The terms assign and license can prove confusing for many people. However, whether you are a copyright owner wishing to exploit your intellectual property through a third party, or the party wishing to obtain the right to exploit the copyright, it is very important to understand the nature of the rights you are acquiring or disposing of and what the acquisition or disposal enables you to do.
This information sheet is aimed at providing an overview of the different terms in relation to copyright works. However, similar considerations apply in relation to inventions and other embodiments of intellectual property.
Copyright, like other intellectual property, is a property right and can be dealt with like any other property. In other words, it can be bought, sold, mortgaged, put into trust, etc. If you wish to transfer, or dispose of, all the copyright in your work, you can do so. Any transfer must be in writing for it to be effective. You would also usually specify that the transfer is made in return for a sum of money, or money’s worth. This transfer is known as an assignment.
If you have assigned all your rights in the copyright work to someone else you cannot then use that work (e.g. copy it, read it or perform it in public, etc) without that person’s consent. If you want to retain the right to do anything specific (e.g. perform the work for once a year at a specific theatre) you should specify this in the assignment. This would then be what is known as a partial assignment.
As the copyright owner you are entitled to restrict the use of your work. The restricted acts in relation to copyright works are set out in the Copyright Designs and Patents Act 1988. They include copying, distributing copies of the work, performing the work in public, adapting the work, etc. In a partial assignment you can divide the rights up, for different periods of time in different territories to different assignees. For example one publisher could obtain the rights to publish the work electronically, another could obtain the rights to publish the book in hard book form in a particular territory and another could obtain the rights to translate the book into a particular language.
Because you do not assign all of the rights to one person, it is only a partial assignment.
Dividing the various rights up is also common in licensing.
A licence is the grant of a specific right to an individual or organisation (the licensee) in relation to the copyright work. It permits the licensee to do certain things with the copyright work. While it is possible for an informal licence to be granted (i.e. for it not to be in writing), this can lead to dispute as to exactly what rights have been granted. It is therefore advisable for any licence to be recorded in writing.
A licence can be sole, exclusive or non-exclusive.
A sole licence is where the licensee is entitled to exploit the right in the copyright work in the way defined, to the exclusion of everyone else except the copyright owner.
An exclusive licence is where the licensee is entitled to exploit the right in the copyright work in the way defined, to the exclusion of everyone else including the copyright owner. This can mean that an exclusive licence has certain similarities to an assignment of rights. However, a licensee of a copyright work (unlike an assignee) will usually have to pay the copyright holder a royalty and may also have certain constraints placed on it as to how it may exercise the rights.
A non-exclusive licence is where the licensee is entitled to exploit the defined right in the copyright work along with other licensees of the copyright work and the copyright owner itself.
An exclusive licence may mean that the copyright owner can demand higher royalties and minimum royalties. However, a copyright owner may prefer to grant non-exclusive licences because it may mean that he can gain greater exposure in the market if there are more licensees exploiting the work.
A well-drafted agreement, whether assignment or licence, is extremely important to ensure that both parties understand what rights they have and to minimise the risk of dispute further down the line.
This information sheet has been prepared by Clarkson Wright & Jakes to highlight some key issues relating to assignments and licences. It is intended to be for general guidance only and is not a substitute for specific advice. It is based upon our understanding of the legal position as at November 2007 and may be affected by subsequent changes in the law.
Please email Nicky Androsov at firstname.lastname@example.org or call her on 01689 887859 if you require any specific advice on the issues covered.