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Benefits of Content Licensing Agreements

Mallory King - December 30, 2019 - Content Licensing, Internet Law

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A Content Licensing Agreement is an arrangement between an entity that creates content (typically copyrighted materials such as writing, photos, videos, or multimedia content) and an entity that wishes to use that content so that it can be accessed by or distributed to its end users. While copyright licensing is typically the primary use of Content Licensing Agreements, the agreement may also protect other forms of intellectual property and also will often function as a contract between the two parties and their working relationship. Content Licensing Agreements are vital for both content creators and content users and can provide benefits for each party so as to create a mutually acceptable licensing arrangement.

Benefits for Content Creators (“Licensors”)

  1. Confirm the Content Being Used. The first benefit that a Content Licensing Agreement confers onto a content creator is  confirmation of what copyrighted materials the licensee is able to use. Content creators have property rights in the creative work that they produce, and while licensing shares those rights with others, sharing is not an all-or-nothing proposition under a Content Licensing Agreement. A creator can license only parts of their work to a user. Additionally, in the Content Licensing Agreement, a creator can control just how much and in what ways a user can make use of the creator’s work. Copyright rights are valuable and controlling the use of copyrighted works protects that value.
  2. Control the Scope of Content Use.  Content creators will want to carefully construct the limits in the Content Licensing Agreement. If desired, the creator can ensure that the work is still free to be used for other purposes while the user distributes, modifies, or displays the work for their own purposes. The creator can also limit the scope of the license in terms of time, so that after a predetermined period all of the copyright rights return to the creator to be enforced or licensed for profit again in the future.
  3. Protect Trademark Rights. If any trademarked material is included in the content being licensed by the creator, the Content Licensing Agreement can also license those materials, and will sufficiently cover quality control in order to prevent the trademark rights from being lost due to naked licensing. Trademark owners only retain rights to their marks if they police the quality of the products being sold under the mark. This means that if a licensee gains the right to use the mark through the Content Licensing Agreement but fails to uphold the quality associated with the mark, the creator can inadvertently lose the value of that trademark. A Content Licensing Agreement will include protections for the creator’s trademarks so that an otherwise beneficial relationship does not result in the damage of intellectual property.
  4. Payment Provisions. The Content Licensing Agreement is a contract for the sale of property, and with that kind of contract comes an agreement for how payment will be made and at what time. A clear obligation for payment is vital when one is handing over property to another entity to ensure a fair transaction. The creator is giving their intellectual property in the form of copyright permissions to the user, and a payment agreement protects the creator from a user who may later refuse to pay what is owed.

Benefits for Content Users (“Licensees”)

  1. Anticipate Allowed Uses.  A Content Licensing Agreement gives a user permission to do certain actions – such as modify, distribute, or display – with another’s creative works that would ordinarily infringe on the creator’s copyright rights. This is particularly useful in the context of a website, where a user may need content to fill the pages of a website, but may not have the time or resources to generate the amount of content needed. The user can enter into a Content Licensing Agreement with a creator to get permission from the creator to display the creative work on the website, modify that work so that it fits the needs of the website, and distribute that work to the end users that visit the website. The Content Licensing Agreement solidifies a user’s permissions to do these actions with the creator’s materials, and protects the user from liability for copyright infringement. It also outlines what content can and cannot be used so that there is no misunderstanding between the user and the creator what content is on offer.
  2. Limit Use By Other Users.  A user may want to ensure that their website is the only one with the particular content offered by the creator. By negotiating for exclusive rights in the license for the content, a user can control to whom the creator licenses their work. This can enhance a website created with licensed content by ensuring that the content on that website is available in only one place on the internet, and the licensee’s users can only come to the licensee for that content.
  3. Indemnification Clause.  The Content Licensing Agreement will also include indemnifications for the representations and warranties the creator has made about their work. This protects the user from financial loss that may otherwise occur in the event of liability or a breach of contract. These portions are vital to any contract, and the Content Licensing Agreement is no different.

Need a Content Licensing Agreement?

If you need a Content Licensing Agreement, to either license your work as a creator or get permission to use another’s content as a user, Traverse Legal’s attorneys can help you draft an agreement for your content that will protect your interests.

This blog post contributed, in part, by Traverse Legal Virtual Law Clerk Scott Pehoushek.

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