The contract that transfers the proprietary copyrights and the license agreement

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Nowadays, in order to legally use and dispose of a work, we must either obtain the consent of an authorized entity or use the institution of fair use. If the second option is not possible, consent should be expressed in the contract of the transfer of economic copyrights or in the license agreement. While many people are unaware of this, the agreements are not the same thing. So what's the difference?

Proprietary copyrights

To answer this question, you first need to understand what economic copyrights are. The difference between them and moral rights was already discussed in the previous article. As a reminder, it is worth pointing out that the division between them results from different rights that the creators have within their framework and from the different scope of protection.

Proprietary copyrights are rights of an economic and property nature, shaped like property rights. The creators are entitled to it from the moment the work is created until it expires (essentially seventy years after the creator's death) or is sold or surrendered. Therefore, property rights, unlike personal rights, are not unlimited in time and are not transferable. Under these rights, the creator (or the authorized entity that acquired them) has the exclusive right to use the work, to freely dispose of it in all fields of use and to receive remuneration for it.

Proprietary copyrights, pursuant to Art. 41 sec. 1 of the Act on Copyright and Related Rights, may be transferred to other persons by inheritance or on the basis of an agreement. Moreover, the acquirer of economic copyrights may transfer them to other persons, unless the parties agreed otherwise in the original agreement.

Agreement that transfers copyrights

Definition and limited duration of the contract

An agreement that transfers economic copyrights is an agreement which - as the name suggests - transfers economic copyrights to a third party. Its characteristic feature is that the effects of transferring these rights are limited in time. This means that economic copyrights can only be transferred for a specified period of time. After the expiry of the period specified in the contract, these rights return to the entitled person (so there is no need to conclude a separate agreement transferring the rights back to the entitled person - unless, of course, the parties agreed otherwise in the contract). Therefore, the ties with the creator are not completely severed. This is due to the fact that the author has the right to exercise his moral rights (e.g. to control the way the work is presented), which may effectively limit the use of economic copyrights, as well as the fact that economic copyrights are not unlimited in time (which as a rule, they expire 70 years after the author's death).

Remuneration

An agreement that transfers economic copyrights, pursuant to Art. 43 of the Act on Copyright and Related Rights, it can be paid or free of charge. However, if the contract does not clearly indicate that it is free of charge, it is assumed that the creator is entitled to remuneration. In addition, if the amount of this remuneration has not been specified, the amount is estimated taking into account the scope of the right granted and the benefits resulting from the use of the work.

Another important feature of the above-mentioned of the contract is also the fact that the buyer of property rights should use or distribute the work, if the seller's remuneration depends on the economic effects of using or disseminating the work (e.g. the author of the book sells the proprietary copyrights to a publishing house that undertakes to publish the book, while the author's remuneration depends on the number of copies sold).

Contract form

The contract that transfers the proprietary copyrights must be concluded in writing, otherwise null and void. The lack of the required form will make it invalid, so the property rights will not be sold.

Scope of use - fields of use

In the contract, the parties must also precisely specify in which fields of use the buyer can use the work. In simple terms, the fields of exploitation are the ways of using the work (e.g. broadcasting, playing, reproducing, exhibiting or disseminating the work). It should be remembered that the fields of use should be specified in detail in the contract, because the clause entitling the buyer to use the work in all fields of use may be considered invalid by the court in the event of a conflict between the parties. Moreover, the provision entitling the buyer to use the work in fields still unknown (which will be known only in the future) will also be invalid.It is also important to include in the contract a provision regulating the issue of remuneration for the use of the work in individual fields of use - because unless the contract provides otherwise, the creator is entitled to a separate remuneration for each field.

The entitled person may transfer the copyrights in whole or in part (if they transfer them in full, they will not be able to use these rights for the entire duration of the contract and will not be able to earn money on them) - however, there are exceptions to this, e.g. the co-creator of the work cannot transfer all property rights to a given work, as they also belong to the other author; moreover, unless the contract provides otherwise, the author retains the exclusive right to authorize the exercise of derivative copyright, despite the fact that the contract provides for the transfer of all economic copyrights.

