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                                                                EXHIBIT 10.3



              PATENT, TRADEMARK AND COPYRIGHT COLLATERAL ASSIGNMENT
                                    (Parent)

      This Patent, Trademark and Copyright Collateral Assignment (the
"Assignment"), dated April **, 1998, is entered into by and between PARTY CITY
CORPORATION, a Delaware corporation (the "Assignor"), and PNC BANK, NATIONAL
ASSOCIATION, a national banking association, in its capacity as agent for the
Banks (the "Assignee").

      WHEREAS, pursuant to that certain Credit Agreement (as amended, restated,
modified or supplemented from time to time, the "Credit Agreement") of even date
herewith by and among Assignor as borrower, each of the Guarantors, the Banks
and Assignee, the Banks have agreed to provide certain loans to the Assignor and
the Assignor has agreed, among other things, to assign to the Assignee certain
patents, trademarks, copyrights and other property as security for such loans
and other obligations as more fully described herein.

      NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:

      1. Except as otherwise expressly provided herein, capitalized terms used
in this Assignment shall have the respective meanings given to them in the
Credit Agreement.

      2. To secure the payment and performance of all Indebtedness and other
obligations of the Assignor now or hereafter existing under the Credit Agreement
and the other Loan Documents, including, without limitation, principal,
interest, fees, expenses, costs and expenses of enforcement, reasonable
attorney's fees and expenses, and obligations under indemnification provisions
in the Loan Documents (collectively, the "Secured Obligations"), Assignor hereby
grants, assigns and conveys to Assignee the entire right, title and interest of
Assignor in and to all trade names, patent applications, patents, trademark
applications, trademarks and copyrights whether now owned or hereafter acquired
by Assignor, including, without limitation, those listed on Schedule A hereto,
including all proceeds thereof (such as, by way of example, license royalties
and proceeds of infringement suits), the right to sue for past, present and
future infringements, all rights corresponding thereto throughout the world and
all reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, and the goodwill of the business to which any of
the patents, trademarks and copyrights relate (collectively, the "Patents,
Trademarks and Copyrights").

      3. Assignor covenants and warrants that:

            (a) The Patents, Trademarks and Copyrights are subsisting and have
not been adjudged invalid or unenforceable, in whole or in part;
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            (b) To the best of Assignor's knowledge, each of the Patents,
Trademarks and Copyrights is valid and enforceable;

            (c) Except for Permitted Liens, Assignor is the sole and exclusive
owner of the entire and unencumbered right, title and interest in and to each of
the Patents, Trademarks and Copyrights, free and clear of any liens, charges and
encumbrances, including without limitation pledges, assignments, licenses, shop
rights and covenants by Assignor not to sue third persons;

            (d) Assignor has the corporate power and authority to enter into
this Assignment and perform its terms;

            (e) No claim has been made to Assignor or, to the knowledge of
Assignor, any other person that the use of any of the Patents, Trademarks and
Copyrights does or may violate the rights of any third party;

            (f) Assignor has used, and will continue to use for the duration of
this Assignment, consistent standards of quality in its manufacture of products
sold under the Patents, Trademarks and Copyrights; and

            (g) Assignor has used, and will continue to use for the duration of
this Assignment, proper statutory notice in connection with its use of the
Patents, Trademarks and Copyrights.

      4. Assignor agrees that, until all of the Secured Obligations shall have
been satisfied in full, it will not enter into any agreement (for example, a
license agreement) which is inconsistent with Assignor's obligations under this
Assignment, without Assignee's prior written consent which shall not be
unreasonably withheld.

      5. If, before the Secured Obligations shall have been satisfied in full,
Assignor shall own any new trademarks or any new copyrightable or patentable
inventions, or any patent application or patent for any reissue, division,
continuation, renewal, extension, or continuation in part of any Patent,
Trademark or Copyright or any improvement on any Patent, Trademark or Copyright,
the provisions of this Assignment shall automatically apply thereto and Assignor
shall give to Assignee prompt notice thereof in writing. Assignor and Assignee
agree to modify this Assignment by amending Schedule A to include any future
patents, patent applications, trademark applications, trademarks, copyrights or
copyright applications and the provisions of this Assignment shall apply
thereto.


