drafting corporate sponsorship agreements for major events...

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Presenting a live 90-minute webinar with interactive Q&A

Drafting Corporate Sponsorship Agreements for

Major Events, Marketing and Promotional Activities Negotiating Provisions on Scope, Exclusivity, Brand Visibility,

IP Rights, Indemnification, Termination and More

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

TUESDAY, SEPTEMBER 27, 2016

Peter J. Kinsella, Partner, Perkins Coie, Denver

Sarah Hartley, Bryan Cave, Denver

Roger R. Quiles, Esq., Staten Island, N.Y.

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FACTORS TO CONSIDER WHEN EVALUATING WHETHER TO ENTER INTO CORPORATE SPONSORSHIP

AGREEMENTS

By Roger Quiles, Esq.

[email protected]

www.RRQlaw.com

(917) 477-7942

mailto:[email protected]

DISCLAIMER

This slideshow is to be used for educational purposes only. The information contained herein does not constitute legal advice. You should not rely on the information contained in this slideshow without consulting your attorney first.

6

UNDERSTANDING THE BUSINESS OF SPONSORSHIPS

What business interests are involved in securing a sponsorship?

Key points

Brand Exposure

Activation

Exclusivity

Duration

These form the basis of your understanding of any sponsorship!

7

BRAND EXPOSURE

This is THE reason why companies enter into sponsorship agreements- visibility!

Brand Exposure = Intellectual Property Usage

Understanding the demographics

When the demographics of the sponsee’s and sponsor’s consumers align, potential for long term successful sponsorship

8

ACTIVATION

Activation is how a sponsor independently promotes its sponsorship to increase awareness about its brand

Consumer engagement is key

Understand the potential activation(s) as early as negotiations!

Additional liability concerns

Ensuring appropriate space/time for activation

9

EXCLUSIVITY

Is exclusivity essential for your company’s sponsorship?

Important to define the exclusive sponsorship category

If each sponsee is a pie, the category is a piece of the pie

Ex. Apparel can be subdivided into hats, jerseys, hoodies, etc.

Remember categories can overlap!

Ex. Soft drink providers who also make energy drinks

Is the proposed sponsorship category broad enough to meet your company’s exclusivity desires?

10

CONTRACT DURATION

Important to understand how committed your company is to the potential sponsorship

If any concerns, how can you build escape clauses around them?

Limit sponsee’s ability to exit

Longer duration + exclusivity = untouchable area for competition

Also, longer durations may allow sponsor to build a further connection with the sponsee’s consumers

11

TEAM SPONSORSHIPS

Several kinds of Team Sponsorships

Official sponsor

Naming rights

Sponsor branding on uniforms

Generally provides Sponsor access to:

Players

Team branding

Tickets/items/memorabilia for giveaways

12

EX. PHILADELPHIA 76ERS AND STUBHUB

First team in the four US major sports to sell on-jersey advertisement

Reportedly a three year deal valued at $5 million per year to commence in the 2017-2018 season

League regulations limit the size of such ads to 2.5 inches by 2.5 inches

Source: http://www.espn.com/nba/story/_/id/15559477/philadelphia-76ers-sell-first-nba-jersey-advertisement-stubhub

13

http://www.espn.com/nba/story/_/id/15559477/philadelphia-76ers-sell-first-nba-jersey-advertisement-stubhub

















CONSIDERATIONS IN TEAM SPONSORSHIPS

What level of access to team personnel will your company have?

What restrictions are there on utilizing team branding?

What restrictions are there on utilizing your company’s branding in association with the team? (Like the NBA jersey ads)

What, if any, kickbacks are involved? (tickets, items, etc.)

Is the exclusive sponsorship category sufficient to close out competitors?

14

INDIVIDUAL SPONSORSHIPS

Quite different from business, event, or facility based sponsorships

Endorsements

Generally provides sponsor access to:

Product usage, both in-game and in day to day life

Social media promotion

Use of individual in advertising

BUT individuals may be subject to team and league regulations

15

EX. NFL PLAYERS AND BEATS BY DRE

Beats By Dre had entered into multiple sponsorship deals with NFL players to endorse its headphones

Players would regularly be seen pre and post game wearing the headphones

Upon NFL entering into exclusive deal with Bose, players wearing Beats became an issue

Players disallowed from publicly wearing the Beats headphones from 90 minutes prior to game to 90 minutes following the game

Sources: http://fortune.com/2015/01/13/beats-by-dre-banned-brands-nfl/; http://www.denverpost.com/2014/10/16/nfl-draws-fine-line-between-beats-bose-headphones/

16

http://fortune.com/2015/01/13/beats-by-dre-banned-brands-nfl/













http://www.denverpost.com/2014/10/16/nfl-draws-fine-line-between-beats-bose-headphones/

















CONSIDERATIONS IN INDIVIDUAL SPONSORSHIPS

What rules/regulations is the individual subject to?

