Assign copyright and licence copyright materials 1
Inside this reading: 1
Assignment and licensing of copyright material 3
Assignment of copyright 3
Licensing of copyright 3
Implications of assignment and licensing copyright 4
The legal basics of copyright contracts 5
Negotiating contracts 6
Pre-conditions to contracts 6
Negotiated conditions 6
The importance of contract advice 7
Licensing copyright materials 8
Terms of licensing 8
Assignment and licensing of copyright material
Copyright material is intellectual property and like any other property it can be bought and sold. The rights in copyright material can be assigned or licensed and these rights can be dealt with separately or in any combination.
Assignment of copyright
To assign copyright means to transfer the ownership of some or all of the rights in a copyright work to another party. To be legally binding, the assignment must be in writing and signed by or on behalf of the copyright owner.
Copyrights can be divided in many ways that an assignment of copyright needs to address, such as by time, territory or type of use.
Where many people are involved in the creation of the original material, assigning copyright can be very complex. All of the creators would need to have signed the agreement for it to be effective.
Licensing of copyright
To license copyrights to others means granting permission to others to use the copyright material in ways that are protected by copyright. A licence can be exclusive or non-exclusive.
When a licence is exclusive no one else is allowed to use the copyright material in ways covered by the licence, even the copyright owner, for the term of the licence. The licensee has similar rights to the copyright owner and can take action against an infringement of their rights. To be legally binding, an exclusive licence must be in writing and signed by or on behalf of the copyright owner.
A non-exclusive licence can be granted to any number of people to use the work in a certain way with no loss of rights by the copyright owner. A non-exclusive licence does not need to be in writing, however it can be better to have such a license in writing to avoid any confusion over what is and what isn’t allowed or covered by the licence.
Implications of assignment and licensing copyright
In assigning some or all of their rights, copyright owners transfer the ownership of these rights to another party and so the original copyright owner now has no ownership or control over the rights that were assigned. The assignment may be for a certain time or may last for the life of the copyright.
When licensing rights the copyright owner authorises others to use the copyright material in certain ways under agreed conditions. An exclusive licence is similar to an assignment in that the copyright owner transfers control to the other party.
It is essential that all parties to a copyright agreement are fully aware of the implications of signing a contract for copyright and have a clear understanding of what is being traded for what.
Factors that need to be fully defined, discussed and agreed upon before signing any assignment or licence, include the ways in which copyright material can be used or exploited and creative control of the product. Similarly, conditions such as the territory to which copyright apples, time frame and fees need to be agreed beforehand.
A band signing a record deal, for instance, would need to ask:
what they are receiving in return
when the contract expires
if rights revert when the contract expires
if they receive royalties or an outright fee
whether the record company can remix or re-release their music without their consent.
The legal basics of copyright contracts
Copyright is not always outlined or asserted by a formal written contract. The creator of an artistic work may verbally agree to the use of their work by others. While it is best to have all copyright agreements in writing, non-exclusive licences aren’t required to be written down—a verbal agreement may be all that is needed. Organisations, understandably, will generally need a written agreement for any copyright contract entered into.
Assignments and exclusive licences of copyright on the other hand must be made in writing (usually in the form of a contract) and signed by both parties or by an authorised representative of each party.
Standard contracts are widely used, particularly by organisations that use and/or create copyright material and where acquiring rights for the use of other people’s work, either by assignment or licence, is part of their core business.
For a contract to be legally binding (meaning also that is it valid and legitimate), three things need to happen:
an offer must be made and full details of the offer must be written into the contract
the offer must be accepted and signed by all relevant parties
the offer must include some benefit or valuable consideration—which may be financial but not always.
Who needs to be involved in assigning copyright?
A contract, such as an assignment of copyright must involve at least two parties: one represents the side assigning the rights, called the ‘grantor’, and the other party represents the side acquiring the rights, called the ‘grantee’.
Individuals signing a contract must have the legal authority to sign on behalf of the party they represent. In the case of a copyright work with more than one creator, unless one person has authority to sign on the group’s behalf, the contract must be signed by all the creators of the work.
Pre-conditions to contracts
Assignments of copyright and exclusive licences will always be subject to conditions required to satisfy both parties.
Often the party requesting an assignment of copyright will have a set of pre-conditions relating to how they will use the material. For instance, a publisher may want to use a photograph on the cover of a textbook for which the size of the print run is set and the placement and size of the image are pre-determined by the cover design.
A photographer or owner of the copyrighted image on the other hand may have certain pre-conditions for how the material is to be used before they can give permission, such as the degree to which the content can be altered or obscured by cropping an image, and/or the phrasing or caption required in an acknowledgement or attribution of the source of the image.
Other terms and conditions may be negotiable and more complex.
