If you’ve taken the necessary steps to register your copyrighted works, you inevitably will have an opportunity to royalties off of them. To take advantage of the opportunity, you will need to be familiar with copyright license agreements.
Copyright License Agreement
A copyright license agreement sets for the terms under which a third party can use your content. In legal language, you will the “licensor” with the other party being the “licensee.” The purpose of the agreement is to set forth the terms under which you, the licensor, will grant the third party, licensee, the right to use, publish or reuse your copyrighted work in exchange for a royalty. Let’s take a closer look at key components of the licensing agreement.
Specific Rights Granted
This may sound obvious, but the agreement needs to detail exactly what copyrighted material can be used. If you have copyrighted articles, are you granting a right to use all of the articles or only certain ones? It is highly recommended that the agreement contain a detailed description of the exact materials being covered.
Once you agree upon the exact materials, you need to determine any restrictions on how the material can be used. Can the material be used on the Internet or will it be restricted to a certain niche’ such as manuals or collections of materials?
An extremely important issue is whether the agreement grants exclusive or non-exclusive rights. In English, this simply defines whether the licensor can grant similar rights to other parties. The grant of exclusive licenses should require a much larger royalty rate since you are essentially betting the third party will be successful.
Licensing Royalties
In exchange for your copyrighted work, the third party is going to make royalty payments to you. The particular amount of the royalty is dependent upon the nature of your work. Issues to consider include:
1) Will you be paid a flat amount or percentage of sales? 2) If a percentage, will it be figured from gross revenues or something less? 3) How often will you be paid? 4) What rights will you have to audit the books of the third party to determine you are getting the full royalty?
In some situations, you may decide to forgo a royalty payment. This usually occurs when the third party will use the materials in manner that produces massive publicity for you. For example, many professionals seek to right columns for publications as a marketing tool. Often, they will not charge the publication for the material because the resulting publicity carries enough of a benefit.
In Closing
If you are considering licensing copyrighted content, keep the above in mind. Since such agreements are difficult to break, hiring an attorney is worth the expense.
About the author:
Richard Chapo is with SanDiegoBusinessLawFirm.com - providing San Diego businesses with legal services. This article is for general education purposes. Nothing in this article creates an attorney-client relationship.
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