Publicity Clause

Written by: Patrick Shaunessy

20 minute read

What is a publicity clause?

A publicity clause is a contractual provision that establishes how, when and for what purpose a contract’s details may be disclosed to the public. Businesses may not want to broadcast the fact that they have entered into certain contracts; or, at the very least, they may want to control the manner in which this information is made public. Reasons why a business may be reluctant to publicise the details of a particular contractual relationship include competitive, strategic, legal and even reputational considerations. The purpose of the publicity clause, therefore, is to address these considerations by establishing appropriate rules and boundaries for communicating information about the contact, its subject matter, and the relationship between parties. As the examples below illustrate, these clauses can be found in many types of contracts.

Why does the publicity clause matter?

Being able to publicise a relationship with a key customer can go a long way toward establishing a vendor’s credibility. In particular, early-stage businesses that are fortunate enough to win business from one or more well-known companies stand to benefit greatly from the ability to use these marquee names in their marketing and advertising materials. On the other hand, these established companies may not be as eager to tell the world about their business dealings with a relatively unknown vendor. As noted above, there may be many reasons for this reluctance, including the effect it may have on their reputation. Even when a contract is formed between very well-established and well-known businesses, many of these same reasons dictate that publicity be handled in a controlled and coordinated manner.

A company’s brand can be an invaluable asset and a key contributor to its success. Once it is damaged, it can be very difficult to repair. Businesses, especially those that are well-established, therefore, typically put a lot of time and effort into protecting their brand. Knowing the details of publicity clauses across all of their contracts can help these businesses ensure that their vendors and other business partners are abiding by the boundaries that they’ve established with respect to public communication and promotion.

How do you review the publicity clause in contracts?

Finding publicity clauses when they appear in a clearly marked section in a contract is pretty straightforward. However, as the examples below illustrate, this won’t always be the case. Publicity clauses may have alternative section labels such as “marketing”, “use of name” or “customer reference”, or they may have no label at all (see example 11 below). And in some cases, they may be buried in the middle of dense provisions (see example 6 below), requiring careful review to spot.

After locating all the publicity language in each agreement, key things to focus on when reviewing these provisions include:

  1. How any publicity relating to the contract will be handled. Many publicity clauses require parties to consult each other (or, alternatively, one particular party to consult the other) prior to making any form of public announcement concerning the agreement, its subject matter, or the relationship between the parties. Some agreements may provide parties with more latitude in this respect than others. Example 4 below, for instance, contemplates an initial coordinated public announcement regarding the Agreement and its subject matter, after which each party has to make only “commercially reasonable efforts” to consult with the other about any further public, written announcement that it “reasonably anticipates would be materially prejudicial to the other”, giving the parties a fair amount of discretion regarding future announcements. Reviewers should also pay particular attention to “opt out”-type publicity clauses. Example 8 below, for instance, gives Vendor broad publicity rights for promotional and marketing purposes unless the subscriber provides notice to the contrary.
  2. Permitted exceptions to any restrictions. As the examples below illustrate, where a clause imposes restrictions on publicity, it is fairly common for it to include an exception for any disclosure, statement, etc. required by law. Other permitted exceptions will depend on the nature of the agreement and the parties’ intentions. Example 11 below, for instance, permits exceptions for any public statements that are “substantially similar” to those previously issued, which appears to be a practical expedient that the parties have agreed to for the purposes of that contract (though the phrase “substantially similar” may permit more interpretive latitude than intended). Example 6 below allows the Manager to issue “information to the public or the press in the ordinary course of managing the Project and carrying out its duties in accordance with the terms of this Agreement”, which again appears to be a practical exception. Example 6 also states that the restrictions on issuing “Press Releases” do not “apply to any general listing of Manager’s represented clients”, suggesting the Manager would be allowed to include the Owner’s name in a general list of its clients.
  3. Use of logos, trademarks, etc. for promotional purposes. Publicity clauses in certain types of agreements, such as SaaS agreements, may permit publicity for promotional purposes (either in general or with the consent of the other party). See, for instance, examples 8, 13 and 14 below. In such cases, note the extent to which the vendor is allowed to make use of the customer/subscriber’s name, logo and/or other trademarked property in its marketing and advertising materials. For instance, example 8 below mentions only the use of the subscriber’s name in print, online and other multimedia advertising and marketing materials; whereas examples 13 and 14 go a little further by allowing the vendor to use logos, photos and other materials for advertising and marketing purposes. And while the Client in example 14 has the right to veto the content and timing of published materials bearing its name, logo, etc., note that Vendor has the right to include the Client’s name in its published client list without needing to obtain the Client’s consent. These kinds of details may be of particular interest to businesses who have consented to the use of their name, etc. for promotional purposes to ensure that the other party is not exploiting this advantage beyond the bounds established by the publicity clause.

