LLP www.furniturebrands.com Animundi www.mchaledesign.com SpinMaster International Stuart Seltzer, Marketing on Demand, LLC Raffaele Bortone Grasshorse, LLC Holly Stein, Mattel, Inc. www.animundi.com MegaRamp Events LLC s.a.r.l. Kathy Buxton Ray Ibe Michaele Madden Robert Strand, Strand IP www.grasshorse.com ASPCA www.megaramp.com www.spinmaster.com Kotaro Sunamori, Sun R&P Co., Ltd. Keri Becker HoHo Entertainment Ltd. Michael Healy Designs SPLICE Rick Van Brimmer, The Ohio State University Helen Howells Michael Healy Kimberly Billoni Careen Yapp, Konami Digital Entertainment Blue Sky International www.hohoentertainment.com Ted Larkins www.michaelhealy.com www.SPLiCEonline.com LIMA East Coast Representatives www.BlueSkyLLP.com Hong Kong Trade Develop- Mondo TV s.p.a. Spring Street Studio Inc. Blue Sky, Color of ment Council (UK) Roberto Farina Eileen Toohey Veronica Hart, CBS Consumer Products David Marsden www.mondotv.it www.spring-street-studio.com Janee Howard, LF USA Imagination www.hktdc.com Tom Brancky MUSE4 Consortium Team Licensing Lewis Stark, EisnerAmper www.blueskyimg.com Ideas at Work Ltd. Joanne Olds Gerold Kolenbrander Jessica Wichard, The Joester Loria Group Henry Becket www.muse4consortium.com www.teamlicensing.de Peter Yoder, Cartoon Network BonBon Buddies GmbH www.ideasatwork.ltd.uk Olga Bredin Muy Pop BV Tedi GmbH & Co. KG www.bonbonbuddies.com IMC Toys Deutschland GmbH Robbert Van Ingen Jennifer Brinkmann LIMA West Coast Representatives Ian Steinhäuser www.muypop.com www.tedi-discount.com Jennifer Campbell, Sanrio Bravado International Group www.imctoys.com Merchandising Services, Inc. Nerd Corps Entertainment Tex-ass Textilvertriebs Gregory Economos, Sony Pictures Consumer Products Felix Sebacious Intrepid One Nancy Lees GmbH Ross Misher, Brand Central Celia Murray www.nerdcorps.com Jutta Breyer Alex Schondorf, Creative Artists Agency California Costume www.intrepidone.co.nz www.tex-ass.com Fung Thai, Konami Digital Entertainment Collections, Inc. Pacific Entertainment JC Inc. Klaus Moeller Tickle Me Silly, LLC Christopher Lee Jennifer Coleman www.californiacostumes.com www.pacificentcorp.com Lou Hughes LIMA General Counsel www.ticklemesilly.com Caligari Film- und Fern- JPatton Pino Studio Gregory J. Battersby, Grimes & Battersby LLP Peter Reyes Danny Kim TYREK, LLC sehproductions GmbH www.jpattonondemand.com www.pinostudio.com Michael Okebiyi Gabriele Walther www.tyrek.us LIMA Staff www.caligari-film.de Kaffenberger Media PLR Holdings, LLC Marcel Kaffenberger Jason Sutton The Wild East Group Charles Riotto, President CNH America LLC www.kaffenberger-media.com www.polaroid.com Sid Shah Martin Brochstein, SVP, Industry Relations & Information Sarah Pickett www.wildeastgroup.com www.cnh.com Licens’in LTD POWerhouse Branding, LLC Louise Q. Caron, VP, Member Relations Yang Shi Qin Dirk Rossmann GmbH Cheryl Rubin Wingroad Co., Ltd. Mary Verdegaal, Director, Operations www.licens-in.cn www.powerhousebranding.com Chizu Kitamura Christina Attardo, Marketing Manager Stefan Hilbck www.tenteru.net www.rossmann.de Loungefly, Inc. Rainbow S.p.A. Leah Hunter, Office Manager & Bookkeeper Dynit S.r.l. Jason Hoffman Elisa Magrini Woolworth GmbH Sherry Rao, Managing Director, LIMA China www.rbw.it Katrin Roemer-Secker Heike Winner, Managing Director, LIMA Germany Alessia Marzadori www.loungefly.com www.woolworth.de www.dynit.it RealD Inc. Fumihiko Kusama, Managing Director, LIMA Japan Karen Doyle Tani Wong, Managing Director, LIMA Southeast Asia www.reald.com Kelvyn Gardner, Managing Director, LIMA UK Now Available THE BASICS OF LICENSING: How To Extend Brand and Entertainment Properties for Profit Endorsed by LIMA For information, go to BasicsofLicensing.com

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