Copyright License Agreement: What You Need to Know

If you want to grant permission to another company or person to use your copyrighted material, such as a book, song, or article, consider signing a copyright license agreement with them. A copyright license agreement is a legally enforceable contract that gives a licensee—the company or person interested in using your work—legal authorization to use your work for designated purposes, typically in exchange for payment. 

Read on to learn more about copyright license agreements and how to create one.

What is a copyright license agreement?

Also known as copyright release agreements, copyright assignment agreements, and copyright transfer agreements, copyright agreements are extremely important to regulate how others use your work. Their main purposes are to:

  • List out the details of the agreement between you and the licensee. This includes how you will be compensated, the terms of usage, and the length of the agreement.
  • Prevent and mitigate disputes related to royalties, sales, and quality.

There are two main types of copyright licenses: nonexclusive and exclusive. When a nonexclusive license is given, the licensee is the only entity with the right to use your work for the duration of the licensing agreement. In contrast, a nonexclusive license allows you to authorize other companies and people to use the work at the same time. 

You’re likely to encounter copyright license agreements if you work in innovative industries like entertainment and tech. Here are some examples of what copyright license agreements can regulate:

  • Musical compositions (lyrics and musical score)
  • Sound recordings
  • Software
  • Books
  • Sports team logos
  • Inventions (i.e., patents) 

There are some types of information you can’t license with a copyright license agreement. These include:

  • Materials in the public domain
  • Factual information
  • Names, slogans, themes, ideas, or plots

Copyright assignment agreements typically require licensees to pay two types of fees: a copyright fee and royalty fees. Although they sound similar, royalty fees are distinct from copyright fees. The licensee pays a copyright fee to obtain a copyright license from you. They will then pay you royalty fees based on how much they earn using the copyrighted work. For example, a filmmaker will pay you a copyright fee to obtain a copyright license from you. This will allow them to use one of your songs in their films. The filmmaker will start paying you royalty fees once they make money above a certain threshold. 

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How to create a copyright license agreement

To create a copyright license agreement, you need to include the following parts: 

1. Basic information

Like other types of contracts, you need to cover the following in your copyright license agreement:

  • The names of the parties and the description and name of the licensed work: Write out the full legal names of the parties to the agreement. The names must be the way they appear on the parties’ official ID cards (i.e., driver’s license and Articles of Incorporation for companies).
  • The name(s) and description(s) of the work(s) being licensed: List out the work or the works you’re licensing to the licensee. Include a bulleted list of works by name, medium, and size. Include a description of each of these works. If the list gets too long, consider adding an Exhibit to your copyright license agreement.
  • A statement of ownership showing who holds the copyright of the work: State who owns the title, trademarks, copyright, and all other related rights to the work. For example, you can say: “Licensor owns the trademarks, copyright, and all other related rights in the work entitled ‘Ocean.'”
  • Effective date(s) of the license agreement: Specify when the parties will be subject to the terms of the agreement and when the agreement will end (i.e., 50 years from the date of execution unless terminated).

2. Copyright-license-specific information

You also need to include the following information about the work being licensed and the terms of the license itself:

  • Rights granted: List out the rights you’re granting the licensee. Talk about what the licensee can do with the work. Can they publicly perform the work and authorize others to perform the work? Can they use excerpts of the work in marketing or publicizing the work? You should also touch upon the following points:
    • The geographic area(s) where the copyright license applies: Where can the licensee use the licensed work? This can be a state, a country, a couple of countries, a whole region, or worldwide.
    • Exclusive or non-exclusive: State whether this license is exclusive or non-exclusive.
  • Licensor’s obligations and rights: List out your rights as a licensor. Most licensors include the right to review any work done by the licensor based on the licensed work. You may also want to include the right to request a review at any time or with notice.
  • Licensee’s obligations and rights: List out what the licensee will be responsible for. For instance, “Licensee shall be solely responsible for providing all funding for the marketing of the work.”
  • Payments: List out how and when the licensee will pay you for the rights you’ve given them. 
  • Non-disclosure clause: This section will prohibit either side from disclosing trade secrets and other confidential information. Basically, it’s a mini non-disclosure agreement (NDA).
  • Non-compete clause: This section will restrict you from selling a work that could compete with the work you’re licensing.
  • Termination clause: Establish when and how the agreement can be terminated.

Managing copyright license agreements

As you can see, drafting copyright license agreements can be trying, particularly if you’ve never done it before. Managing them can be even more challenging, especially if your organization is still stores contracts in hard-to-reach USBs, hard drives, and physical cabinets. 

This is why you should consider getting enterprise-grade contract lifecycle management (CLM) software like Ironclad. Ironclad comes with state-of-the-art functionalities that transform contracts from blockers to enablers. Our Data Repository, for instance, allows you to manage, draft, and store contracts. Codeless, intuitive, and zero-training-required, Data Repository enables you to bring in contracts from anywhere in your company. With all your copyright license agreements in one place, anyone—whether they’re from Human Resources, Legal, or Procurement—can access your copyright license agreements. This will break down your company’s contract silos and streamline the process of answering questions about upcoming contractual obligations.

Ironclad also comes with the equally user-friendly Workflow Designer, which lets you create and approve automated workflows for copyright license agreements. A self-serve tool that works out of the box, our Workflow Designer has a simple drag-and-drop user interface that anyone can use. Say goodbye to spending hours drafting clauses for your copyright license agreements—Workflow Designer lets you create and launch contracts and approval processes in minutes. All you have to do is:

  1. Upload a template
  2. Tag fields that need filling in
  3. Add signers and approvers

Our templates are up-to-date and contain guardrails to ensure 100% automatic contract compliance. If you don’t like our template language or clauses, you can easily modify the template language. You can also fine-tune approval routing workflows and deliver updates instantly.

Wrapping up

A copyright license agreement is an agreement that gives another company or person the authorization to use your copyrighted work. It establishes the terms and conditions of this authorization, including rights granted to the licensee, the licensee’s obligations and rights, and how the licensee will pay you for allowing them to use your work.

Copyright license agreements can be difficult to write and manage, particularly if you’re dealing with thousands of them at once. As such, you should consider getting Ironclad Editor. Ironclad is an enterprise-grade contract management tool that will make drafting and managing copyright license agreements easier than ever. Our Data Repository allows you to store contracts from all over to gain a better understanding of upcoming deadlines and contractual obligations. What’s more, our Workflow Designer’s templates require no coding and have all of the legal language you need to start drafting copyright license agreements. All you have to do is upload a template, tag fields, and add approvers and signers.

If you’re interested in using Ironclad to manage and draft copyright license agreements, try our sandbox demo today.

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