As with the review of any contractual provision, it’s also important to be aware of other provisions that may affect the interpretation of publicity clauses. For example, in cases where the clause requires one party to provide notice to the other (see, for instance, examples 1, 4, 5 and 8 below), the notice section of the agreement will detail how and to whom notice needs to be given for it to be effective. Where a clause uses defined terms that are not defined in the clause itself but that are necessary for its interpretation (for instance, “Brand Names” in example 7 below and “Proposed Transaction” and “Proprietary Information” in example 10 below), the defined terms section of the agreement should provide the definitions for such terms or indicate where in the agreement they are defined. The limitation of liability clause may contain important details regarding the scope of a party’s liability should the terms of the publicity clause be breached. Finally, the remedies section will establish what remedies, if any, a party may be entitled to should there be a breach of the publicity clause. This may include a right to terminate the agreement and/or a right to receive monetary damages.

Software that uses AI to identify and extract publicity clauses (as well as other terms that may affect their interpretation) can accelerate the work of finding these provisions and enable a more comprehensive review than can otherwise be done manually.

Examples of the publicity clause

Below are some examples of publicity clauses from different kinds of agreements. While these examples do not necessarily cover the full range of publicity clauses one may encounter, they are meant to illustrate the degree to which these provisions can vary from contract to contract. Where an example includes broader contextual language, the publicity clause is highlighted in bold.

Example 1: From a Software License Agreement

10.2 Publicity. The particular terms and conditions of this Agreement are confidential and shall not be disclosed by either party without the prior written consent of the other party. Either party shall issue no public announcements relating to this Agreement without giving the other party prior written notice. Notwithstanding anything stated herein, the parties agree to issue a joint press release announcing the relationship initiated hereunder and to cooperate in other joint promotional opportunities and announcements.

Example 2: From a Software License and Services Agreement

MARKETING 10.1 Customer List. Customer shall allow Vendor to add Customer’s name and logo to a list of Vendor customers for use in marketing and promotion materials, collateral, presentations and publications with the prior consent of Customer in each instance.

Example 3: From a Supply Agreement

3.10 Company agrees to use Supplier’s Logo on all advertising (including web advertising) and trade show displays related to Databases and/or Services, unless such use is terminated pursuant to the last sentence of this Section 3.10. All advertising and trade show displays based on Supplier products and written public statements regarding Supplier and Supplier products will be approved in advance in writing by Supplier. Company acknowledges the ownership and renown of all trademarks, logos and tradenames (“Marks”) used by Supplier prior to this agreement. Company will maintain a high quality standard in connection with products and services promoted in connection with Supplier’s Marks. Company hereby authorizes Supplier to use Company’s name and trademarks for the purpose of promoting Supplier’s products and services, but Supplier may not do so without Company’s prior written consent. If, in each party’s sole discretion, the other party’s use of the first party’s Marks does not meet the first party’s usage policy, the first party may, at its option, terminate the other party’s use of the first party’s Marks.

Example 4: From an International Distribution Agreement

  1. Publicity. Company and Distributor each agree that the initial public, written announcements regarding the execution of this Agreement and the subject matter addressed herein shall be coordinated between the parties prior to release. Thereafter, each party agrees to use commercially reasonable efforts to consult with the other party regarding any public, written announcement which a party reasonably anticipates would be materially prejudicial to the other party. Nothing provided herein, however, will prevent either party from (a) making and continuing to make any statements or other disclosures it deems required, prudent or desirable under applicable Federal or State Securities Laws (including without limitation the rules, regulations and directives of the Securities and Exchange Commission) and/or such party’s customary business practices, or (b) engaging in oral discussions or oral or written presentations with actual or prospective investors or analysts regarding the subject matter of this Agreement, provided no confidential information is disclosed. If a party breaches this Section 36 it shall have a seven (7) day period in which to cure its breach after written notice from the other party. A breach of this Section 36 shall not entitle a party to damages or to terminate this Agreement.