Do the rules/regulations impact activation?

Are there limitations on the usage of the individual’s likeness rights?

Is the individual being paid in equity?

Ties the sponsor/sponsee much closer together

Valuation and termination issues

Used by startups to attract significant individuals that they otherwise couldn’t afford

17

FACILITY SPONSORSHIPS

The focus here is on naming rights:

To the facility itself

To areas/sections of the facility

To restaurants within the facility

Generally provides sponsor access to:

Ticketing for events

Branding for teams housed in the facility

In stadium signage

18

EX. LEVI’S STADIUM AND 49ERS

In 2014, the San Francisco 49ers entered into a sponsorship with Levi’s for the naming rights to their stadium

Deal reportedly worth $220 million over 11 years

At the time, this was the third largest naming rights deal for a stadium

Historical synergy- Levi’s was originally founded as a dry goods store for gold miners in the area, which the 49ers are named after

Sources: www.levisstadium.com; http://www.nfl.com/news/story/0ap1000000167936/article/levis-stadium-to-be-san-francisco-49ers-new-home

19

http://www.levisstadium.com/

http://www.nfl.com/news/story/0ap1000000167936/article/levis-stadium-to-be-san-francisco-49ers-new-home



















CONSIDERATIONS IN STADIUM SPONSORSHIPS

Naming rights deals for facilities are expensive and long term. Is such sustainable for your company?

What intellectual property rights does your company have access to?

What kind of activations would be substantial enough to justify the high price?

What’s your potential brand exposure?

20

DIGITAL SPONSORSHIPS

Several kinds of digital sponsorships for events: Naming rights

Official sponsor of online stream production

Official event sponsors

Generally grants sponsor access to: On stream brand placement- stationary or rotating

Promotion/signage at the location of the physical event

Web site ads

Social media promotion

Commercials during broadcast

In-chat promotions/giveaways

Event branding usage

21

EX. MLG CS:GO MAJOR CHAMPIONSHIP- COLUMBUS

Source: https://www.youtube.com/watch?v=0GK-uV2l_KE

22

https://www.youtube.com/watch?v=0GK-uV2l_KE



CONSIDERATIONS IN DIGITAL SPONSORSHIPS

How will Sponsor branding be displayed, in general?

What specific sizes are available to display branding?

Are there limitations to in-chat promotion?

Are there limitations to event branding usage?

Is exclusivity limited to the online stream or does it apply to the physical event as well?

23

THANK YOU!

Roger Quiles, Esq.

[email protected]

www.RRQlaw.com

(917) 477-7942

24



http://www.rrqlaw.com/

http://www.rrqlaw.com/

Perkins Coie LLP

Drafting Corporate Sponsorship Agreements Strafford

September 27, 2016

Peter J. Kinsella, Partner

(303) 291-2328

Perkins Coie LLP | PerkinsCoie.com Peter J. Kinsella 303/291-2328

Disclaimer

26 Peter J. Kinsella 303-291-2300

This presentation is for educational purposes

only and does not constitute legal advice. If you

require legal advice, you should consult with

your attorney.

The information provided in this presentation

does not necessarily reflect the opinions of

Perkins Coie LLP, its clients or even the author

Perkins Coie LLP | PerkinsCoie.com

Common Sponsorship Agreement Contract Terms

27


Potential Contracting Parties

28

• Team

• Arena

• Players

• Event Organizer

• Concessionaire


Grant of Rights / Scope / Activation -1

29

Exemplary License Clause:

Team hereby grants to Sponsor a limited license

during the Term to: (a) advertise and promote the

fact that Sponsor is an “official sponsor of the

________,” (b) use, reproduce and display the

Team Marks in connection with advertising and

promotion of Sponsor’s goods and services in the

Product and Services Category, and (c) promote

Sponsor’s sponsorship, subject to the terms and

conditions of use set forth herein.



