Trademark Licensing by runout


									                                   Trademark Licensing


The Trademark Licensing office (TLO) primary mission is to authorize, monitor and

control the commercial and non-commercial rights to both the university and state of

Wyoming’s trademarks, while working to advance their visual images on commercial



The TLO’s focus should be broadened to include not only what the product is that is

bearing our trademarks, but where and how this product is sold and presented to the

public. The TLO should also strive to expand the ways in which its resources can further

enrich a student’s education at the university.

Products/Services Provided

Trademark owners have the inherent obligation to manage the use of their mark(s) as

well as to ensure that products bearing their marks are of a consistent quality. Through

the execution of licensing agreements, marketplace reviews, product and design

approvals; these obligations are satisfied.

The TLO manages the university and State of Wyoming’s licensing programs;

specifically for the state, the Bucking Horse & Rider (BH&R) trademark.   This is a

valued service to the state as they currently do not have the resources to manage a

trademark licensing program. Centralized management of the BH&R mark is also ideal

as it allows for economies of scale while also removing obvious marketplace issues with

this shared image.

      University alumni, current students, faculty, and staff are stakeholders in the

       collegiate products under supervision by this office.

      University administration is both a stakeholder in the products licensed and also

       in how the office is managed.

      The citizens of Wyoming, the state government and all of its departments are

       stakeholders in those products bearing the BH&R mark, not representing the


      Manufacturers and retailers of licensed products are stakeholders as they must

       be able to source and resell these licensed products on an even playing field with

       their own competitors.

      Beyond the specific products that are under supervision by this office, the state is

       a stakeholder in who and how this office is managed and structured. In the same

       respect, the university is a stakeholder in how the state structures its licensing

       program and how it protects the BH&R trademark; as the state holds all federal

       trademark registrations to the mark.
Major Short-term goals

   1. Continue to operate office profitably.

   2. Complete analysis of alternative structures for the state’s licensing program.

   3. Implement changes, as directed by state, to BH&R licensing program.

Major Long-term goals

   1. Increase the assistance provided by this office to retailers and manufacturers in

       the display, merchandising and promotion of licensed products in Wyoming.

   2. Continue development of processes that allow for increased efficiency and

       improved management of licensed manufacturers.


Key “dashboard” items that are monitored to determine the overall performance of this

office and used in the planning of future actions include:


      Design Submissions

      Marketplace Compliance

             o   Visitations with Retailers

             o   Visitations with Licensed Manufacturers

             o   Compliance with Design Submission Requirements

             o   Infringement Identification

             o   Infringement Resolution

Top Revenue Producing Manufacturers

      Review of top 25 revenue producing licensees from prior year

             o   Trend analysis
          o   Review of new licensees that may impact the “top 25’s” royalties

          o   Assess distribution channels, product make-up, changes to product

              make-up, financial problems (i.e. bankruptcy), mergers, etc. of the top 25


      Video Games (category comprises ~8-10% of gross royalties)

      Headwear licensees (category comprises ~10-15% of gross royalties)

Athletic Team’s Success

      Projection of athletic success to future royalties

      Monitoring of (Active website for Wyoming athletics issues and

       fan discussion)

Income Statement

      Review of income and expenses

      Review of P&L as it relates to budget progress

      Assessment of spikes/trends

      Audit Recoveries

      Quarterly royalty reporting by instate licensees
Review of Departmental Resources


This office is currently staffed with one full-time and one part-time employee. The

manager handles all aspects of the office while the part-time employee assists with

routine tasks and in-state royalty collection procedures.


The physical operation of the TLO entails one and one half offices and a shared storage

room. The TLO archives hundreds of product samples and related paperwork for

licensees, legal cases, trademark registrations, etc.


