Establishing copyright protections is important for creative professionals and businesses. Through either publication or formal registration, a party invested in original creative works can protect those works from use or distribution by other parties.
The more recognizable and popular an original work becomes, the greater the demand for use by outside parties. In some cases, those with an interest in certain intellectual property may outright violate the rights of a copyright holder. Other times, they may seek permission to use original works.
A licensing agreement allows a copyright holder the ability to permit certain forms of use by another party. What terms typically play an important role in a copyright licensing agreement?
Details about licensing fees
The first and perhaps most important details to include in a licensing agreement relates to the compensation provided to the copyright holder. Frequently, there may be a per-use fee assessed whenever one party uses the copyright-protected creations or holdings of another party. Other times, the agreement may involve the payment of royalty fees based on the sales or online views secured by the party licensing the original work. In some cases, the United States Copyright Office can play a role in the collection and transfer of licensing fees and royalties. Clarifying amounts due and how to assess, collect and report those amounts are crucial details in any licensing agreement.
The duration of the agreement
It is rare for a party with copyright protections to grant indefinite licensing rights to another party. Instead, a licensing agreement typically lasts for a set amount of time. After the expiration of the original agreement, it may be possible to negotiate an extension or a new contract that reflects the current value of the copyrighted work and the desires of the licensing party.
Permissible use of the licensed work
Signing a licensing agreement does not give one creative professional or business carte blanche access to and use of another party’s creations. Instead, a licensing agreement tends to outline very clear limitations on how one party uses the creative works produced or owned by another party. Oftentimes, there are limitations on use and distribution to prevent any damage to the original brand or product. Concerns about dilution or inappropriate use may require special terms in the licensing agreements.
Ideally, the details set forth in a licensing agreement are so clear and specific that there is little question about what rights each party has and what obligations they have to each other. Drafting a licensing agreement and enforcing it can be key to the protection of copyrighted original works. Copyright holders who establish appropriate licensing agreements can potentially monetize their holdings while simultaneously protecting their intellectual property interests overall.