Licensing, royalties and product enhancement

[JohnR243]

I purchased a number of rubber molds from a company for use in making modeling pieces(miniature bricks, stones etc) to build castles, forts etc...about 3 yrs ago. I came up with the idea of using them for a completely different market area, which the owner didnt even know about, and still doesnt by his own admission. None of the items I have designed are even near exact copies of the products his molds produce but I do use some of the block pieces in my designs. They had a licensing agreement in place if you used their molds to make items and sold them and made more than $1,000.00 in a year. I have no problem paying the licensing fee but I think asking for royalties on my designs is ridiculous, especially since he himself told me that if i made slight changes to the textures, size etc, they would be my own designs and no licensing or royalties would apply. I can make the designs changes but it will cost me a good deal of money to make all new molds of my own designs. Am i right about the royalties or ?
Thanks for the feedback in advance

 

[Michael Wechsler]

I confess, this is a good question. You may want to speak to a lawyer given the specifics and potential cost involved. My gut feeling tells me that you may want to consider creating your own molds and not being involved in a relationship with the company if you can help it. If you've got an ability to negotiate a deal with this company you may want to (without spilling the beans) see whether the company will agree to put what was told to you in writing. My gut feeling says they probably won't do this as it would seem they would give up their rights in the "derivative works" that are created from an underlying work. Let us know how things turn out and good luck.