STATE COLLEGE, PA. Penn State tightens trademark licensing

The plan would increase the university's revenue.
STATE COLLEGE, Pa. (AP) -- Penn State is tightening up on licensing of companies to produce hats and visors with the university's image to try to increase royalties the school reaps from the headgear sales.
"It carries more value if there are 15 head-wear companies than if there are 60," said Derek Lochbaum, the university's manager of trademark licensing.
Lochbaum said the university now licenses 60 to 70 headwear businesses, about 15 of which account for 95 percent of the sales.
Starting in 2004, International manufacturer Nike Inc. will be the only company to be automatically granted a license, according to a memo distributed by Collegiate Licensing Co. to all headwear licensees.
Proposals
Other headwear manufacturers that wanted to maintain a license had to submit a proposal by May 2 to the CLC and detail marketing strategies and distributors.
Lochbaum said the license contract decisions will be released in June. He said Friday that his office hadn't begun reviewing proposals.
University officials have said the streamlining of operations isn't intended to push local businesses away, but to brighten Penn State's brand image.
CLC denied that the new practice would automatically drive smaller manufacturers out of business.
Lochbaum said the university "recognizes the significance of our local partners and local licensees," and that the shift "should not be perceived as a way to eliminate good-quality licensing partners."
The change will include an increase in the university's share of sales revenue, which will jump from 8 to 10 percent in January. "From a business standpoint, it does generate more money, yes," Lochbaum said.
Lochbaum said that since Penn State's licensing program began in the early 1980s, it has produced about $26 million, which is earmarked for scholarships and student programs.