Example 5: From a Manufacturing and Supply Agreement

Section 13.5 Publicity. The Parties covenant and agree that, except as provided for herein below, each Party will not, from and after the date hereof, originate any publicity or other announcement (whether written or oral), including the making, issuance or release any public announcement, press release, statement or acknowledgment of the existence of, or reveal publicly the terms, conditions and status of, this Agreement and the transactions contemplated herein, whether to the public, the press, the trade, Manufacturer’s or Distributor’s customers or otherwise, without the prior written consent of the other Party as to the content and time of release of and the media in which such statement or announcement is to be made; provided, that (a) Manufacturer is permitted to issue Seller Notices and Third Party Consents (as each term is defined in the Asset Sale and Purchase Agreement) in accordance with the terms of the Asset Sale and Purchase Agreement, provided that Manufacturer is permitted to disclose only (i) the co-exclusive nature of this Agreement and (ii) the existence of the Asset Sale and Purchase Agreement (including the identity of Buyer (as such term is defined therein)) to the counterparties of the Distributor Contracts (as defined in the Asset Sale and Purchase Agreement) therein without Distributor’s prior written consent, and (b) in the case of announcements, releases, statements, acknowledgments or revelations which either Party is required by Law to make, issue or release, the making, issuing or releasing of any such announcement, release, statement, acknowledgment or revelation by the Party so required to do so by Law shall not constitute a breach of this Agreement if such Party shall have given, to the extent reasonably possible, not less than two (2) days’ prior notice to the other Party, and shall have attempted, to the extent reasonably possible, to clear such announcement, release, statement, acknowledgment or revelation with the other Party. Notwithstanding the foregoing, Manufacturer shall not use the name of Distributor or any of its Affiliates for advertising or promotional purposes without the prior written consent of Distributor.

Example 6: From a Management Agreement

9.3 Confidentiality; Non-Solicitation. Each party hereby agrees to protect the financial and other confidential and/or proprietary information provided by the other party from any use, distribution or disclosure except as permitted herein. Each party shall use the same standard of care to protect said information as is used to protect its own confidential and proprietary information, but under no circumstance shall either party use less than a reasonable standard of care. The parties shall consult with each other in preparing any press release, public announcement, statement to the press, or other form of release of information to the news media or the public that is related to this Agreement or the relationship of the parties hereto (a “Press Release”); provided, however, that the foregoing shall not (a) restrict Manager from issuing information to the public or the press in the ordinary course of managing the Project and carrying out its duties in accordance with the terms of this Agreement, or (b) apply to any general listing of Manager’s represented clients. During the term of this Agreement, Owner shall not solicit any employee of Manager for employment, and for an additional one (1) year period following the termination or expiration of this Agreement, Owner shall not solicit or hire any Regional Manager which was assigned to the Project during the Term of this Agreement.

Example 7: From a Distribution Agreement

  1. Use of Names; Publicity.

The Trust shall not use the Distributor’s name in any offering material, shareholder report, advertisement or other material relating to the Trust, other than for the purpose of merely identifying and describing the functions of the Distributor hereunder, in a manner not approved by the Distributor in writing prior to such use, such approval not to be unreasonably withheld. The Distributor hereby consents to all uses of its name required by the Commission, any state securities commission, or any federal or state regulatory authority.

The Distributor shall not use the Trust’s name nor any of the Brand Names in any offering material, shareholder report, advertisement or other material relating to the Distributor, other than for the purpose of merely identifying and describing the functions of the Trust hereunder, in a manner not approved by the Trust in writing prior to such use; provided, however, that the Trust shall consent to all uses of its name required by the Commission, any state securities commission, or any federal or state regulatory authority; and provided, further, that in no case shall such approval be unreasonably withheld.

Example 8: From a SaaS Agreement

11.10 Use of Subscriber’s Name. Unless you provide Vendor with written notice to the contrary, you give Vendor the right to use your name in print, on-line, and in other multimedia advertising and marketing materials for the purpose of disclosing that you are a customer of Vendor.

Example 9: From a License and Supply Agreement

Section 15.02. Publicity Review. The Parties agree that the public announcement of the execution of this Agreement shall be in the form of press releases issued by each of the Parties on or before the Effective Date and thereafter each Party shall be entitled to make or publish any public statement consistent with the contents thereof. The Parties acknowledge the importance of supporting each other’s efforts to publicly disclose results and significant developments regarding the Product. The principles to be observed by Licensor and Licensee in such public disclosures will be: accuracy, compliance with FDA Regulations and other FDA guidance documents and other Applicable Laws, the advantage a competitor of Licensor or Licensee may gain from any public statements under this Section 15.02, and the standards and customs in the biotechnology and pharmaceutical industries for such disclosures by companies comparable to Licensor and Licensee. The terms of this Agreement may also be disclosed by a Party to: (a) government agencies where required by law, including filings required to be made by law with the United States Securities and Exchange Commission (“SEC”), (b) Third Parties with the prior written consent of the other Party, which consent shall not be unreasonably withheld, or (c) lenders, investment bankers and other financial institutions solely for purposes of financing the business operations of such Party, so long as such disclosure in (b) and (c) above is made under an agreement of confidentiality at least as restrictive as the confidentiality provisions in Section 15.01, to the extent possible highly sensitive terms and conditions such as financial terms are extracted from the Agreement (including in any disclosure required by law or the SEC) or deleted upon the request of the other Party, and as the disclosing Party gives reasonable advance notice of the disclosure under the circumstances requiring the disclosure.

