1.0 The Commissioned Work

The commission and brief shall be confirmed in writing before proceeding, the services, fees and royalty being stated, together with an estimate of cost for various stages if applicable. No work will be commenced without written agreement. Each stage of the commissioned work shall be deemed accepted by the client at the commencement of the next stage unless notified in writing prior to the commencement of the next stage.

The commissioned work shall be deemed complete and accepted by the client and all obligations of the design office shall be fulfilled by mutual agreement or no later than the start of manufacture of the product and or production of the commissioned design work if applicable.

2.0 Duties of the Design Office

The design office undertakes to abide by the Articles of Ethical Practice of the Industrial Design Society of America. When working elsewhere, the design office will observe the rules of professional conduct of the representative professional association in the country concerned.

3.0 Duties of the Client

The client undertakes to offer it’s full co-operation to the design office for the execution of the commissioned work, supplying at any time all technical specifications and information requested by the design office for the completion of the commissioned work, including but not limited to all previous relevant project developments and programmes with regard to the commissioned work.

4.0 Payment

The design office shall be paid such a fee or fees in such currency as may have been agreed (including where relevant taxes or other statutory additions) together with all related royalties, costs and expenses. All monies so due shall be paid during the month following submission of an invoice by the design office. Invoices will be submitted by the design office at the end of each calendar month for the work carried out during that month, or at set stages in the work as agreed in advance.

The design office shall be entitled to charge interest at a cumulative rate of 4% per annum above HSBC USA base rate on all sums due and in respect of each calendar month after such sums have become due and payable.

5.0 Expenses

In addition to fees, the design office shall be reimbursed at cost for all reasonable out-of-pocket expenses (whether by the design office or by any other person engaged on the commission) actually and properly incurred in the execution of the commission. Such expenses will include but without limitation hotel, subsistence and traveling expenses, use of car, telephone and facsimile charges, courier services etc.

The design office shall promptly communicate statements of the above referred expenses to the client which shall be considered approved and accepted for payment 15 days after the receipt thereof.

6.0 Costs

Costs incurred by the design office for such item as prints and other reproductions of drawings, typesetting, the provision of models, prototypes etc. furnished at the client’s request or with the client’s approval (unless they comprise the design proposal and are included in a fixed fee agreement) shall be charged separately. The design office is entitled to add a handling fee for this service.

7.0 Non-payment

Until all fees costs and expenses have been paid the title of and ownership in all physical and digital material produced by the design office (including but without limitation sketches, drawings, models or prototypes) shall remain with the design office.

8.0 Documents

The design office shall be entitled to one final model, sample of the prototype, photographs of models, samples and prototypes, brochure of models, samples or prototypes in a reasonable quantity sufficient for an adequate documentation of the commissioned work.

9.0 Use of Work

The design or other work carried out in accordance with the commission shall not be used for any other purposes other than that for which it was commissioned (without the prior written approval of the design office). In no circumstances may any work in rough or incomplete form be used or published as finished work without the prior written approval of the design office and then only in terms prescribed and agreed by the design office. The design office shall at all times be entitled to use for the purposes of promotion any of the commissioned work or any description or illustration of the commissioned work (even if the intellectual property rights have been assigned to the client) unless otherwise agreed.

10.0 Modifications

No modification or alterations to any designs or other work created as a result of the commission may be made without the consent of the design office. Any agreed modifications or alterations shall only be carried out by or under the supervision of the design office and shall be paid for at a rate agreed with the design office in advance.

11.0 Intellectual Property Rights

 All intellectual property rights arising in all or any of the work created by the design office are and shall remain the property of the design office. Any fees or royalties paid to the design office shall not be deemed to include any transfer of any such intellectual property rights.

12.0 Licence

Where applicable, the design office will grant to the client a licence for the manufacturing, sale and distribution of the product manufactured utilizing the intellectual property upon agreement of the terms, conditions and the payment of royalties. The licence granted includes the right to manufacture, sell and distribute the products; manufacturing, sale and distribution of the products shall be carried out by the client or its affiliated, associated or subsidiary companies; any sub-licence to third parties must be notified to the design office and such licence is to be assigned on terms mutually agreeable to the client and the design office.

13.0 Royalty

In consideration of this licence and starting from the beginning of sales of the products the client shall pay to the design office a royalty. Royalties shall be calculated on all sales of the products. The products are defined as those designed by the design office and shall include any modifications amendments and derivations to the designs. These modifications, amendments and derivations to the designs, whether agreed or not, shall be included in the calculation of the royalties. The payment of royalties will be effected on a quarterly basis. The design office shall pay all taxes, levies and duties of any kind arising out of or in connection with this agreement for payment of royalties. If any such taxes, levies or duties are paid by the client; the design office shall promptly reimburse the client in the respective amount upon receipt of appropriate certificates or other relevant documentation. At the same time as payment of any royalties under this agreement falls due the client shall submit or cause to be submitted to the design office a statement in writing recording the calculation of royalties due and payable.