30

Exemplary Endorsement Grant Clause:

… to use, and display the Athlete Identification alone or

with other trademarks of Company, in all cases, on or

for the Products including, but not limited to, on Product

packaging and in any related advertising, promotional,

informational and other materials.

“Athlete Identification” means Athlete’s name, voice,

nickname, likeness, and anything else that identifies

Licensor, including, without limitation, photographic or

graphic representations of Licensor, Licensor’s

signature, and statements by Licensor



31

Exemplary Arena clause:

During the Term, Arena will provide Sponsor with

the elements set forth in Exhibit A (“Elements”).

Costs, including but not limited to signage

(collectively, “Content”) associated with the

production and execution of Elements, will be the

sole responsibility of Sponsor, except that Arena will

pay for fifty percent (50%) of construction costs of

the _____________.



32

Exemplary Arena Elements

The restaurant located at [Arena Location] (“Restaurant”) will

be rebranded to [ ____ ] .

Sponsor Logo and Brand will be used with all references to

the Restaurant

Sponsor’s ketchup dispensers will be located throughout the

designated Restaurant. No third-party ketchup will be

served in the Arena.

Sponsor’s ketchup will be prominently featured in all

Restaurant menus



33

Display of Sponsor Products in Arena

Sponsor will be permitted to a display in the Arena

Sponsor promotional materials and/or products of a

mutually agreed upon size, type, quality, and final

configuration and consistent with the overall theme

of the facility and the permitted use by other

sponsors (but with due regard given to Sponsor’s

status as the primary sponsor of the Team).



34

Exemplary Hospitality Elements

One (1) Private Luxury Suite (“Suite”) for all pre-season,

regular season and playoff games played by the Team at

the Arena Center. (Note: Suite not available for other events)

Sponsor will pay for all additional costs associated with its

use of the Suite (i.e. food and beverage, catering, etc.)

Sponsor’s use of the Suite will be consistent with and

pursuant to the rights and obligations of “Licensee” (as that

term is defined in the Suite License Agreement). Sponsor will

adhere to all the terms of the Suite Agreement during the

Term and during its use of the Suite



35

Tickets / Passes

Team will provide Sponsor with a minimum of [ __ ]

tickets and VIP passes and parking passes for each

Game, which Sponsor may use at its sole

discretion.

Sponsor shall receive a total of two hundred (200)

tickets per game for preseason and regular season

Team home games at the Stadium. Location and

specific games shall be determined by Team in its

sole discretion in advance of each season.



36

Exemplary Racing Team Sponsorship Elements

Team Assets. The location of the Sponsor Marks in connection

with the sponsorship of the Team, and all related Rider racing

apparel (“Rider Uniforms”), Racing Bikes, Rider helmets (“Rider

Helmets”), Rider shoes, gloves, and other racing apparel (“Rider

Accessories”), race day Crew apparel (“Crew Uniforms”), the

Team cars, haulers/transporters (“Team Transporters”), and all

related racing equipment of Team (collectively with Rider

Uniforms, Rider Helmets, Rider Accessories, Crew Uniforms, and

Team Transporters, the “Team Assets”) will be as set forth in

Exhibit __________; and in all cases, the Sponsor Marks will be

prominently placed and larger than any other sponsor brands,

logos or marks.



37

Access to Team Facilities

Team will ensure that all Team facilities will be available to

Sponsor for [ ] Sponsor VIP tours, receptions, meetings, and

functions with reasonable advance notice, with Sponsor

paying the administrative and staffing costs and incidental

costs of any special requests in conjunction with such

functions, such as set up and cleanup costs, catering food

and beverage, any required equipment rentals, or the costs

of Team personnel which might be needed to service the

special functions after normal business hours



38

Exemplary Signage and Radio Elements

Virtual Signage: Half a period (10:00 minutes)

behind one (1) goal for all locally televised LA Kings

home games played at STAPLES Center

One (1) :30 Pre-Game Radio spot during all Game

broadcasts

One (1) :30 In-Game Radio spot during all Game

broadcasts



39

In Market Promotion

One (1) thirty (30) day promotion/sweepstakes to be run

during a mutually agreed upon period (during the Team’s

regular season) (“Promotion”)

• Team to support Promotion via internal marketing

• One (1) social media post per week (From either

Facebook, Twitter or Instagram) during the thirty (30) day

Promotion period

• One (1) :10 PA announcement (content to be approved by

Team), scoreboard logo and LED signage during two (2)

mutually agreed upon Games at the Arena during the

Promotion period



40

Play-offs

Unless otherwise explicitly stated herein, the

foregoing elements/rights provided hereunder are

for the regular season only. In the event the Team

qualifies for the playoffs, Sponsor shall be required,

subject to availability, to purchase such Elements at

the playoff rate card established therefore by the

Team. Payment for all playoff Elements shall be

due within thirty (30) days after the final game

played by the Team.



