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Licensing Frequently Asked Questions

What is a license?

Broadly, a license, when properly granted by a person, entity, or governmental agency (the “licensor”), allows the recipient (the “licensee”) the right to legally do something.  For example, in the U.S., state governments issue Drivers’ Licenses that allow people to drive vehicles on public roads.  In the intellectual property context, the owner of a copyrighted work may, for example, grant a license to a third party to copy and distribute that work, or incorporate it into another work.  The owner of a trademark may grant a license to a third party to use that trademark in the manner specified in a license agreement, for example a co-branded product.   A person may license their right of publicity, allowing a third party to use their name, image, likeness (“NIL”), or other aspects of their persona, in conjunction with the marketing and sale of goods and services. For more details, check out our Crown Licensing Page.

What is a copyright license?

For more detailed information about copyright, see our Crown Copyright page, as well as our Copyright FAQ.  In any discussion of copyright licensing, it is important to understand the exclusive rights held by a copyright owner because those are the rights that can be parceled out in a license.

The owner(s) of material capable of copyright protection possesses a number of exclusive rights in that creative work – often referred to as a “bundle of rights.”  Each of these rights may be licensed to third parties, either all to one party, or to separate parties.  The most significant of these rights include the following:

          a. The right to reproduce the work.  A copyright owner controls the making of copies of the work.  If you are the author and owner of a creative work, such as a photograph, graphic design, or novella, you alone can make copies and/or grant a license to third parties to make copies of that work.

          b. The right to create derivative works means the right to make new works based on the original work, such as sequels, prequels, spin-offs, translations, and other forms of adaptation. 

          c. The right to distribute a work grants the copyright owner the ability to control the manner in which a work is transferred or distributed to others, whether by license, sale, or otherwise.  The distribution right provides the copyright holder the right to prevent and control the distribution of a work.

          d. The right to publicly perform the creative work gives the copyright owner control of the way in which a work is publicly performed.  In general, a performance is considered “public” when the work is performed in a place open to the public where a substantial number of persons outside of the normal circle of family and friends are gathered, or a work is transmitted to multiple locations.  The performance right is implicated by, for example, showing a motion picture at a location open to the public, like a movie theater.

          e. Similar to the public performance right, authors have the exclusive right to control the public display of those types of works that can be displayed, such as photographs, sculptures, or graphic designs.

All these rights can be licensed to third parties by the copyright owner.

What is a trademark license?

For more detailed information about trademarks, see our Crown Trademark page, as well as our Trademark FAQ.  

A trademark is any word, name, symbol, device, or any combination of those things that identify the source of the goods or services of one party and distinguishes them from the goods or services of others.  A trademark owner can license use of his/her/its trademark(s) to a third party, thus allowing that third party to use the mark(s) in an agreed upon manner.  Typically, a trademark will be licensed so that a third party can use the mark in conjunction with the marketing and distribution of certain products or services, sometimes a stand-alone product, and oftentimes a co-branded product.  In exchange, the trademark owner will typically receive a royalty on the sales of items bearing the licensed mark.

For example, let’s say you make and sell baseball hats and you want to include the San Francisco Giants logo trademark on one of your caps.  To legally do so, you would need to secure a license from the San Francisco Giants Baseball Club, who owns that trademark.  If the Giants grant this license, in exchange, you would be required to provide the Giants with an accounting of sales of items bearing that mark as well as payment of a royalty based on the number of hats sold bearing that trademark.

Another common trademark license scenario is co-branding, which is when two brands release a product together that contains both brands on a single product.  This can be a great way to boost awareness because the product will be marketed to, and appeal to, the consumers of both brands.  Some well-known examples of co-branded products are BMW® and Louis Vuitton®, Taco Bell® and Doritos®, and Apple® and Nike®.

Is there anything particularly important to include in a Trademark License Agreement?

Yes, there is!  For one thing, a proper trademark license should contain a clear quality control provision that provides standards the licensee must adhere to concerning the use of the mark and the nature and quality of the products or services marketed and sold under the trademark.  Failure to include a quality control provision in a trademark license may result in a so-called “naked license” and the loss of significant trademark rights.  This is just one of the myriad considerations that must be taken into account when entering into a trademark license.

What is a Right of Publicity License?

