Licensing in Location-Based and Immersive Entertainment

Course Description

As the Experience Economy explodes, intellectual property is increasingly moving off the screen and into the physical world – through immersive attractions, branded destinations, experiential retail, touring experiences, competitive socializing, hospitality, and other forms of location-based entertainment (LBE). But when IP becomes a place, traditional licensing principles collide with real estate, significant capital investment, complex operations, and assets that can’t simply disappear when a license ends. This course explores the unique legal and business challenges of structuring LBE deals, including ownership, economics, approvals, risk allocation, term and termination, and the consequences of sunk capital. In traditional licensing, lawyers tend to follow the IP. In LBE, you also have to follow the capital.

Principles

• Location-based entertainment requires lawyers to follow both the IP and the capital.
  • Unlike traditional licensing, LBE transactions combine intellectual property rights with real estate, substantial capital investment, physical assets, and ongoing operations. Contractual rights and obligations should therefore reflect who is investing the money and who bears the resulting financial risk.
• The licensed rights must be defined broadly enough to accommodate evolving experiences.
  • Counsel should carefully address formats, locations, territories, channels, uses, and future adaptations. Because immersive experiences can evolve over time, agreements should provide appropriate flexibility while clearly defining the scope of the license and protecting the underlying IP.
• Ownership of physical and intellectual assets must be addressed expressly.
  • LBE deals can generate substantial physical infrastructure, content, improvements, and derivative IP. Agreements should clearly distinguish licensed IP, newly created content, derivative works, physical assets, and real-property improvements, including who owns, controls, and may use each asset during and after the relationship.
• Economics and operational control should be aligned with the parties’ investments and risks.
  • Royalty structures, revenue definitions, approvals, brand standards, and operational controls should reflect the parties’ respective contributions. Brand protection is important, but approval mechanisms cannot be so restrictive that they make the experience commercially or operationally unworkable.
• Term and termination provisions must account for sunk capital and the post-termination business.
  • In an LBE transaction, termination does not necessarily mean simply stopping the use of a trademark or other IP. Millions may already be invested in venues, infrastructure, equipment, and improvements. Agreements should therefore anticipate renewal, termination rights, transition periods, asset ownership, continued operations, de-branding, and other consequences when the licensed IP is no longer available.

Syllabus

1. The Experience Economy meets IP licensing: why LBE requires a different legal and business framework
2. Following the capital: who controls the IP, who deploys the capital, and who ultimately bears the risk
3. Defining licensed rights across evolving physical formats, uses, territories, and channels
4. Who owns what? Physical assets, licensed IP, newly created content, and derivative IP
5. Compensation structures, royalty bases, and aligning economics with investment
6. Approvals and brand control without making the experience impossible to operate
7. Term, renewal, and termination when millions of dollars may already be in the ground
8. Termination as enterprise risk: what happens to the venue, assets, and business when the IP goes away
9. Practical drafting strategies that align contractual leverage with real-world capital, operational, and business risk