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Contract Highlights > Compensation - Pg. 227

Licensing Property Definition 227 Where the original public version of the property will be a game, the definition of the licensed property would make reference to the game by name and would incorporate all copyrights and trademarks including all characters, artwork, plots, music, story lines, costumes, vehicles, props, weapons, concepts, sets, and ideas. Note TIP While the developer may not have theleverage to resist a conglomerate's desireto license all entertainment and merchandise rights, the developer can try to negotiate to have some rights revert if the film'sproduction budget is less than a certainamount or to only grant those rights if thebudget exceeds a certain amount (seeChapter 6 for a discussion of the rela- tionship between options and reversions). Rights Granted For this kind of broad agreement, the licensee is acquiring the right to most forms of entertainment and merchandise. If the licensor already has certain licenses in place, such as a graphic novel or series of figurines based on the game, these should be noted in the contract as excludedcatego- ries of rights. Compensation A licensor will often receive three forms of compensation: rights fees, profit participations, and serv- ice fees. · Rights Fees. Rights fees are "front-end" compensation for the right to use the licensed property in the product. These may be complemented by "back-end" compensation, a share of profits