For background information on the right of publicity please see the Crown Right of Publicity page, our Right of Publicity FAQ, as well as an article discussing the right of publicity here.  The right of publicity is the right to control the commercial exploitation of your name, likeness, voice, and other identifiable aspects of your identity (commonly referred to by the acronym “NIL”, which means ones’ name, image, and likeness, but refers to all aspects of your persona).  Examples of right of publicity licenses include Steph Curry’s deal with UnderArmour® and Lebron James’ deal with Nike®.  In both deals, the athletes granted these respective companies the right to use their name, image, and likeness (this may also include their jersey number, which is an aspect of their identity and persona) in conjunction with the marketing, advertising, and sale of shoes and apparel.  Of course, in exchange for use of their NIL rights, they are compensated handsomely (in addition to getting a lot of free gear).

What is the difference between an Exclusive License and a Non-Exclusive License?

An exclusive license grants the recipient of the license (the licensee) the sole right to use the intellectual property, to the exclusion of others, often even to the exclusion of the intellectual property owner.  A non-exclusive license grants the licensee the right to use the intellectual property, and others may also have the same or similar right.  By its very nature, an exclusive license can only be granted to one party, while a non-exclusive license may be granted to multiple parties.

An exclusive license may be broad – allowing use of the mark in all commercial endeavors – or narrow – allowing use of the intellectual property only within a narrow scope of activities, services, or products.  For example, a musical composition and master recording may be licensed exclusively to a film producer “for up to two minutes for use in the closing credits of a feature-length film.” This example of a license may be exclusive, meaning the owner of the composition and recording would not license it to any other party for use in the end credits of a feature-length film.  In this example, the scope of the exclusive right to use this composition and recording is rather narrow – just in the closing credits of a feature-length film.

Exclusivity may be broad or narrow in time.  For example, the copyright owner may agree that this license will be exclusive, but only for two years.  Thereafter, he/she/it can license to another party.

Similarly, an exclusive license can be carved up geographically.  For instance, a trademark owner may grant an exclusive license to a distributor , but only for use in France, while at the same time granting an exclusive license to another distributor for use only in Germany, and so on.

A non-exclusive license is one where the licensee receives a license, but the licensor may license those same rights to other parties.  A non-exclusive license can be parceled out narrowly or broadly just as an exclusive license.  For example, if a licensor licenses a work to multiple parties on a non-exclusive basis, a licensee may receive a non-exclusive license to use a trademark or copyrighted work, but the licensee may have competitors that have the right to use that same trademark or copyrighted work for competing products.  Typically, a non-exclusive license is less valuable to a licensee than an exclusive license because there are others that have been granted the same or similar rights.

In short, there is great leeway concerning the terms of a license, including regarding exclusivity, and much thought should be put into licensing, whether you are the licensor or the licensee.

How do you get a trademark license? How do you get a copyright license? How do you get a right of publicity license?

To obtain a license to a trademark, copyright, or someone’s right of publicity you must contact the owner of that right and negotiate a license.

Is a license assignable?

It depends on the license.  Many licenses will have a “no assignment” clause because the intellectual property owner wants to control who is using their intellectual property.  Other license agreements will allow for assignment, but only with the express written permission of the intellectual property owner.  Like any other aspect of a license agreement, assignability is negotiable.

How do music licenses work?

Music licensing is complex, and it would be impossible to address all of the intricacies in this FAQ.  First, it is important to keep in mind that, with most popular music there will be two copyrights involved: (1) the copyright in the composition, and (2) the copyright in any particular recording of that composition.  So, for example, if you wanted to license Jimi Hendrix’s rendition of “All Along the Watchtower” you would need to secure a license to use the composition from its author – Bob Dylan (or more likely, the party that purchased Dylan’s music catalog) – as well as a license from the owner of Hendrix’s master recording of that composition (which is likely the Hendrix estate and/or the record company that released that recording).

If you want to play/perform a piece of music in public, you’ll need to secure a public performance license from one of the PPOs, such as ASCAP or BMI.

Again, music licensing is complex.  If you need help, please contact us.

Can I license an item of intellectual property to multiple parties?

Yes, you can.  Items of intellectual property, like copyrighted material, trademarks, or the right of publicity, can be carved up and licensed out in just about any way imaginable.  For example, the copyright owner of an episodic TV show may license that show to a distributor in South America exclusively for two years, to a distributor in the UK for five years, and to a distributor in China for three years.  In this scenario, each license agreement will clearly state the term and geographic territory of each license.  At Crown®, LLP we work with our clients to determine the optimal licensing structure for their intellectual property.