It is also worth emphasizing that the buyer of economic copyrights may not introduce any changes to the work, because the integrity of the work is a personal copyright, vested only by the creator.

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License agreement

Definition

The license agreement is a contract for the use of a work, and the main feature that distinguishes it from a contract for the transfer of economic copyrights is that in the case of a license, the property rights remain with the creator - so the privileges resulting from the author's economic right are not lost. This means that - unlike contracts transferring property rights - the creator, despite granting a license to use the work to a third party, can still use it himself, and even grant further licenses (unless he has granted an exclusive license).

It is worth noting that this article only presents the issues related to the copyright license agreement (i.e. authorizing the use of the work within the meaning of the Copyright Act). It should be remembered that licenses relating to other intellectual property rights (e.g. patents, trademarks) are slightly different from copyright licenses, therefore license agreements relating to them should be created on the basis of the provisions of the Act - Industrial Property Law or other.

Scope of use - fields of use

In the license agreement, the parties must first of all define the rules for using the work and its scope. First of all, the fields of use should be defined (on the same terms as in the case of the transfer of property rights, i.e., for example, it is not possible to generally define all the fields of use or to grant permission to use a work in a field that is unknown at the time of signing the contract).

Time and place of using the license

The parties to the contract must also specify the time for which the license agreement is concluded - this means that if the contract does not specify the duration of the license, the licensee cannot use the work for an unlimited period, but only for a period of 5 years; if the parties wish to specify a different license term, they should clearly indicate it in the contract. The place of use of the license should also be indicated (e.g. the license to use a computer program may be limited to one computer located at the licensee's workplace).

License type

It is important that the parties agree on the type of license, i.e. whether it is exclusive or non-exclusive. The exclusive license may reserve the exclusive use of the work in a specific way (the licensor undertakes not to grant any more licenses for the same work). A non-exclusive license, on the other hand, means that a licensor may license the same work to multiple entities at the same time. We can still deal with sub-license, i.e. granting a further license by the licensee, but unless the agreement between the licensor and the licensee provides otherwise, the licensee cannot authorize another person to use the work within the scope of the license obtained. Therefore, the express consent of the licensor is required for sublicensing.

Contract form

The form of the license agreement depends on the type of license: if the holder has granted an exclusive license, a written form of the agreement is required, otherwise null and void. On the other hand, the conclusion of a non-exclusive license does not require a specific form, but it is always safer to conclude a contract in writing.

Remuneration

As in the case of the contract for the transfer of proprietary copyrights, if the license contract does not state that it is free of charge, it is assumed that you should be remunerated for granting it. If the parties do not agree on the remuneration in the contract, it is due according to the scope of the right granted and the benefits resulting from the use of the work. Also, unless the contract provides otherwise, the licensor is entitled to a separate remuneration for the use of the work in each separate field of exploitation.

The contract that transfers the proprietary copyrights and the license contract - summary

Pursuant to the provisions of the Copyright Act, the contract that transfers economic copyrights transfers to the buyer, upon acceptance of the work, the right to exclusive use of the work in the field of use specified in the contract. In the absence of an express provision on the transfer of rights, the author is deemed to have granted the license (Articles 64 and 65 of the Act). As it results from the above, it should be clearly indicated in the contract that the entitled party undertakes to transfer the property rights - in the absence of such an obligation, it is assumed that we are dealing with a license agreement.

Finally, it is worth recalling the most important differences that exist between both types of contracts:

  1. the contract for the transfer of proprietary copyrights transfers certain property rights to the work (in specific fields of use) - the vendor loses these rights and cannot use the work in this respect; in the case of a license agreement, the authorized (licensor) only authorizes to use the rights to the work in specific fields of use - does not lose them and can still use them;

  2. in the case of a contract for the transfer of proprietary copyrights, the buyer becomes the subject of these rights; in the case of a licensing agreement, the licensor remains the owner of those rights and the licensee is only authorized to use them in certain ways;

  3. in the case of an assignment contract, the same rights cannot be transferred to two different entities at the same time; in the case of a license agreement, it is possible to grant a license to use the work to the same extent to two or more entities (provided the license is non-exclusive).