*Please do play the James Bond theme song in the background while reading for optimal dramatic effect.*
What does a license agreement do?
Generally, the owner of copyright is the only person who is allowed to use a copyrighted work in any way. A license agreement creates an exception to this rule! It’s like a permission slip from the owner of a copyrighted work to use their work as set out in the Agreement.
So if Margaret paints a painting, and Elizabeth wants to use it and make fabric with the painting printed on it, then Margaret can give her a license agreement to give her permission to do so. (Yes, it is true I am halfway through season 2 of the Crown).
Does this mean you own the copyright now?
Unfortunately, no. It just means that you have permission to use it only in the way that the owner allows you to. That’s kind of the beauty of being a copyright owner. If you’d like to own the copyright, you will be looking for an assignment of the work rather than a license for it. And that, dear friends is a different kettle of fish…
… that if you’d like more info on, you should book in a call with us!
What should a license agreement include?
Well basically, whatever you like really. Nonetheless there are a few things though, that you really should include so that the Agreement can maintain its robustness and avoid having missed anything.
Terms
This looks at how long the Agreement will last, and therefore how long the Licensee (in this case Elizabeth) is allowed to use the work for. This could either have the term ended on a specific date, after a specific period of time or after a specific event (or thing) occurs. While it’s possible to have a never ending license agreement, these can sometimes be tricky if the licensor (in this case Margaret) wants to make Lizzie stop.
What is being licensed
In a license agreement it’s super important that everyone understands what is actually being licensed. Let’s go back to Lizzie and Margaret for an example of why: Let’s say Margaret actually painted a whole series, it would be important to specify whether Elizabeth is getting the whole series or just one painting for her fabric line. Specificity is the key here.
Purpose
This looks at what the Licensee (Elizabeth) is allowed to do with the license. E.g Elizabeth may be allowed to print the painting onto fabric but isn’t allowed to do anything else with it. It’s really as simple as that, but is one of the most important parts of the agreement. It can actually become the most complicated when you consider whether people are allowed to do certain actions for personal purposes or commercial purposes, and then how those commercial purposes may be channelled. Once again, specificity is key! More detail is better than less here if it’s getting complicated. Phew! You still with me?
Territory
Territory links to the purpose, by setting where that purpose can be undertaken, including where the things may be sold if it’s for a commercial purpose. This might be a town, a state, a country or any combination of a few of these things.
Fee
Oooooo yeah, we’re into the nitty gritty now. Once again with the specificity, but it’s really important here as well. Some license agreements have a set fee that’s a one-off payment, others include a price for ‘thing’ made with the licence, or maybe it might even be a combination or mix of both. Whatever the arrangement, is it’s important that it’s clearly stated in the agreement. Yup. Exactly. Specificity.
Exclusive vs Non-Exclusive
Basically, this part will say whether the work can be licensed to other people as well. It’s possible that there might be additional conditions on this (e.g maybe Margaret is allowed to license the painting to other people to be printed on greeting cards but not allowed to license to anyone else for fabric printing), or it could be outright (for example, Margaret isn’t allowed to give a license to anyone else AT ALL except for Elizabeth).
There you have it. The ins and outs of copyright and license agreements. How clever do you feel now!? Any questions, you know where to find me. So find me.
Want to stay legally legit but don't know where to start? Download our Business Startup Checklist, it can help you start your business like a pro!
***Disclaimer. Please read!!***
This article is for general information purposes only and should be used solely as general guidance. It does not and is not intended to represent legal advice or other professional advice.
All rights reserved. © Foundd Legal Pty Ltd
