Fine of €14.3m imposed for restrictions in merchandising agreement - Kuits Solicitors Manchester
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Fine of €14.3m imposed for restrictions in merchandising agreement

Fine of €14.3m imposed for restrictions in merchandising agreement

5th March 2020 - Published by

NBCUniversal’s group of companies (“NBC”) have been fined €14.3m for restricting competition within the EU.

NBC was the proprietor of intellectual property rights in various images and characters from NBC’s films, including Minions, Trolls and Jurassic World. NBC granted traders non-exclusive licence agreements to use these images and characters on a range of merchandise, such as clothing, toys, mugs, etc.

In 2017, the European Commission (being the body responsible for enforcing EU competition policy) opened an investigation into certain licensing and distribution practices of NBC. The Commission ultimately found that NBC’s non-exclusive licensing agreements breached competition rules by imposing both direct and indirect measures on traders, which prevented them from selling outside their designated territory and customer groups.

Particular clauses which the Commission found to have breached the competition regime included:

  • Explicit prohibition on sales out-of-territory;
  • Obligations to notify NBC of out-of-territory sales;
  • Explicit prohibition on sales to non-allocated customer groups;
  • Obligations to pay NBC revenues generated from sales to non-allocated customer groups;
  • Prohibition on online sales; and
  • Restriction on licensees from selling to customers who could be selling outside the allocated territory or customer group.

The level of fine imposed on NBC included a 30% reduction to take account of NBC’s cooperation in the investigation.

If you have any questions regarding whether certain restrictions in a distribution or licence agreement are permissible, then please contact our IP team on 0161 838 7816, or contact us here.

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