41

Example Event Elements

Sponsor’s logo and a hyperlink to its official website will appear in the

sponsors section of the official Event website.

Sponsor will be entitled to one (1) promotional message related to its

Event sponsorship on each of the Event’s Facebook and Twitter pages,

content subject to Event’s prior written approval.

Sponsor logo and a hyperlink to its official website will appear in the

sponsors section of the official Event Facebook page.

Sponsor’s activation space at the Festival Event will be marked on the

Official Event map.

Sponsor’s logo will be included in all email blasts that include sponsors.

One (1) 4-color full page ad for Sponsor in the Event’s official guide



42

Players and Coaches

With the exception of certain group player licensing rights that

may be made available to Sponsor pursuant to the Team’s rights

under the [Player Agreement], Sponsor acknowledges that this

Agreement does not grant it any rights with respect to the name,

likeness, signature or other attributes of any player, coach, or

other employee of the Team. Sponsor shall be responsible for

securing whatever rights may be required for the use of such

names, likenesses, signatures or other attributes and may only do

so with the prior written consent of the Team. Sponsor represents

that it will not exercise the rights granted in this Agreement in any

manner that will imply Sponsor has obtained any such rights

without separate written authorization from the appropriate player,

coach or employee.



43

SPONSOR’S USE OF PLAYER LIKENESS. Sponsor is granted the right

to use any Player Likeness, and with prior written approval from the

Licensor, each such use shall be subject to the following terms and

conditions:

A. Rule of Four. Subject to the collective bargaining agreement … any

use of Player Likenesses must include a minimum of four (4) athletes

used both equally and collectively (the “Rule of Four”). Under the Rule of

Four, Sponsor will have the right to use Player Likenesses provided that

the photograph(s), rendering, or video footage includes either: (i) a group

of four (4) or more Club players, in uniform, appearing together, or (ii) a

Player Likeness appearing with three (3) or more other Club Player

Likenesses, all in uniform, as part of a series, set, collectible or as part of

a sequential product (e.g., trading cards, posters, pins, etc.) all with equal

representation, in any given application.



44

If fewer than four (4) Club players are used for any

promotional or advertising piece, Sponsor will be

responsible for securing the rights to use each

individual Player Likeness. Sponsor must provide

documentation to League confirming that it has

secured such rights.



45

Appearances.

If Sponsor is entitled to Club player/mascot appearances or

participation in events or clinics as part of its Rights, such

appearances and participation is subject to player/mascot

availability, will not exceed ninety (90) minutes in duration

and will be conducted in accordance with the policies and

procedures established by Licensor. Licensor will determine

which player(s) appear(s) at the events or clinics. The

payment of all costs and expenses attributable thereto

(including, without limitation, reasonable travel expenses)

will be borne by Sponsor unless otherwise set forth in the

Term Sheet.



46

Pass-Through Rights to Third Parties.

If pre-approved in writing by Licensor, Sponsor may include

trade names, trademarks, service marks, logos, symbols, or

other copyrighted or proprietary identifiers of an approved

third party on or in connection with items or materials which

bear the Licensor Marks (“Pass-Through Rights”). In limited

circumstances in which the Licensor permits Pass-Through

Rights to a third party (e.g., if such third party is a distributor

or retailer of Sponsor’s products) then such Pass-Through

Rights must be exercised in accordance with the following

guidelines …


Arena - Non-Signage Events

47

Team may determine in its sole discretion that

certain events at the Stadium from time to time,

including, but not limited to the Olympic Games,

Super Bowl, World Cup Soccer, NCAA

championships, college football bowl games,

college football championship games and other

events, may require that signage and advertising be

covered, obscured or temporarily removed during

the event or may prohibit signage or advertising for

any party other than a sponsor of the event itself.


