Copyright license

The exclusive rights of a copyright owner may be licensed on an exclusive basis (i.e., copyright ownership in one or more rights is transferred by the copyright owner) or on a nonexclusive basis (i.e., the copyright owner retains ownership of the copyright and may grant similar licenses to others). A nonexclusive licensee is not a copyright owner and thus does not have standing to sue for any infringement of the copyright in the work by others. Unlike exclusive licenses, nonexclusive licenses need not be in writing.

Limitations on the exclusive rights, such as the first sale doctrine, fair use or library exemptions, may be overridden by contract. However, such contract terms can be enforced only under state law. For instance, the fair use of a work (outside the scope of the license) by a licensee whose license precludes any use other than that specified by the license would not be a copyright infringement, but would be a breach of the license agreement. Licenses and other contracts cannot transform noninfringing uses (such as fair uses) into infringements; they can, however, make such uses violations of the terms and conditions of the agreements:


 * A library that has acquired ownership of a copy is entitled [under the Copyright Act] to lend it under any conditions it chooses to impose. This does not mean that conditions on future disposition of copies or phonorecords, imposed by a contract between their buyer and seller, would be unenforceable between the parties as a breach of contract, but it does mean that they could not be enforced by an action for infringement of copyright.

Licensing issues are, and will continue to be, significant in the context of the Internet. The Internet has and will continue to provide the opportunity for new uses for copyrighted works. If rights with respect to these new uses are not expressly granted or retained in license agreements, conflicts will arise between copyright owners and licensees. For instance, public display on a website may not have been contemplated in licenses granting a public display right that were executed before the advent or proliferation of such systems.

Some argue that new uses which were not contemplated at the time of licensing but which fall within rights granted, such as the public display example above, should automatically fall within the scope of the license. Others contend that new uses which are not contemplated and, therefore, not specifically mentioned in a grant of rights should be considered retained by the licensor &mdash; even in the case of a complete assignment of rights.

Failure to contemplate possible future developments, of course, is not a new problem, and is one based primarily in contract rather than copyright law. Whenever new technologies have produced a new use for works, courts have been called upon to decide whether the new use is covered by old licenses. That is the proper jurisdiction for such determinations. License agreements must be interpreted individually and under the law of the governing state.

A variety of licensing methods will be possible on the Internet. For instance, rights in copyrighted works offered on the Internet may be licensed offline or online. They may be licensed directly (through individual transactions between the rightsholder and the licensee) or through other licensing arrangements, such as voluntary collective licensing. Licensing of rights may be on a per-use, per-work or other basis.

The licensing of rights for the creation of multimedia works &mdash; whose creators may wish to include dozens of preexisting works (or portions thereof) &mdash; can be difficult. Because registration and copyright notices are not required for copyrighted works, identification of copyright owners alone can be complicated.

With limited exceptions, intellectual property law leaves the licensing of rights to the marketplace. In certain circumstances, particularly where transaction costs are believed to dwarf per-transaction royalties, Congress has found it necessary to provide for compulsory licenses.