An exclusivity clause is just one of many conditions that brand owners and manufacturers want to address in an agreement regulating an order manufacturing relationship. Other terms that the parties should take into consideration include the relevant terms and conditions, quality standards and remedies, confidentiality rules governing the jurisdiction and tribunal to be the subject of a dispute over the agreement. Thoughtful and carefully crafted agreements can protect both the manufacturer and the trademark owner from unintentional results and give each party a clear understanding of their related rights and obligations from the outset. Pamela A. Grinter is a partner in the corporate department of Fox Rothschild LLP. represents private, public and not-for-profit companies in the full range of business transactions, including entity selection and business creation; shareholder management; mergers and acquisitions; manufacturing, distribution, franchising and trade agreements; and business layoffs. She can be reached at email@example.com. A license agreement between a trademark holder and a manufacturer is an official document indicating that the manufacturer of a product is authorized to manufacture the product by the company or person who protected it with the trademark. However, the trademark owner may choose the terms of the license of this Agreement. This agreement is essential evidence – which is also valid in court – to ensure that the component protected by trademark law is not copied and produced illegally. A typical exclusivity clause intended to benefit a trade mark proprietor obliges the contractual manufacturer to restrict its production and sale of those same or similar goods for a certain period of time. An exclusivity clause for a trademark owner may last for the duration of the contract for the manufacture of the trademark. However, the trademark owner often wants the exclusivity period to extend beyond the duration of the contract, so that a manufacturer cannot immediately start manufacturing competing products at the end of the relationship.
The scope of this type of exclusivity clause generally also applies to goods which are identical or substantially similar to the goods which the manufacturer of the contract has been instructed to manufacture for the proprietor of the trade mark. . . .