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      6. Unless and until the Secured Obligations are declared due and payable
pursuant to the Credit Agreement, Assignee hereby grants to Assignor the
exclusive, nontransferable right and license under the Patents, Trademarks and
Copyrights to make, have made for it, use and sell the inventions and products
disclosed and claimed in the Patents, Trademarks and Copyrights in accordance
with any specifications provided by Assignee for Assignor's own benefit and
account and for none other. All use by Assignor of the trademarks which are part
of the Patents, Trademarks and Copyrights shall inure to the benefit of
Assignee. Assignor agrees not to sell or assign its interest in, or grant any
sublicense under, the license granted to Assignor in this Paragraph 6, without
the prior written consent of Assignee which shall not be unreasonably withheld.
Assignee reserves the right upon reasonable notice during normal business hours
to inspect the operations and facilities of Assignor from time to time for the
purpose of ensuring that the standards and quality requirements of Assignee are
met.

      7. If and during the period that the Secured Obligations are declared due
and payable pursuant to the Credit Agreement, Assignor's license under the
Patents, Trademarks and Copyrights as set forth in Paragraph 6 shall terminate,
the Banks shall have, in addition to all other rights and remedies given them by
this Assignment, those allowed by Law and the rights and remedies of a secured
party under the Uniform Commercial Code as enacted in any jurisdiction in which
the Patents, Trademarks and Copyrights may be located and, without limiting the
generality of the foregoing, Assignee may immediately, without demand of
performance and without other notice (except as set forth below) or demand
whatsoever to Assignor, all of which are hereby expressly waived, and without
advertisement, sell at public or private sale or otherwise realize upon, in
____________, New Jersey, or elsewhere, the whole or from time to time any part
of the Patents, Trademarks and Copyrights, or any interest which Assignor may
have therein, and after deducting from the proceeds of sale or other disposition
of the Patents, Trademarks and Copyrights all expenses (including fees and
expenses for brokers and attorneys), shall apply the remainder of such proceeds
toward the payment of the Secured Obligations as the Assignee, in its sole
discretion, shall determine. Any remainder of the proceeds after payment in full
of the Secured Obligations shall be paid over to Assignor. Notice of any sale or
other disposition of the Patents, Trademarks and Copyrights shall be given to
Assignor at least ten (10) days before the time of any intended public or
private sale or other disposition of the Patents, Trademarks and Copyrights is
to be made, which Assignor hereby agrees shall be reasonable notice of such sale
or other disposition. At any such sale or other disposition, Assignee may, to
the extent permissible under applicable Law, purchase the whole or any part of
the Patents, Trademarks and Copyrights sold, free from any right of redemption
on the part of Assignor, which right is hereby waived and released.

      8. If any Event of Default shall have occurred and be continuing, Assignor
hereby authorizes and empowers Assignee to make, constitute and appoint any
officer or agent of Assignee, as Assignee may select in its exclusive
discretion, as Assignor's true and lawful attorney-in-fact, with the power to
endorse Assignor's name on all applications, documents, papers and instruments
necessary for Assignee to use the Patents, Trademarks and Copyrights, or to
grant or issue, on commercially reasonable terms, any exclusive or nonexclusive
license under the Patents, Trademarks and Copyrights to any third person, or
necessary for Assignee to assign, pledge, convey or otherwise transfer title in
or dispose, on commercially reasonable terms, of the 


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Patents, Trademarks and Copyrights to any third Person. Assignor hereby ratifies
all that such attorney shall lawfully do or cause to be done by virtue hereof.
This power of attorney, being coupled with an interest, shall be irrevocable for
the life of this Assignment.