Example 10: From a Non-Disclosure Agreement

4.1 No Public Disclosure Required. Each party expressly confirms and agrees that, as of the date hereof, it is not required to make any public disclosure with respect to (a) the Proposed Transaction (or the terms or conditions of any other acts relating thereto), (b) any item of Proprietary Information (or the fact that Proprietary Information has been made available to such party), or (c) any discussions or negotiations taking place between the parties with respect to the Proposed Transaction, whether pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the rules and regulations promulgated thereunder, or similar requirements related to general disclosure. If, after the date of this Agreement either party determines that any such disclosure is required, no such disclosure shall be made unless and until such party consults with the other party regarding the necessity and form of any such disclosure, and provides the other party a reasonable opportunity to review the proposed disclosure and comment thereon.

Example 11: From a Distribution Agreement

SECTION 15.04. The Parties shall consult with each other before issuing, and give each other the reasonable opportunity to review and comment upon, any press release or other public statements with respect to this Agreement and the transactions contemplated hereby and shall not issue any such press release or make any such public statement prior to such consultation, except (i) as such Party may reasonably conclude may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange or national securities quotation system, in which case the receiving Party shall give the disclosing Party as much advance notice of such disclosure as is reasonably possible and shall otherwise comply with Section 15.03, to the extent applicable, and (ii) communications that are substantially similar to communications previously approved pursuant to this Section 15.04. The initial press release to be issued with respect to the transactions contemplated by this Agreement shall be in a form agreed to by the Parties.

Example 12: From a Manufacturing and Supply Agreement

10.11 Press Releases; Use of Trademarks. The Parties agree not to disclose any terms or conditions of this Agreement to any Third Party without the prior consent of the other Party, save as permitted pursuant to the Confidentiality Agreement. Neither Party shall (a) issue a press release or make any other public statement that references this Agreement or (b) use the other Party’s or the other Party’s Affiliates’ names or trademarks for publicity or advertising purposes, except with the prior written consent of the other Party, save as permitted pursuant to the Confidentiality Agreement or Securities and Exchange Commission filings which are required by Applicable Law, in which instance both Parties shall work together in good faith to agree the disclosure to be made having due and proper regard to their legal obligations. Each Party agrees that it shall cooperate fully and in a timely manner with the other with respect to all disclosures to the Securities and Exchange Commission or any other governmental or regulatory agencies, including requests for confidential treatment of Proprietary Information of either Party included in any such disclosure.

Example 13: From a SaaS Agreement

  1. Customer Reference. You agree (i) that Vendor may identify you as a recipient of Services and use your logo in sales presentations, marketing materials and press releases, and (ii) to develop a brief customer profile for use by Vendor on its website for promotional purposes.

Example 14: From a SaaS Master Agreement

18.1. Publicity. Client hereby grants the Vendor permission to distribute press releases upon completion of various project milestones (e.g., contract signature) and a case study upon project completion. Such publicity may appear in business or trade publications, in the Vendor’s publications, and/or on the Vendor’s web site. Client will provide the Vendor with a storefront photo and company logo for use in such published materials. Any published material will be subject to Client’s consent to both content and timing, such consent not to be unreasonably withheld or delayed; provided, however, that Client grants the Vendor the right to include Client’s name in the Vendor’s published client list without the need for Client’s consent. Notwithstanding anything to the contrary, Client acknowledges that the Vendor has a legal obligation to announce any material contracts and, accordingly, Client agrees that the Vendor will announce the execution of this Agreement, without the need for Client’s consent.

Example 15: From a Mutual Non-Disclosure Agreement

  1. Miscellaneous.

(a) Use of Names; Publicity. Except as otherwise provided herein, nothing contained in this Agreement shall be construed as conferring any right on Receiving Party to use in any manner Disclosing Party’s name or any trade name or trademark. Receiving Party will make no public announcement or other public statement concerning the existence of this Agreement or the Parties’ respective performances hereunder without the prior written consent of Disclosing Party, which may be withheld in Disclosing Party’s sole and absolute discretion, except as necessary to comply with applicable law or regulations.