The TLO continues to remain a self-sustaining unit. The TLO receives revenue primary

from three sources: the Collegiate Licensing Company(CLC) (out-of-state UW

manufacturers), in-state UW manufacturers and the state’s licensing program. Graph I

shows the impact revenue received from managing the state’s licensing program has on

the overall bottom line. UW’s compensation for management of the state’s licensing

program is as follows: 40% of gross royalties and a $20,000 annual payment. This

annual payment was reduced by $10,000 in fiscal year 2003 due to the BH&R program’s

financial constraints, as well as the fact that a partnership with the state in the

management of the BH&R mark remains ideal.
                                               Graph I
                                       Impact of State Royalties

                              00            01             02            03          04
                                                    Fiscal Year

                                   Gross State Royalites        Profit/Loss of TLO

As shown in Graph II, increases in collegiate royalties have been realized during the

past four fiscal years. In part, these increases have been a result of incremental

royalties from headwear, video games, sales from collegiate e-commerce websites,

increased popularity in the color brown, “retro throw-back” merchandise and increased

sales from the university’s bookstore.

                                           Graph II
                                   Gross Collegiate Royalties


                         00            01             02            03         04
                                                  Fiscal Year

                                            Gross Collegiate Royalties

Graph III shows the total expenses incurred by this office over the past five fiscal years.

While there is a notable increase from FY 03 to FY 04, much of this spike is due to one-
time costs that were incurred this fiscal year ($16,000 in additional scholarship funding,

$15,000 for development of a CLC/UW marketing fund, $5,000 increase in insurance

and salary matching expenses, etc.).

                                          Graph III
                                       Total Expenses

                        00            01            02              03         04
                                                Fiscal Year

Financial Return to University

In addition to covering departmental overhead and expenses, the TLO provides the

following annual financial return to the university (FY 05 data):

       Auxiliary Services’ Assessment                                       $ 7,795.00

       VP Budget & Planning (Indirect Cost Recovery)                        $ 3,205.00

       Student Scholarship Support                                          $10,000.00


Comparative Data

In the last support services plan prepared for the university, a variety of comparative

data was provided. This data brought to light the difficulties in drawing comparisons

between licensing programs. In addition, no other collegiate licensing program in the

country shares an image with its state. This unique marriage of imagery creates oddities

within the retail environment and also a unique political environment that to some degree
dictates the resources needed to manage this office. Later in this self-study, additional

information will be given as to the importance of the state’s licensing program.

A comparison of royalty rates and gross royalties of Mountain West Conference

institutions is illustrated in Table 1. An outline of royalty rates for all CLC consortium

schools has also been attached as Exhibit A.

               Table I
       Mountain West Conf.             Royalty          FY 04
             Institution                Rate          Gross Roy.
 1       Brigham Young U                7.5%           $300,000
 2       Colorado State U               8.0%              *
 3    U of Nevada Las Vegas             7.5%               *
 4       U of New Mexico                8.0%         $ 220,000.00
 5      San Diego State U               7.5%          $73,500.00
 6          U of Utah                   8.0%         $ 226,000.00
 7   U.S. Air Force Academy             8.0%         $ 126,000.00
 8        U of Wyoming -          6.5%/7.5%       $ 172,000.00
*Information would not be disclosed by university

Factors such as: fashionability of school colors/marks, concentration of alumni, success

of the athletic teams, football attendance, student population, proximity of other

universities or professional teams, retail landscape and even royalty rates can all

dramatically affect a program’s gross royalties. A comparison of the make up of these

gross royalties provides an insightful comparison of licensing programs. Table II

compares the FY 04 composition of gross royalties for the university to that of the

consortium of schools represented by CLC.