Exclusivity

48

The rights granted to Sponsor herein are exclusive

to Sponsor within the Product and Services

Category with respect to [Arena / Marks /

Designation].

For use with closely related categories…

• For purposes of clarity, Team will not enter into a

sponsorship agreement / permit or authorize others to

use any of the Marks or a Designation party with

respect to _____________


Exclusivity – Exceptions

49

The exclusivity granted in this Agreement is not intended to

apply to Temporary Advertising granted separately by teams

or promoters of other events.

“Temporary Advertising” means temporary advertising and

promotional rights within the [bowl / stage / performance /

seating areas] of the Arena and the fascia board ring or

LEDs (e.g., courtside scorer’s table, basket stanchions, chair

backs, ice resurfacing machines, dasherboards, scoreboard

identification and messages, fascia board ring messages

and advertising, public address system announcements,

game or event program advertising, and event related

promotions (e.g., event tee-shirts)).


Use of Marks

50

Any such use of the Trademarks by Sponsor is: (i)

subject to prior approval by the Team, which

approval shall not be unreasonably withheld,

conditioned or delayed as to the form of such name

and logo, and (ii) must use the Team’s established

logo-type, trademark or service mark…

In no event will Sponsor have the right to use the

Trademarks outside of a _______ mile home radius

measured from the Arena without obtaining the prior

written approval of the Team and the League.


Approval Process

51

Sponsor will submit to the Team all advertising or

promotional materials involving any Team Marks at

least ten (10) business days prior to the production

of such materials. Sponsor need not receive

specific approval to release such advertising or

promotional materials to the public. However, the

Team will have the right, at any time during the ten

(10) day period, to object to any advertising or

promotional materials, and Sponsor will not use the

advertising or promotional material if the Team

objects to their use.


IP Rights

52

Typical Clauses

1) Ownership acknowledgement

2) Notification of Infringement

3) Quality Standards

4) Marking requirements


Subordination/Compliance

53

This Agreement and the rights granted to Sponsor

hereunder are subject to the review and prior written

approval of the League, and will in all respects be

subordinate to, and shall not prevent the issuance,

entering into, or amendment of, any of the following,

each as may be issued, entered into or amended from

time to time: (a) the constitution, bylaws, resolutions

and other rules, regulations, policies, directives, rulings

and/or orders of any applicable sport governing body,

and, (b) the rules, regulations, and/or policies of the

League, in each case as in effect on the date hereof

and as may be amended from time to time.


Force Majeure

54

Neither Party will be liable for failure to comply with any

of the terms or conditions of this Agreement when such

failure to comply has been caused by fire, war,

insurrection, labor disturbances, work stoppages,

terrorism, government restrictions, natural disasters,

weather, or acts of God beyond the reasonable control

of the parties, provided the Party so affected gives

prompt notice to the other. In the event of a suspension

or any obligation by reason of this Section which

extends beyond __ days, this Agreement will be tolled

or terminated at the discretion of Team.


Lost Games

55

If there is a Work Stoppage that results in the cancellation of

more than [x%] percent of the scheduled regular season

Games for a season (“Lost Game Threshold”), then the

consideration payable by Sponsor for the applicable season

may be reduced by an amount equal to the product of the

portion of such consideration allocated to rights granted

hereunder to Sponsor with respect to regular season Games

that are not received as a result of the Work Stoppage

multiplied by a fraction: (a) the numerator of which is the

number of such regular season Games which are canceled

as a result of a Work Stoppage, and (b) the denominator of

which is the total number of regular season Games

scheduled for such season (“Loss Game Value”).


Work Stoppage

56

In the event that [an entire Season] is lost due to a Work

Stoppage, the parties may mutually agree to toll the

Agreement for such Season, and that Sponsor’s obligation to

pay the applicable consideration shall be tolled during such

year. In such case, the parties may extend the Term of the

Agreement for an additional year, by entering into a written

agreement no later than ninety (90) days following the date

that MLS announces the cancellation of the MLS League

season. In the event that the parties do not agree to toll the

Agreement, Sponsor may terminate the Agreement by …


Make-Good Benefits

57

In the event that the Team is unable to provide any benefits

under this Agreement, then Sponsor is entitled to receive

“make good benefits” of a value comparable or greater than

the value of benefits to be provided as part of the

Sponsorship Rights that are not provided (the “Lost

Sponsorship Benefits”). The Parties will promptly meet to

determine make good benefits to be provided to compensate

for Lost Sponsorship Benefits. In the event that the Parties

are unable to agree on the make good benefits to be

provided, then the make good benefits will be determined

under the arbitration process set forth in Section 12.


