Licensing & Assignment Agreements

As a practitioner, it is important to know how a copyright licensing agreement works. Remember that only attorneys can draft legal documents, and in all likelihood any attorney you work for who has a need for a copyright licensing agreement will already have a model which she uses. That being said, you should understand the important components of the agreement.

Keep in mind that the §106 exclusive rights are completely separable. This means that one can grant a license to use protected material for any purpose, or one can substantially limit the licensee's uses. One may give a licensee a non-exclusive license (which will permit you to license others to use the same material) or an exclusive license (only the licensee may use the material). In addition, one can contract for an option to purchase a license at a future date.

These are just some of the variations that must be dealt with in a copyright license agreement. And in addition to licensing one’s work, an outright sale of the property is just another option to be negotiated.

Remember as well that transfers of ownership may be terminated in some cases if certain requirements are met.  See 17 U.S.C. §§ 203, 304.  17 U.S.C. § 203 allows authors to retract grants after 35 years and § 304 allows termination of transfers for older works, upon renewal terms.

To give you an idea of how a real copyright assignment deal goes together, below is a list of the documents involved in a deal to purchase the exclusive rights to use an existing book for a movie:

1. Option Agreement for Purchase of Literary Material
2. Purchase Agreement for Purchase of Literary Materials with Standard Terms and Conditions
3. Consultant Employment Agreement
4. Short Form Option
5. Short Form Assignment
6. Publisher’s Release

The terms in each document would be separately negotiated, and the documents themselves can get rather complex. For example, the Option Agreement includes provisions for theatrical and TV sequels and remakes as well as spin-offs. The Purchase Agreement requires the author of the underlying work to take any steps necessary to prevent the work from falling into the public domain in foreign countries. The Consultant Employment Agreement guarantees the author’s availability during production of the film, and the Publisher’s Release protects the film company against claims by the publisher of the book.

The length of these documents and the need to maintain client confidentiality prevents us from using them as examples. There are, however, sample documents attached to this chapter which will be useful to you in understanding the more simple, straightforward transactions which often take place.

However simple or complex the license or assignment, your client’s interests should always be protected. For a licensor, that means at the very least carefully spelling out which rights are granted and which are not, and the purpose for which the licensee may use the protected work. For a licensee, that means making sure the licensor has the authority to grant the rights and that there are no competing claims (e.g., if the licensor has already granted exclusive rights to another licensee, your client will end up with a worthless document).