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What the licence agreement should contain

A licence agreement allows the author of the work to allow the licensee to deal with the work as if the licensee had the copyright itself. The artist or creator thus relinquishes control over his or her work.

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What is the purpose of the license agreement?

As mentioned in the introduction, a licence agreement allows you to grant an intellectual property right to another entity, or possibly to several different entities, independently of each other. Some IP rights cannot even be “transferred” in any other way. However, there is no actual transfer of rights for such rights, but only the enabling of another person to exercise the right. Typically, this type of licensing agreement is associated with copyright, which is one of the rights mentioned above that is intrinsically linked to the author and therefore cannot be transferred. However, the author of a book may grant a licence to have his book made into, for example, a film or a theatrical performance.

Essentials of a licence agreement

The basic elements of a contract include, of course, the identification of the parties. On the one hand, the owner of the intellectual property right and, on the other, the licensee who is granted the right to use the work. It is also essential to specify the duration of the contract (for the maximum duration of the copyright), and to indicate whether the work is musical, dramatic, photographic, cinematographic, artistic or other.

The licence agreement should include the scope of the rights and obligations of the acquirer, in particular whether the acquirer is entitled to use the work in full or only to reproduce, distribute, rent, lend, exhibit or communicate the work to the public, for example by radio or television. The scope of the licence may be limited or unlimited. It can be expressed as a temporal, local or quantitative scope. It is often debated whether, for example, a film or book can be distributed worldwide or only for a specific territory. The scope must at least be stated in general terms. In addition, it should be stated whether the acquirer can modify the work, combine it with another work or include it in a collection such as a collection of poems or a songbook.

The legal regulation of the contract can be found in the Civil Code. There are also special provisions relating to the licensing of rights protected by copyright law, rights related to copyright and the publisher’s licence.

The licence agreement does not necessarily have to be in writing, but it is more than recommended. This will avoid any doubt as to the specific scope of the agreed rights, remuneration or anything else. In two cases, the law requires the contract to be in writing, either if it is an exclusive licence or if registration in a public register is required for it to be effective against third parties, which is the case with industrial rights licensing.

The licence may also be negotiated as an exclusive licence. In effect, this means that the author may not enter into another licence agreement with any other person, nor may he himself exercise his proprietary copyright vested in the assignee. In this case, the contract must be in writing. The rule is, however, a non-exclusive licence. If an exclusive licence is to arise, this must be expressly stated in the contract. The only exception is the publishing licence, where the law states that unless the parties agree otherwise, the publishing licence is exclusive.

It is also not excluded to negotiate a future contract with the author , which will relate to the licence of a work yet to be created. Typically, if we want to commission a sculpture, a painting or we want to publish all future sequels to a successful book.

How to determine the remuneration

Alicensing agreement is a consideration. It must set out the amount of the author’s remuneration, or at least how it will be calculated. If it is dependent on the income from the use of the licence, the author has the right to consult the documents to calculate the actual remuneration, and can check, for example, paid or unpaid invoices. However, the agreed remuneration is not necessarily remunerative. The remuneration can also be granted in kind, the contract is then in the nature of a so-called barter contract.

In certain cases, the contract can also be concluded for no consideration, e.g. if the photographer assigns his rights to a charitable organisation or, for example, to everyone under certain conditions (creative commons). If a trademark or patent is involved, the gratuitousness must be explicitly stated in the contract.

License Agreement

Do you need to draw up a licence agreement or just review the existing one? That’s what we’re here for. We’ll ensure a fair copyright setup for you, whether you’re a licensor or a licensee. We act quickly, at upfront prices. You can only pay after the service has been provided.

Tip: Many of us deal with copyright issues every day – whether we create our own works or work with others’ works. What are you entitled to as an author or an assignee? And what must not be missing from the licence agreement? The answers to the most important questions about copyright can be found in this article.

How to terminate the licence agreement

An indefinite term agreement may be terminated by giving one year’s notice from the end of the month in which the notice is received by the other party. Fixed-term contracts generally cannot be terminated unless there has been a material breach by one of the parties.

An exclusive licence agreement may be terminated if the assignee makes no or insufficient use of its licence, so that the author derives little or no income from it. Withdrawal terminates the contract from the outset. The parties must therefore repay each other what they have already performed.

If you intend to enter into a licence agreement, be careful whether it is exclusive or non-exclusive, whether it is for a fixed or indefinite term. Thus, they differ in the possibility of termination, in the scope of the assignee’s rights and in the way the remuneration is negotiated. We recommend that you have a tailor-made contract drawn up, as each work is specific in some way and you need to transfer the specific situation perfectly into the contract to avoid unpleasantness, such as penalties (contractual fines and penalties) or lost profits. A model licence agreement downloaded from the internet may not reliably protect your rights, whether you are the author of the work or the person who wants to use it.

Tip: The field of intellectual property law has seen turbulent developments in recent decades. Illegal copying of programs, use of other people’s photographs, distribution of music albums or other copyrighted works – this is just a fraction of what we encounter in the Internet age. We will now focus on one of the most common phenomena – downloading and sharing music and films.

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License Agreement

Do you need to draw up a licence agreement or just review the existing one? That’s what we’re here for. We’ll ensure a fair copyright setup for you, whether you’re a licensor or a licensee. We act quickly, at upfront prices. You can only pay after the service has been provided.

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Author of the article

JUDr. Ondřej Preuss, Ph.D.

Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.

Education
  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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