Definition[edit | edit source]

[A] [copyright] license is an authorization by the copyright owner to enable another party to engage in behavior that would otherwise be the exclusive right of the copyright owner, but without transferring title in those rights. This permission can be granted for the copyright itself, for the physical media containing the copyrighted work, or for both the copyright and the physical media.[1]

Overview[edit | edit source]

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.[2] Unlike exclusive licenses, nonexclusive licenses need not be in writing.[3]

Impact of license terms on limitations on exclusive rights[edit | edit source]

Limitations on the exclusive rights, such as the first sale doctrine, fair use or library exemptions, may be overridden by contract.[4] 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.[5]

Using licensed works on the Internet[edit | edit source]

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 — 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.[6] 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 — whose creators may wish to include dozens of preexisting works (or portions thereof) — can be difficult. Because registration and copyright notices are not required for copyrighted works, identification of copyright owners alone can be complicated.

Compulsory licenses[edit | edit source]

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.[7]

References[edit | edit source]

  1. F.B.T. Productions v. Aftermath Records, 621 F.3d 958 (9th Cir. 2010) (full-text).
  2. See 17 U.S.C. § 501(b) ("legal or beneficial owner of an exclusive right under a copyright is entitled . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it"). In certain circumstances, television broadcast stations and others are treated as legal or beneficial owners and may bring actions for infringement by cable systems and satellite carriers. See id. § 501(c), (d), (e).
  3. However, like exclusive licenses, nonexclusive licenses may be terminated 35 years after the effective date of the license. See id. §§203(a), 304(c).
  4. For example, a user could decide to participate in a licensing program covering all copies made, for a nominal fee per copy, rather than to indulge in the record-keeping necessary to determine which copies are subject to a licensing fee and which are fair use. Copyright owners may not be allowed, however, to seek to increase the term of protection without implicating the doctrine of copyright misuse. Cf. Saturday Evening Post Co. v. Rumbleseat Press, Inc., 816 F.2d 1191, 1200, 2 U.S.P.Q.2d (BNA) 1499 (7th Cir. 1987)(full-text) (claims of misuse must be judged by antitrust standards); Lasercomb America, Inc. v. Reynolds, 911 F.2d 970, 979, 15 U.S.P.Q.2d (BNA) 1846 (4th Cir. 1990) (full-text) (contract purporting to license copyright for 99 years rendered copyright owner guilty of copyright misuse). The doctrine of copyright misuse might be implicated in other situations where the scope of protection is significantly expanded.
  5. H.R. Rep. No. 1476, 94th Cong., 2d Sess. 55 (1976), at 79, reprinted in 1976 U.S.C.C.A.N. 5693.
  6. See, e.g., Harper Bros. v. Klaw, 232 F. 609 (S.D.N.Y. 1916) (license to dramatize "Ben Hur" in a play did not include right to produce a movie, but licensor enjoined from producing movie because licensee's right to produce a play would be harmed by licensor's production of a movie); L.C. Page & Co. v. Fox Film Corp., 83 F.2d 196, 29 U.S.P.Q. (BNA) 386 (2d Cir. 1936) (full-text) (grant of exclusive "moving picture" rights embraced technical improvements in movies that might be developed during the term of the license; thus, license held to cover "talkies"); Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150 (2d Cir.) (full-text), cert. denied, 393 U.S. 826 (1968) (1930 license of film rights in a play, when television was a known technology but its full impact not yet realized, included television rights; as an experienced businessman, licensor had reason to know of new technology's potential and had burden of negotiating exception).
  7. See, e.g., 17 U.S.C. §111. The cable compulsory license was enacted to reduce the need for negotiations among thousands of program copyright owners and hundreds of cable systems for the right to retransmit the copyrighted programs that are included in the broadcast signals retransmitted by cable systems.
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