                                              Table II
                           Royalty Analysis by Product Category for UW
Category                                    % of Total UW Roy.         CLC               Deviation
                                                                   Consortium %
T-shirts                                       18.70%                15.00%                  3.70%
Outerwear                                       6.70%                 4.60%                  2.10%
Headwear                                        9.80%                10.00%                   -.20%
Team Apparel                                    5.00%                 3.40%                  1.60%
Infant/Toddler/Youth                            2.80%                 4.60%                  -1.80%
Other Apparel                                   5.90%                 6.60%                   -.70%
Women's Apparel                                 4.30%                 3.80%                   .50%
Fleece                                         15.80%                 9.80%                  6.00%
Accessories                                     1.70%                 3.10%                  -1.40%
Home & Office                                   4.00%                 5.40%                  -1.40%
Gifts & Novelties                               6.10%                 7.20%                  -1.10%
Paper/Printing/Publishing                       2.00%                 2.40%                   -.40%
Sporting Goods/Toys                             .70%                  3.40%                  -2.70%
Specialty Items                                 7.70%                12.10%                  -4.40%
Interest                                        .10%                  0.10%                  0.00%
Prepayment                                      4.20%                 6.60%                  -2.40%
Promotional                                     4.60%                 1.90%                  2.70%

Those differences that are apparent in Table II are expected given Wyoming’s retail

marketplace, environment, athletic success, and inclusion in national promotions. This

chart is also a good illustration that royalty composition of larger programs is not

exclusively dependent upon one category (i.e. t-shirts, video games, etc.). Rather the

philosophy of “when the tide rises so do all the boats (i.e. product categories)” is true.
Business Models:

There are two business models used in the collegiate licensing industry: agency

managed and independent. Agency managed programs exclusively utilize the

assistance of an outside agent in managing its licensee base (licensing application,

insurance verification, audits, artwork approval, legal actions, trademark filings, licensee

communication, contract negotiation, etc.), whereas independent programs directly

manage all activities associated with its licensees through an in-house department.

Within the agency realm, there are two licensing agents: The Collegiate Licensing

Company (CLC) and the Licensing Resource Group (LRG). CLC represents

approximately: 170 different universities, nearly every major bowl game and the NCAA,

whereas LRG represents a small handful of universities. The TLO currently has an

exclusive contract with CLC extending to 2010.

Even with an agency managed licensing program, an on-campus administrator must

exist. To what level this administrator dedicates his/her time to licensing activities is

dependent upon the university’s interests and the needs of the program.

The number of large independent licensing programs (e.g. Notre Dame, University of

Washington, UCLA, etc.) continues to decline as these schools have begun to see

additional benefits to being part of the CLC consortium. Agency benefits include:

economies of scale, free legal services relating to a school’s trademark(s), enormous

leverage with producers, audits, efficient artwork approval processes, inclusion in

national promotions and a national marketplace monitoring system.

UW is the only university in the nation to share an image with its state. This marriage of

imagery creates a unique marketplace and political environment. Prior to 1995, the state

did not operate a licensing program for the BH&R mark. This situation created issues for

the university’s protection and merchandising efforts. Eventually these trademark
protection issues warranted the development of a state licensing program. In 1995, the

state neither had the expertise nor interest in developing and managing its own licensing

program for the BH&R mark. Thus the university was a natural fit. If the state were to

operate its own licensing program independent of the university, there would be inherent

conflicts between the licensing offices, as they would both be striving to protect the same

mark in the same marketplace.

Given all of this, the university operates under a hybrid business model: agency and

independent. This structure allows the university to directly manage both the state’s

licensees and the university’s licensees based in Wyoming, while leaving all collegiate

out-of-state companies to the management of CLC. Management of these in-state

licensees and of the state’s BH&R licensing program by CLC is realistically and

politically not a viable solution. In fact, CLC once did both, but by mutual agreement

CLC ceased its management of both. In addition, there are components of the state’s

licensing program that are ideally managed by an instate office.

This hybrid business model remains ideal under the current program(s) structure,

management of the state’s licensing program, political environment and this office’s

commitment to proactive program management and marketplace compliance.
SWOT Analysis


The strengths of this office are as follows:

                Trademark knowledge

                    Current management has over 8 years of experience within the

                    trademark licensing industry.

                Diversification of revenue

                    Management of the state’s licensing program provides an additional

                    revenue source that strengthens and diversifies the overall base of

                    revenue this office receives.

                Relationship with state

                    A collaborative relationship has been developed with the Secretary of

                    State and Attorney General’s office to ensure the BH&R mark is fully


                Marketing knowledge

                    Current management participate in numerous marketing committees

                    on campus. Management is also proactive in the development of new

                    and creative marketing programs each year—many of which have

                    been highlighted at licensing conferences.


