I guess I could just call the University, eh? Duh. Homer Simpson moment.
Works for me.
Companies produce logo-marked products for the rights-holder all the time. If you really want to CYA, you could get them to sign an agreement that, because you are producing the product at their request and for sale solely to them, they won't sue you for imprinting it with their logo at their request. They might look at you a little funny, but it *is* California, after all. If they're a prestigious client or the product looks especially good with the logo, you might want to add a clause about getting to use images of the product in your advertising.
I would recommend against selling any overruns to others, though.