      9. At such time as Assignor shall have indefeasibly paid in full all of
the Secured Obligations and the Commitments shall have terminated, this
Assignment shall terminate and Assignee shall execute and deliver to Assignor
all deeds, assignments and other instruments as may be necessary or proper to
re-vest in Assignor full title to the Patents, Trademarks and Copyrights,
subject to any disposition thereof which may have been made by Assignee pursuant
hereto.

      10. Any and all fees, costs and expenses, of whatever kind or nature,
including reasonable attorney's fees and expenses incurred by Assignee in
connection with the preparation of this Assignment and all other documents
relating hereto and the consummation of this transaction, the filing or
recording of any documents (including all taxes in connection therewith) in
public offices, the payment or discharge of any taxes, counsel fees, maintenance
fees, encumbrances, the protection, maintenance or preservation of the Patents,
Trademarks and Copyrights, or the defense or prosecution of any actions or
proceedings arising out of or related to the Patents, Trademarks and Copyrights,
shall be borne and paid by Assignor within fifteen (15) days of demand by
Assignee, and if not paid within such time, shall be added to the principal
amount of the Secured Obligations and shall bear interest at the highest rate
prescribed in the Credit Agreement.

      11. Assignor shall have the duty, through counsel reasonably acceptable to
Assignee, to prosecute diligently any patent applications of the Patents,
Trademarks and Copyrights pending as of the date of this Assignment or
thereafter until the Secured Obligations shall have been indefeasibly paid in
full and the Commitments shall have terminated, to make application on
unpatented but patentable inventions (whenever it is commercially reasonable in
the reasonable judgment of Assignor to do so) and to preserve and maintain all
rights in patent applications and patents of the Patents, including without
limitation the payment of all maintenance fees. Any expenses incurred in
connection with such an application shall be borne by Assignor. Assignor shall
not abandon any Patent, Trademark or Copyright without the consent of Assignee,
which shall not be unreasonably withheld.

      120. Assignor shall have the right, with the consent of Assignee, which
shall not be unreasonably withheld, to bring suit, action or other proceeding in
its own name, and to join Assignee, if necessary, as a party to such suit so
long as Assignee is satisfied that such joinder will not subject it to any risk
of liability, to enforce the Patents, Trademarks and Copyrights and any licenses
thereunder. Assignor shall promptly, upon demand, reimburse and indemnify
Assignee for all damages, costs and expenses, including reasonable legal fees,
incurred by Assignee as a result of such suit or joinder by Assignor.


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      13. No course of dealing between Assignor and Assignee, nor any failure to
exercise nor any delay in exercising, on the part of Assignee, any right, power
or privilege hereunder or under the Credit Agreement or other Loan Documents
shall operate as a waiver of such right, power or privilege, nor shall any
single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.

      14. All of the Banks' rights and remedies with respect to the Patents,
Trademarks and Copyrights, whether established hereby or by the Credit Agreement
or by any other agreements or by Law, shall be cumulative and may be exercised
singularly or concurrently.

      15. The provisions of this Assignment are severable, and if any clause or
provision shall be held invalid and unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such clause or provision in any other jurisdiction, or any clause
or provision of this Assignment in any jurisdiction.

      16. This Assignment is subject to modification only by a writing signed by
the parties, except as provided in Paragraph 5.

      17. The benefits and burdens of this Assignment shall inure to the benefit
of and be binding upon the respective successors and permitted assigns of the
parties.

      18. This Assignment shall be governed by and construed in accordance with
the internal Laws of the State of New Jersey without regard to its conflicts of
law principles.

      IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be
executed by their respective officers or agents thereunto duly authorized, as of
the date first

                                        PNC BANK, NATIONAL ASSOCIATION


                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________

ATTEST:                                 PARTY CITY CORPORATION


By:_____________________________        By:_____________________________________
Name:___________________________        Name:___________________________________
Title:__________________________        Title:__________________________________


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                                   SCHEDULE A
                                       TO
              PATENT, TRADEMARK AND COPYRIGHT COLLATERAL ASSIGNMENT


                     LIST OF REGISTERED PATENTS, TRADEMARKS,
                           TRADE NAMES AND COPYRIGHTS