A well-known author may propose that the same publisher publish a collection of short stories by several writers on a theme. She might propose to edit the work, commission the stories and write an introduction and the publisher has accepted the idea.
The copyright material created by the contributors is their livelihood, so they would be unlikely, even ill-advised, to assign copyright, that way giving up their rights to their short story. It may also be the case that they already have a story on that theme, published elsewhere. The publisher has no real need of acquiring lasting copyright for the individual stories, other than the right of first publication in that collection, and the related right for the story not to be published some period after the collection is published. The agreement with the authors would be a license to publish the story in that collection. It would stipulate that copyright of individual stories remains with the authors (meaning they can later publish the story elsewhere, after that certain time has lapsed), while the publisher would retain copyright for that collection of stories. A one-off fee would be paid to the writers for that specific use.
The editor of the collection might then be paid in an advance against royalties from sales of the book (in much the same way, for instance that the author of a novel would be paid), based on their having assigned copyright for the collection to the publisher. An added element to the contract between the publisher and editor might be that the editor deducts the one-off fee and any other expenses paid to the short story writers from the advance paid to them by the publisher.
If the publisher, in partnership with a film production company, intends to adapt the same collection for a TV series at a later stage, they would then need to acquire rights beyond those first publication rights and book collection right and would need to negotiate a copyright contract with each of the authors to acquire film rights to the individual works.
The importance of contract advice
It should be assumed that anyone in the corporate world wishing to acquire copyrights does so with the intention of exploiting the material to its fullest extent for maximum financial advantage. The life and possible uses of the copyright material needs to be fully considered.
The copyright owner or photographer giving permission for the use of a photograph in the first example above, and the short story writers selling work in the second example, need to know if the fee paid is for that edition and for subsequent editions of the books, or if a separate fee might be payable for any later editions (which would usually be the case for the use of the image, but not necessarily so for the stories in the collection if it were to be reprinted).
Great care needs to be taken to ensure the limits of the agreement are well defined. This way both parties know where they stand (and where they can’t stand or even tread).
The photographer and writers in the above examples may have agents that represent their interests and give advice in copyright matters. They may also be members of an organisation that represents their interests, such as those listed in Table 3 in Learning Pack 1.
Any agreement that assigns or licences copyright material needs to address the specific terms and conditions under which the material can be used.
Specific questions to consider and document can concern:
Rights granted—what types of rights are being granted, for example book publishing or film rights (or perhaps all rights)?
Territory—in what parts of the world can the material be exploited?
Duration—how long will the agreement last; for the term of copyright or for a limited period?
Payment—in what form will payment be made; an up-front fee or a royalty based on a percentage of income derived from exploitation of the material?
Adaptations—will alterations to the material be allowed or will they require the consent of the creator?
Sub-licensing—will any form of sub-licensing be allowed under the agreement.
Other issues to consider in an agreement may be an obligation to publish, reproduce or market the material, and whether the rights will revert after a time in the case of a default (by non-publication, non-reproduction or not marketing the work).
If payment is to be made as royalties there should be an agreed schedule of payments and an obligation to provide accounts at regular intervals.
There should also be termination clause that states when and in what circumstances an agreement will cease to be in force with the rights reverting to the copyright owner.
Documenting and sign-off
Once all of the relevant issues of a copyright assignment or licence have been discussed and agreed upon, they should be documented in the form of a contract. As contracts are legally binding it is advisable to have an experienced copyright practitioner involved in the drafting of the contract.
Both parties can then peruse the contract to ensure it reflects the agreed arrangements. It may be wise to retain any notes of the discussions that took place to assist your recollection of the agreement.
Finally, when both parties are satisfied with the wording and intent, the agreement can be signed and dated.
The responsibility for enforcing rights after agreements or licensing arrangements are made
Usually the party exploiting the rights in copyright material (and presumably but not always making money from it), has the responsibility to enforce and administer those rights. It is also their best interests to ensure that no one is infringing their copyright and stealing from their income stream.
The party acquiring the rights may also be obliged to administer accurate records for accounting purposes.
In this reading the basic differences between assignment and licensing of copyright materials were outlined, with the implications discussed of both ways of trading copyright for the owners or users of copyright material.
An outline of the importance and legal basics of copyright contracts, and the use of standard contracts, led to discussion of some of the factors to consider in negotiating contracts. Examples were given to illustrate the limits of contracts and the sorts of things you may need to be aware of to ensure the rights of creators are best protected and your own interest are best served (including recourse to legal advice in having contracts drafted).
The standard terms of licensing agreements completed the overview of this subject. The importance was emphasised of both parties to a contract being fully aware of all rights, conditions and responsibilities, including those after copyright is assigned or licensed.