A copyright gives its owner an exclusive right to produce, reproduce, distribute and commercialize the copyrighted work in any material form. A copyright subsists in both published as well as unpublished words. No registration is required although registration benefits you in case of litigation for it acts as a prima facie proof of its validity. The financial success from exploitation of any intellectual property and especially copyright depends on the method of commercialization adapted. One such way is copyright licensing under which the copyright holder (licensor) allows you to use his/ her copyrighted work within the provisions of a contract. In order to utilize the full commercial potential of your copyright, you may license it to various users and gain profit from it.

Another mode of commercializing copyright works is assignment where the entire gamut of rights is transferred in one time from the owner to the assignee although partial assignment is also practiced in some cases. In situations where you wish to earn money but desire of limiting the rights, you may opt for licensing as the medium. On the contrary assignment is preferred in case of more lucrative commercial interests. Assignments must be in writing to be valid whereas licenses are not necessarily always in writing. Assignments of future works is also something unique which cannot be done through licenses. In an assignment, the assignee takes over the ownership and is free to do anything as he wishes contrastingly in licenses, a licensee and licensor are bound by the terms and conditions of the agreement.

There are several clauses that are typically kept in a licensing agreement such as the term of the agreement, scope of rights licensed, territorial extent, conditions for renewal and the payment or royalty agreed upon as the consideration.

The ‘Grant of License’ clause governs the scope of the license which are exclusive, non-exclusive and royalty-free basis. An exclusive license restricts the owner from licensing the work to anyone else but in non-exclusive basis, the owner may license the copyright to anyone else but the licensee cannot sub-license, distribute or sell it further. In some cases where the copyright holder licenses marketing agents to market the work, it is done in a royalty-free basis.

Additionally, in the skeleton of a license agreement there are other vital clauses necessary such as the identification of parties, recitals of the ownership of the work, and other obligations that each of the parties have to abide by depending on the type and complexity of the agreement. Licensing your work also benefits you from avoiding litigation expenses as most of the agreements have infringement indemnification clauses wherein the licensee is obligated to indemnify the licensor from the losses suffered. Disclaimer of liability is also a clause you shall never forget to add to the agreement as it demarcates the liability of the licensee and licensor in case of any pursuing legal dispute that is directly connected to the copyrighted work.

Lately, most of the licensors have stated emphasizing on quality maintenance of their works as it is a reflection of their creativity and their interest lies in protecting it. Such process has been possible by keeping a ‘Quality Control clause’ in the agreement which binds the licensee to maintain a minimum level of standards while using the licensed work.

Furthermore, with so much complexities involved and many legal viewpoints essential for an agreement, it is an uphill task for a layman to prepare a license agreement. Therefore, if you are wise enough, you would hire an expert in this field who is adept in copyrights and drafting agreements and can offer you hassle-free procedures to put your rights into use and keep earning in the most beneficial way that suits you.

For more information about copyright licensing agreements, feel free to contact us at info@ilexlaw.com. You can know more about our IP Law Attorneys in Intellectual property law page.