The weaknesses of this office are as follows:

                Limited decision making ability with state’s program

                    Numerous situations arise each year that must be turned over to the

                    state for input and direction. Many of these decisions are minor, but
                    they are out of the scope of authority granted this office. This limited

                    authority ultimately leads to inefficiency.

                Awareness of office

                    Given the limited number of areas on campus that receive support

                    from this office, the awareness and relative influence of this office is

                    minimized. This has been detrimental to further developing and

                    maximizing the licensing program, as on-campus departments have

                    no reason to lend assistance or support licensing activities.


Opportunities that exist for this office are as follows:

                Campus support

                    Finding ways to increase funding to select campus program(s) would

                    in the long-term increase the awareness and value of the TLO to on-

                    campus departments.

                    A number of classes are taught each year at the university that deal

                    with product marketing and/or merchandising. With the assistance of

                    key colleges, a program could be developed with the TLO that would

                    give students an opportunity to apply their marketing/merchandising

                    education to retailers/manufacturers of UW products.

                Royalty Rates

                    An increase of royalty rates, as listed in the Fee Book, has been

                    approved by the university. Rates will increase from 6.5% for instate

                    and 7.5% for out of state licensees to 7% and 8% respectively. This

                    increase has not taken place as the state has not approved an

                    increase in royalty rates for non-collegiate BH&R products. This
                   change in royalty rates is likely to yield an additional $10,000 in gross

                   collegiate royalties per year.

              UW Merchandising

                   Wyoming retailers do the best they can in sourcing and displaying UW

                   products. However, the reality of what these retailers can sell is often

                   times not in line with the product/order minimums of licensees that sell

                   “higher-end” licensed products (e.g. tackle twill sweatshirts, name

                   brand headwear, outerwear, etc.). Unfortunately this has resulted in

                   many retailers not carrying UW products or carrying a very limited

                   selection (i.e. six tee shirts and a couple of hats). Continued

                   exploration in how the TLO can assist in solving this problem needs to

                   take place.

              State’s Licensing Program

                   The state has indicated a desire to re-examine the structure of their

                   licensing program. Subject to this examination and the final decision,

                   there may be an opportunity to significantly enhance the TLO’s

                   management of this program and the associated revenue.


Threats that this office faces are as follows:

              State’s Licensing Program

                   The state has indicated a desire to re-examine the structure of their

                   licensing program. Depending upon the direction this examination

                   goes, the university could lose its management of this program and

                   the associated revenue. As identified in the “Business Model” section

                   of this self-study, the management of a trademark licensing office by

                   the state would be accompanied by numerous marketplace and
       political issues, not to mention the fact that the state holds all federal

       registrations to the BH&R mark.

   Protection of BH&R mark

       In fiscal year 2004 the state was entrenched in a legal battle that

       could have ended in the state losing its federal trademarks to the

       BH&R mark, including those registrations related to the university.

       This will always remain a threat as long as the state holds all federal

       registrations to the BH&R mark. The benefits of the state’s protection

       efforts are not exclusive to the state’s program.
Recommended Action Plans For Improvement

Strategies or Initiatives Needed:

              Work proactively with the Secretary of State’s office in the review of the

               state’s licensing program to ensure any new program structure fully

               protects the BH&R mark, preserves the integrity of the university’s

               licensing efforts and continues to culminate a positive partnership

               between the university and state.

              Work with the Director of Auxiliary Services and the Vice-President of

               Administration in the establishment of a scholarship/funding review

               process that assists in moving forward the objectives of this office and

               benefits select campus programs.

