If You Don’t Set the Terms of a Copyright License, a Court Will

Almost a year ago, I wrote about why independent contractors (as contrasted to employees) own the copyrights in works that they create. As a result, a prudent customer will ensure that the contractor assigns its copyrights to the customer (Work Made for Hire – a Term Made for Confusion). This post discusses the implied copyright license that is granted in the absence of an assignment.

If there is no assignment provision, a court will determine that there is an implied license under the copyright. The rationale is that it would be unfair to deprive the customer of all rights in a work for which the customer has paid. The issue, then, will be the terms of the implied license.

The one certain characteristic of the implied license is that it will be non-exclusive rather than exclusive. The reason: Under 17 U.S.C. Section 101, an exclusive license is considered a transfer of copyright ownership. And under 17 U.S.C. Section 204(a), a transfer of copyright ownership must be in writing and must be signed.

All other characteristics of the implied license, however, will be determined by the court based on interpreting the intent of the parties as evidenced by their conduct. These characteristics include, for example:

• Whether the implied rights are limited to use, or include other rights such as? reproduction, distribution, public performance, and preparation of derivative works (see Copyright Protection in One Easy Lesson).
• Whether the license includes a right to sublicense.
• Whether the customer’s license rights are restricted to a specified industry.
• Whether the license is irrevocable.

The bottom line: An independent contractor agreement should expressly either assign copyrights or specify the terms of a copyright license. Otherwise, a court will infer an implied license that likely will not match either party’s needs or expectations.

Related posts:

• Independent Contractors: How to Assign Copyrights
• Implied Copyright License: A Life-and-Death Example

Photo credit: stock.xchng

Dana H. Shultz, Attorney at Law  +1 510-547-0545  dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.