University severs eight licensee contracts
The university announced today, March 29, that it has terminated the contracts of eight licensed manufacturers for not disclosing the locations of their factories.
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Combined, the eight companies generated $3,204.11 in royalty income during the first three quarters of the 1999-2000 fiscal year. Two companies did not generate any royalty income at all. None of the eight are based in Wisconsin.
“Full public disclosure is essential to ensuring that products and apparel bearing the university’s trademarks are manufactured without the use of sweatshop labor,” says Cindy Van Matre, director of the UW–Madison Office of Trademark Licensing. “I am pleased that we have received high cooperation from our licensees, and that most of them disclosed as we requested.”
UW–Madison began requiring full public disclosure Jan. 1, and more than 90 percent of the university’s 445 licensed manufacturers had complied as of March 1. The university then sent letters via the Collegiate Licensing Company to the remaining companies, giving them until March 27 to identify their factory sites to the CLC.
Van Matre pointed out that the terminated companies are not among the university’s top licensees.
The CLC, which helps the university administer its trademark licensing program, sent termination letters March 28 on behalf of UW–Madison to the eight companies. The letter reads in part: “Since you have not resolved this breach within the specified time, your license to use the marks of the University of Wisconsin is hereby terminated. Your company no longer has the right to manufacture, advertise, distribute, or sell products bearing the marks of this institution.”
CLC officials say UW–Madison has one of the highest response rates for public disclosure among its 180 member institutions.
University officials maintain that full public disclosure is the first step toward inspecting companies that produce sweatshirts, caps, jackets and other goods with university trademarks, including the popular Bucky Badger and the motion “W.” This type of monitoring, they add, is critical to ending sweatshop labor.
UW–Madison is currently monitoring factories in Costa Rica, Korea and Mexico as part of a pilot project with four other universities, and is exploring other avenues for regular monitoring as well.
UW–Madison disclosure information indicates that about 70 percent of factories are in the United States. The others are spread among 37 countries.
The university implemented its disclosure requirement after reaching an agreement with concerned students following a protest in February 1999. In addition to full public disclosure, university licensees must prohibit any discrimination and harassment of female workers and follow the terms of the CLC’s draft code of conduct for workplace conditions.
Among other things, those conditions cover such items as wages, hours worked, ages of workers and safety issues. Overall, UW–Madison’s requirements for its licensed manufacturers are among the toughest in the nation.
UW–Madison collected more than $1.2 million in royalties in 1998-99 from the sale of sweatshirts, hats and other merchandise bearing UW–Madison trademarks. Income through the first three quarters of the 1999-2000 fiscal year already equals last year’s total.
Royalty income is shared between financially needy students and the Athletic Department. This academic year, 375 undergraduate students, many from Wisconsin, received Bucky Badger Grants averaging $1,000, according to the UW–Madison Office of Student Financial Services.
The Athletic Department uses its portion of the income to remain primarily self-supporting. About 1 percent of Athletics’ budget comes from state tax revenue, and those funds finance women’s sports.
Royalty income has exceeded $1 million in each year but one (1997-98) since the Badgers first won the Rose Bowl in 1994. UW–Madison ranks 10th in merchandise sales nationally in the CLC.