              Continue seeking merchandising solutions that maximize the exposure of

               the university and distribution of UW products.
                                             Exhibit A

Select                                      Institution   Royalty
Institutions                                  Name         Rate

           1   The U of Alabama                                     8.0%
           2   University of Alabama Birmingham                     7.5%
           3   Alabama A&M                                          8.0%
           4   U of Alaska                                          7.5%
           5   U of Alaska, Anchorage                               7.5%
           6   Appalachian State U                                  8.0%
           7   The U of Arizona                                     8.5%
           8   U of Arkansas                                        8.0%
           9   U of Arkansas, Little Rock                           7.5%
          10   U of Arkansas, Monticello                            7.5%
          11   U of Arkansas, Pine Bluff                            7.5%
          12   Arkansas State U                                     8.0%
          13   Auburn U                                             8.0%
          14   Baylor University      C41                           7.5%
          15   Boise State U                                        7.5%
          16   Boston College                                       8.0%
          17   Boston University                                    7.5%
          18   Brigham Young U                                      7.5%
          19   California State U, Northridge                       7.5%
          20   U of Central Florida                                 7.5%
          21   U of Cincinnati                                      8.0%
          22   Citadel-The                                          6.5%
          23   Clarion U                                            7.5%
          24   Clemson U                                            8.0%
          25   Colgate U                                            7.5%
          26   College of Charleston                                8.0%
          27   University of Colorado                               8.0%
          28   Colorado State U    C55                              8.0%
               Colorado State U - Pueblo                            8.0%
          29   U of Connecticut                                     8.0%
          30   Coppin State College                                 7.5%
          31   Cornell U                                            7.5%
32   U of Delaware                      7.5%**
33   Drake U                             8.0%
34   Drexel U                            7.5%
35   Duke U                              8.0%
36   East Carolina U                     7.5%
37   Eastern Illinois                    7.5%
38   Florida A&M University              7.5%
39   U of Florida                        8.5%
40   Florida State U                     8.0%
41   Fresno State                        8.0%
42   George Mason U                      7.5%
43   George Washington U                 7.5%
44   Georgetown U                        8.5%
45   U of Georgia                        8.0%
46   Georgia State U                     7.5%
47   Georgia Tech                        8.0%
48   Gonzaga University                  7.5%
49   Hofstra U                           7.5%
50   U of Houston                        8.0%
51   U of Idaho                          8.0%
52   Idaho State U                       8.0%
53   U of Illinois                       8.0%
54   U of Illinois Alumni Association    8.0%
55   Indiana State U                     8.0%
56   James Madison U                     8.0%
57   University of Kansas                8.0%
58   Kansas State U                      8.0%
59   U of Kentucky                       8.0%
60   U of Louisiana at Lafayette         8.0%
61   U of Louisiana at Monroe            8.0%
62   Louisiana State U                   8.0%
63   Louisiana Tech University           8.0%
64   University of Louisville            8.0%
65   Marquette U                         7.5%
66   Marshall U      C94                 8.0%
67   U of Maryland                       8.0%
     Maryland-Fear the Turtle                            10.0%
68   U Maryland-Baltimore County                         7.5%
69   U of Memphis                                        8.0%
70   U of Miami                                          8.0%
71   U of Michigan                                       8.0%
     U of Michigan Admin Fee(one time only)
     U of Michigan Advance Fee
72   U of Mississippi                                    8.0%
73   U of Missouri                                       8.0%
74   U of Montana                                        8.0%
     Montana Griz Gear Program                           10.0%
     U of Montana Western                                8.0%
75   Montana State U                                     7.5%
     Montana State University Billings                   7.5%
     Montana State U College of Technology Great Falls   7.5%
     Montana State University Northern                   7.5%
76   Morgan State U                                      7.5%
77   U of Nebraska                                       8.0%
78   U of Nevada                                         7.5%
79   U of Nevada Las Vegas                               7.5%
80   U of New Hampshire                                  8.0%
81   U of New Mexico                                     8.0%
82   New Mexico State U                                  8.0%
83   U of New Orleans                                    6.5%
84   New York U                                          6.5%
85   SUNY, Albany                                        7.5%
86   U of North Carolina                                 8.0%
87   North Carolina A&T State U                          7.5%
88   North Carolina Central U                            7.5%
89   North Carolina State U     C176                     8.0%
90   U of NC-Charlotte                                   7.5%
91   U of NC-Greensboro                                  7.5%
92   U of North Dakota                                   8.0%
