Legitimate use of third-party property or rights requires the existence of an appropriate legal basis. For example, in order to be able to reside in a particular property, we need, in a nutshell, either the ownership of the property or the right to use it under lease or lending.
The same is true of the use of a work within the meaning of copyright law. The definition of a work is explained in an earlier article on the copyright transfer agreement, which we invite you to read. In order to legally use such a work, we should obtain – in most cases – a transfer of copyright in our favor or a license to use the work.
Rights transfer agreement vs. License agreement
Under a contract for the transfer of economic copyrights, the rights are transferred to the buyer, which means that the buyer becomes the rightful subject in place of the transferor (the creator or a third party who previously acquired the rights).
By contrast, under a license agreement, the acquirer (licensee) obtains only the right to use the work to the extent detailed in the agreement, without depriving the creator of his rights to the work. In this case, there is no transfer of rights from the creator to the purchaser, but only an authorization to use the work.
Agreement on transfer of author’s economic rights
Under a contract for the transfer of author’s economic rights, the transferor transfers the rights to the acquirer to the extent described in the contract and in the fields of exploitation indicated therein. Such an agreement does not have to cover all the rights that the right holder has. The creator may, for example, transfer to a third party the right to use the work only in one of the forms of fixation. For example, the transfer of rights may apply only to a work fixed in the form of an ebook, while the right to use the work in any other form of fixation remains with the creator. To the extent that the creator disposes of the copyright, he can no longer use it himself.
A contract for the transfer of author’s economic rights requires written form under pain of nullity. It should also regulate the remuneration for the creator, covering all fields of exploitation affected by the transfer. If the remuneration is not specified in the contract, by law the creator is entitled to an “appropriate” remuneration.
The transfer of copyright is usually made in perpetuity. The purchaser of the copyright has the right to sell it further, and also has the right to grant a license to use the copyright.
As a rule, the transfer of copyrights cannot be presumed – the sale of a work does not automatically result in the transfer of copyright in it. For the effect of their transfer, it is necessary to conclude a contract expressly providing for the transfer of these rights to the buyer.
License agreement
Under a license agreement, the licensee obtains the right to use the work under the conditions described in the agreement. Such conditions include, in particular, the scope and manner of use, as well as the place and time at which such use may occur.
As an example, the license granted by the photographer authorizes the licensee to use the photos only to the extent necessary to publish them on advertising billboards, which may be placed on the territory of the Lesser Poland province during the period until December 31, 2021.
Importantly, the photographer in the example above remains the holder of the copyright in the photos and, unless the license agreement provides otherwise, may continue to use them and license them to others in parallel.
However, the parties may provide for the granting of a so-called exclusive license, which will have the same effect as a license, that is, only to the extent of authorization to use the work, but with the proviso that for the duration of the license, the licensor will not grant a parallel license to any other entity. It can also be stipulated that for the duration of the license, the licensor itself will refrain from using the work. The licensee will therefore have the exclusive right to use the work during the term of the license.
As a rule, a license is granted for a certain period, which should be specified in the contract. If the license period is not settled, the statutory term, which is 6 years, applies. After the expiration of this period, the license expires and the licensee loses the right to use the work. If the license is granted for an indefinite period, the licensor may terminate the license with contractual or statutory terms.
As a rule, a license agreement does not require written form. The exception is the exclusive license agreement, which requires written form under pain of nullity.
As in the case of a transfer of rights agreement, the granting of a license involves remuneration to the licensor. If no remuneration is regulated in the contract at all, by law the licensor is entitled to remuneration in an amount that corresponds to the scope of the authorization and the benefits the licensee receives from it.
Unless otherwise stipulated in the license agreement, the licensee has the right to grant sublicenses, i.e. to authorize third parties to use the work to the extent that he himself has this right.
