Anytime you see an event "brought to you by" a company or a corporate logo on a sports uniform, you are looking at a clear-cut example of corporate sponsorship. Aside from a bevy of advertising methods, corporations frequently look to unconventional means to shop their product or brand. Sponsoring an event, individual or organization is a way for firms to rise above the pack. A corporate sponsorship agreement is a legally complicated document that provides protections for both parties entering into the agreement.
What is Corporate Sponsorship?
Corporate sponsorship is a form of advertising in which companies pay for an event, program or individual in return for the brand recognition and visibility generated by the event or individual. Corporate sponsorship can range from covering the costs of a single event (like the Super Bowl) or sponsoring an entire sports team throughout the year. No matter what type of sponsorship is involved, the legal documents that outline these agreements have a few provisions in common.
Scope of Work and Payment
Corporate sponsorship agreements include legal provisions that define what type of work an individual or organization will do and how much they will be paid for it. Often, corporate sponsorship payments will be staggered over the course of a promotion or project. A percentage will be paid upfront, some during the course of the work and another percentage paid upon successful completion of the work itself. Corporate sponsorship agreements may include provisions for additional funds that can be requested by the individual or organization depending on their needs.
Materials Provided and Ownership
During a corporate sponsorship, materials of some sort will be needed. These may be materials crucial to the completion of the promotion, but more often than not are actual products the company sells or is trying to promote. Typically, those sponsored by corporations don't have to pay out of pocket for the products or services they are promoting. However, it is vitally important in any sponsorship agreement to establish who owns the product after the sponsorship is complete. Failure to do so can lead to legal complications afterward.
Intellectual Property Rights
Even more important than physical product ownership is the intangible ownership of ideas, concepts and results of sponsorship. In the case of corporate sponsorship of university research, it is crucial to legally outline who owns the results of the research. Corporations sponsoring events or individuals should also include strict legal protection for their product ideas, marketing concepts and brand identity. These can be misused by organizations or individuals after the sponsorship is over if corporations aren't careful.
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