Lessons Learned from a Gum Licensing Agreement

Factual History

The original 1957 agreement allowed for a 20-year term in which Topps was to provide to Stani “the know-how, formulae, processes and techniques used by Topps” to manufacture and distribute the gum in Argentina, Bolivia, Chile, Paraguay, and Uruguay, in exchange for royalties. In 1976, a new agreement was executed allowing for Stani's continued use of Topps' “manufacturing, technology, marketing concepts and techniques, administrative and consultive assistance and trademark use” for a 10-year term, with an option to extend for another 10 years. In 1980, Topps and Stani entered into two further agreements, an escrow agreement and an Amended and Restated License Agreement, outlining terms similar to the 1976 agreement, but extending the license until 1996. However, while the 1976 agreement specified the products as “Licensed Products utilizing Topps Technology,” the 1980 agreement only specified “Licensed Products.” The escrow agreement held that unless Stani defaulted under the 1980 license agreement, “Topps [would transfer] legal title to the registration in Argentina of the trademarks 'Bazooka', 'Topps' and related trademarks” to Stani upon expiration of the license agreement. Stani in turn paid $100,000 for the escrow agreement.