     North Dakota Sioux Indian Logo                      10.0%
93   U of North Florida                                  7.5%
94   U of North Texas                                    7.5%
95    Northeastern University                                           8.0%
96    Northern Arizona U                                                7.5%
97    Northwestern State University                                     8.0%
98    Northwestern U                                                    8.0%
99    University of Notre Dame (see end of list for additional info.)   8.0%
100   The University of Oklahoma                                        8.0%
101   Oklahoma State U                                                  7.5%
102   Old Dominion U                                                    7.5%
103   U of the Pacific                                                  7.5%
104   The Pennsylvania State U                                          8.0%
105   Pepperdine U       C142                                           7.5%
106   U of Pittsburgh                                                   8.0%
107   Portland State University                                         8.0%
108   Providence College                                                8.0%
109   Purdue U                                                          8.0%
      Indiana University-Purdue University Fort Wayne                   8.0%
110   U of Rhode Island                                                 7.5%
111   Rice University                                                   7.5%
112   Saint Joseph's University                                         7.5%
113   Saint Louis U      C76                                            7.5%
114   Sam Houston State University                                      8.0%
115   San Diego State U                                                 7.5%
116   San Jose State U                                                  8.0%
117   Santa Clara U                                                     7.0%
118   Slippery Rock U                                                   7.5%
119   U of South Alabama                                                6.5%
120   U of South Carolina                                               8.0%
121   U of South Florida                                                8.0%
122   Southern Illinois U                                               7.5%
123   Southern Methodist U                                              7.5%
124   Southern University                                               7.5%
125   Southern Utah University                                          8.0%
126   Southwest Texas State U                                           7.5%
127   Spelman College                                                   7.5%
128   St. Bonaventure U                                                 7.5%
129   St. Cloud State U                                                 8.0%
130   St. John's U                                                       8.0%
131   Stanford University   C126                                         8.0%
132   Stephen F. Austin State University                                 7.5%
133   Syracuse University                                                8.0%
134   Temple U                                                           8.0%
135   The U of Tennessee                                                 8.5%
136   Tennessee - Chattanooga                                            8.0%
137   Tennessee - Martin                                                 8.0%
138   Tennessee - Memphis                                                8.0%
      The University of Texas System
139                                                      at Austin   +   8.0%
140                                                       at Arlington   7.5%
141                                                     at Brownsville   7.0%
142                                                          at Dallas   7.0%
143                                                         at El Paso   8.0%
144                                 Health Science Center at Houston     8.0%
145                              Health Science Center at San Antonio    7.5%
146                                        Medical Branch at Galveston   7.5%
147                                                     -Pan American    7.5%
148                                               of the Permian Basin   7.0%
149                                                     at San Antonio   7.0%
150                             Southwestern Medical Center at Dallas    8.0%
151                                                           at Tyler   7.0%
152   Texas Christian U                                                  7.0%
153   Texas Tech U                                                       8.0%
154   U of Toledo                                                        7.5%
155   Towson University                                                  7.5%
156   Tulane U                                                           7.5%
157   U of Tulsa                                                         7.5%
158   Tuskegee University                                                7.5%
159   U of Utah                                                          8.0%
160   Utah State U                                                       7.5%
161   U.S. Air Force Academy                                             8.0%
162   U.S. Military Academy##                                            8.0%
163   Villanova U                                                        8.0%
164   U of Virginia                                                      8.0%
165   Virginia Commonwealth U                 7.5%
166   University of Washington                8.0%
167   Washington State University             8.0%
168   Wayne State U                           7.5%
169   Weber State U                           7.5%
170   Western Kentucky U                      7.5%
171   U of Wisconsin                          8.0%
172   U of Wyoming - out-of-state licensees   7.5%
      In-state licensees                      6.5%
173   Xavier U                                8.0%
      Xavier U "Cut Above" logo               10.0%

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