Renewal Rights / Term / Termination

58

- A termination for convenience right is typically

difficult to obtain, except for a later term of a

multi-year agreement.

- If such a right is granted, it typically requires

significant advance notice.


Payment

59

Sponsor will pay the Team the amounts as set forth in

Exhibit A. In the event that the Team doesn’t receive any

payment from Sponsor on or before the applicable payment

due date, the Team may consider said failure to pay a

material breach, and may elect to charge Sponsor a late fee

of 1.5% per month of the payment then due and owing until it

is paid in full. If Sponsor fails to cure such default within five

(5) days of written notice, the Team may elect to terminate

this Agreement pursuant to Section 6.

The foregoing amounts are net of any commissions owing to

advertising agencies or other third parties and the Team has

no responsibility for the payment of any such commissions.


Value in Kind

60

Many sponsorship agreements may have a cash

and a value-in-kind component.

The value-in-kind is often provided pursuant to a

modified version of the Sponsors standard form or

the material clauses are incorporated into the

Sponsorship Agreement.


Morals Clause / Reverse Morals Clause

61

If either party hereto or any of its officers, directors, board

members, principals, employees, agents, or representatives

commits any act which, in the reasonable and good faith

opinion of the other party, would disparage or impair the

reputation and integrity of the other party hereto (including,

without limitation, being convicted of any felony or a crime

involving moral turpitude, ethical violations or any other act

of moral turpitude), the other party hereto shall have the right

to terminate this Agreement without liability to the other party

upon thirty (30) days written notice.

NOTE: Better to be specific than vague


Morals Clause / Reverse Morals Clause - 2

62

Company will have the right to terminate this Agreement for

any of the following reasons:

If the publicized (through national, responsible media)

alleged or actual conduct of Talent is illegal or otherwise

grossly offensive to generally accepted standards of

behavior (including, but not limited to, illicit drug use or public

intoxication) so as to lead Company to reasonably believe

that public association with Talent would tend to subject

Company to ridicule, contempt, controversy, embarrassment,

or scandal.


Warranties

63

• Typical formation, authorization and due

execution warranties

• Specific warranties concerning Sponsor’s

products and services (particularly if VIK is being

provided)


Indemnity vs. Warranty

A breach of warranty can lead to a breach of

contract claim and termination of the Agreement.

An indemnity is typically used to provide

contractual protection in a manner that limits

breach of contract claims.

64


Indemnity -- Scope of Obligation

What is covered?

• claims? allegations? final decisions?

• type of damages? finally awarded damages or as

costs are incurred? attorney fees?

• covered activities

• simply the existence of the product or software

• claims directed at the “use” of the product or software

• what type of intellectual property rights are covered?

• patents, copyrights, trademarks, trade secrets?

65


Indemnification - 2

66

Traditional exemplary indemnity clause

Vendor will indemnify, defend, and hold Customer, its

affiliates and their principals, agents and personnel

harmless against all costs, fees, expenses, damages

and liabilities (including attorneys’ fees and other

defense costs) suffered, incurred or awarded against

Customer as a result of any third party claim, suit or

dispute relating to or arising from:


Indemnification - 3

67

Defend and Pay Awarded Damages

Vendor will defend Customer against any third party

claim, action, proceeding or suit, and will pay for the

resulting costs and damages finally awarded

against Customer to such third party by a court of

competent jurisdiction or agreed to in settlement by

Vendor, arising from:


Limits on Liability - 1

• An agreement may attempt to limit or alter the measure of

damages available

• Different forms of limitations

• Limitations on the amount damages

• Limitations on the type of damages (i.e., consequential,

incidental, etc.)

• Limitations on other remedies (e.g., limit remedy to

repair, replace, re-performance)

• UCC governs most software transactions, but not pure

service agreements - applicability of unconscionability

and failure of essential purpose doctrines are less defined

68


Limits on Liability - 2

Common Exceptions (may apply to limitation

amount and/or limitation on type of damages)

• Payment obligations

• Breach of confidentiality

• Improper use of IP

• Death

• Personal Injury

• Property Damage

69


Insurance

Commercial General Liability Insurance

Product liability insurance (especially if marks are

being used to promote goods and services)

70

Perkins Coie LLP | PerkinsCoie.com 71

Thanks!