14.0 Records

The client shall keep proper records and books of account showing the total value of sale income received by the client originating from the commercial manufacture of the Product and such books shall be kept separate from any records and books not relating to the product and to be open at reasonable times upon prior agreement with the client such agreement not to be unreasonably withheld or delayed to inspection by the design office or their duly authorised agent or representative on up to 2 occasions in any year who shall be entitled to take copies of or extracts from the same. In the event that such inspection or audit should reveal a discrepancy in the royalties paid from those payable under this Agreement, the client shall immediately make up any shortfall. Should the discrepancy be in favour of the client of more than 5%, the client shall reimburse the design office in respect of any reasonable professional charges incurred for such audit or inspection.

15.0 Design Credits

The design office asserts its right to be identified as the author of any design work or product which has been created as a result of the commission and any publication of that work relating to that product shall bear a clear and distinctive credit to the design office as approved by the design office. The design office’s name, shall not be registered in any way or used upon or in relation to any of the commissioned work unless asserted as above or approved in advance by the design office in writing.

16.0 Registration

The design office shall not have the responsibility for protecting the design office’s intellectual property rights in any part of the world whether by way of registration or otherwise but the client shall be entitled at its own expense to protect the intellectual property rights of the design office and to protect and exploit the client’s rights under the license granted as the client deems necessary. The client shall have the right but not the obligation to file, maintain, prosecute and litigate the intellectual property rights of the design office. If any intellectual property rights arising in respect of the commissioned work are acquired from the design office by the client, the design office shall, where reasonably requested assist in any application for registration of any such rights. Any costs incurred by the design office shall be paid by the client.

17.0 Liability

The client shall hold harmless, indemnify and defend the design office against all costs, claims, damages, expenses or other liabilities of whatsoever nature and howsoever and whensoever incurred by or made against the design office in respect of all or any claims of whatsoever nature and howsoever, wheresoever and whensoever arising against the design office arising out or in relation to the design manufacture, sale and distribution of the Products (or any of them) by any party, save only to the extent that such claims are attributable to the negligence of the design office and/or to the extent that any claim arose from the design office having knowingly infringed the intellectual property rights of a third party.

18.0 Legal Requirements

It is the client’s responsibility to ensure that the work complies with the laws of the country for which it is intended.

19.0 Termination of Agreement

Any agreement between the design office and the client shall terminate (a) if either party commits a breach of it and fails to remedy the breach within twenty-eight days after receiving notification in writing from the other party specifying the breach and requiring remedy, (b) if the other party commits any act of bankruptcy or commences any proceedings of winding up (other than for the purposes of amalgamation or reconstruction) or if an Administrator, Receiver or Liquidator is appointed for the whole or any part of the business of such party.

20.0 Consequences of Termination

On termination of the agreement or postponement of the commission, or any part of it, for any reason, the design office shall be entitled to full remuneration for any work undertaken to the date of termination or postponement, either based on the time involved up to the date of termination or postponement or the percentage due for the work completed by that date, whichever is the greater. In addition the design office shall be entitled to reimbursement for all costs and expenses incurred up to the date of termination or postponement.

Any licences for the exploitation of the intellectual property rights granted to the client or if the intellectual property rights in any of the commissioned work have have been assigned to the client, such licences and/or rights shall, in the event of any such termination or postponement automatically revert to and shall be as- signed to the design office and the client shall sign all documents and do all such acts in order to fulfill the same.

21.0 Resumed Commission

If the postponed commission is resumed without substantial alteration within a period of one year from the date of postponement, any fees paid shall rank as payments on account towards the final fee payable on completion of the work. Where the commission has been postponed for a period exceeding one year and then resumed, any fees paid shall be regarded as final payment for the services originally rendered. The resumed commission shall be deemed to constitute a separate contract for which fees shall be re-negotiated.

22.0 Interpretation

Any questions of interpretation arising out of these conditions of engagement may be referred by the design office or the client to the Industrial Design Society of America, or the relevant professional body of the country concerned should the commission be outside the USA, for decision at any time, provided always that such decision is sought on a statement of undisputed facts and submitted jointly by both parties who undertake to accept the decision as final.

23.0 Governing Law

These conditions of engagement will be governed and construed in accordance with New York State Law or, if outside the USA, the law of the relevant jurisdiction.