Peter Kinsella

[email protected]

303-291-2328

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DISPUTE RESOLUTION FOR

SPONSORSHIP AGREEMENTS

Drafting Tips to Streamline Dispute Resolution Process

Sarah Hartley

[email protected]

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This presentation is for educational purposes only and

does not constitute legal advice. If you require legal

advice, you should consult with your attorney.

The information provided in this presentation does not

necessarily reflect the opinions of Bryan Cave, LLP, its

clients or even the author

DISCLAIMER

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• Be as clear and concise as possible in drafting to avoid

disputes over meaning

• Understand the parties’ respective goals and needs to

minimize chances one party will breach when agreement

doesn’t suit their needs

• Talk over issues both internally and with your

counterparty to make sure you understand the intent of

proposed langauge

AVOIDING DISPUTES – NEGOTIATION

TIPS

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• Parties breach though… so how do we minimize the

expense and inconvenience of a dispute?

• Include appropriate dispute resolution provisions

• Understand the pros and cons of different dispute

resolution mechanisms and applicable law

• Gauge appetite and budget for litigation

DISPUTE RESOLUTION

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• Make sure you specify the applicable law

• Choose applicable law wisely

– Home jurisdiction

– Jurisdiction with favorable law

• Sample

– Governing Law. This Agreement will be governed by and

construed in accordance with the laws of the State of Colorado.

CHOICE OF LAW

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• State or federal court

– Do you prefer federal court for IP related claims?

– State court may be preferable for other claims

• Arbitration

– Would you prefer arbitration for all claims related to the

sponsorship agreement?

VENUE

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PROS

• Confidentiality

• Procedures can be

crafted to parties’ needs

• Arguably faster

CONS

• Limited ability to appeal

decisions

• Discovery can be limited

• Hard to obtain third party

discovery, if needed

ARBITRATION

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SAMPLE DISPUTE RESOLUTION

PROVISION

– The parties agree that any breach of either party’s obligations regarding trademarks,

service marks or trade names and/or confidentiality could result in irreparable injury for

which there is no adequate remedy at law. Therefore, in the event of any breach or

threatened breach of a party’s obligations regarding trademarks, service marks or

trade names or confidentiality, the aggrieved party will be entitled to seek equitable

relief in addition to its other available legal remedies in a court of competent

jurisdiction. For the purposes of this Section only, the parties consent to venue in the

state courts of Colorado.

– In the event that disputes between the parties arising from or concerning in any

manner the subject matter of this Agreement, other than disputes arising from or

concerning trademarks, service marks or trade names and/or confidentiality, cannot

be resolved through good faith negotiation within thirty (30) days after notice of dispute

is provided to the other party, the parties will refer the dispute(s) to the American

Arbitration Association for resolution through binding arbitration by a single arbitrator

pursuant to the American Arbitration Association’s rules applicable to commercial

disputes. The arbitration will be held in Colorado.

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• Injunctive relief – Agree in advance that any breach of obligations as to IP or

confidentiality would cause irreparable injury

– Not dispositive, but is evidence that breach will cause irreparable harm

• Limitation of liability – Cap on damages

– Limit on punitive/consequential damages

– Mutuality

• Attorneys’ fees – To prevailing party

– Reasonableness

RELIEF

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• Agreement to alter/limit the measure of damages

available

• Can limit as to amount or type of damages, or available

remedies

• May include exceptions for particular issues, such as

payment obligations, breach of confidentiality, improper

use of IP, among others.

LIMITATION OF LIABILITY

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• Make sure language is as clear as possible and that the

parties have the same understanding of its meaning and

intent

• Merger clause (“entire agreement”)

– Authoritative agreement – supersedes prior oral representations

and writings

– Any modifications in writing to avoid confusion as to operative

terms

• Construction

– Construe against drafter vs. favor neither party

CONTRACT CONSTRUCTION

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• Understand your client’s needs and goals

• Understand your counterparty’s needs and goals

• Understand any outside constraints on your agreement

(e.g., IOC Rule 40 for Olympic-related sponsorships)

• Understand the consequences of a breach so as to craft

the most appropriate dispute resolution language for the

parties

TAKE-AWAYS

drafting corporate sponsorship agreements for major events...

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