How to Conclude a Copyright Agreement for a Work?

Copyright, put simply, refers to the author's right over their work. From an objective standpoint, it encompasses a set of legal norms that govern related legal relationships. Alternatively, in a subjective sense, copyright can be viewed as encompassing both tangible and intangible rights associated with copyrighted objects.

Clients often encounter confusion regarding the legal aspects of copyright. Questions frequently arise about when copyright is established for a work, whether the work requires government registration, and how rights to the work can be transferred to another individual. Alongside these are numerous related queries that can appear complex.

If you're not keen on navigating these issues on your own, our legal team is ready to assist. Boasting over a decade of experience in this domain, we are well-acquainted with the intricacies of contract law and adept at mitigating risks in intellectual property. We can help you identify what qualifies as a copyrightable subject, the necessity of registration, ways to avoid losing rights to your work, and explain intricate legal aspects. Moreover, we can craft a copyright agreement that suits your specific needs.

It's worth mentioning that personal non-monetary rights are inherently owned by the author and usually don't carry commercial value. Monetary rights, which are the ones that can be granted or transferred, will be elaborated on further in this article.

Copyright on a work: When does it become effective, and who is the author?

Copyright on a work is established from the time of its creation and does not require government registration. This rule is widely accepted in most countries globally. Therefore, the individual who has created the work is recognized as the author until proven otherwise. A work is considered created when it is given a specific form, such as electronic, written, etc. The primary subject in this context is the author of the work, the person who created it. Later, the author may transfer (alienate) their proprietary rights to other individuals, who then become subjects of copyright too. How does the transfer of copyright occur?

Transferring (alienating) copyright: Methods and processes

The transfer (alienation) of proprietary rights on created intellectual property is done through a relevant agreement. This agreement should detail the scope of rights being transferred, whether in whole or in part, the cost, and the terms of payment. Proprietary rights can be transferred either for a specific period or indefinitely. In any case, it's crucial to determine when the rights transfer to the other party.

In our practice, we once facilitated a deal for selling (alienating) proprietary rights to certain images created for a client's website. While preparing the contract, we precisely defined the images, the proprietary rights for the images to be transferred, and other conditions. Following the payment, both parties signed a transfer-acceptance document. This ensured the client's transaction was secure and legally sound.

Moreover, proprietary rights on copyrighted objects can also be:

  • incorporated into the statutory capital of corporations;
  • given away under a gift contract;
  • transferred through inheritance or bequeathed.

Thus, there are numerous methods for alienating proprietary rights.

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Providing usage rights to copyrighted objects

To grant proprietary rights for a particular copyrighted object, it's usually enough to issue a license or to sign a licensing agreement with either the author or the individual possessing the appropriate proprietary rights to the work. A licensing agreement is a legal transaction that governs the use of copyrighted objects. It is established between the licensor (the party owning the proprietary rights to a specific copyrighted object) and the licensee (the party who will use the copyrighted objects).

Issuing a license or concluding a licensing agreement is a widespread method for allowing the use of proprietary rights for various works. For example, if you want to play music in your own shopping center, or use a photograph for your website, these scenarios typically require a licensing agreement or obtaining a license.

In a case we handled, we assisted a client in negotiating a licensing agreement between the holder of proprietary rights to an audiovisual work and our client who wanted to use part of this work in their advertising campaign. Through the licensing agreement, we were able to address the use of proprietary rights for the audiovisual work, royalty arrangements, and other terms, and we guided the entire contract conclusion process. If you're considering entering into a licensing agreement, we have several recommendations (note that this list is not comprehensive).

License type: Exclusive, non-exclusive, or single use

The term for which the right to use copyrighted objects is granted should be noted, ensuring that the duration of use does not exceed the period of copyright protection.

Rights Granted and Their Usage Methods – This is one of the most critical elements of the agreement. It requires a clear definition of the rights that the licensee is permitted to use. If the licensee employs rights not covered by the contract, it could lead to breaches, resulting in adverse outcomes such as claims or lawsuits. Therefore, it’s essential to first ascertain how the work will be used when planning its utilization.

Compensation for the Author (or the party holding the proprietary rights to the work) can take various forms: a one-time fixed amount, royalties (regular payments), or a mixed approach, like in franchising (an initial payment plus monthly fees). Regardless, the parties must determine and agree on the compensation and the method of payment in the contract.

Other Essential Terms for the Agreement – Parties are advised to specify rights and responsibilities, liability of the parties, dispute resolution mechanisms, confidentiality, and the handling of personal data.

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Custom Creation of Copyrighted Objects: Acquiring a Tailor-Made Work and its Proprietary Rights

Commissioning a work and its subsequent use is a unique method of managing proprietary rights in created works. This approach is used when legal arrangements call for the creation of a specific work followed by the transfer of its (proprietary) rights for the use or ownership of the client. This setup is frequently utilized. For instance, you might commission a photo session, a specific design for a home renovation, the creation of a character for a video game, an architectural design, or an audiovisual piece.

Contrasting with a contract for transferring proprietary rights, a commissioning and use agreement can be established even before the work is created, meaning the author has not yet obtained proprietary rights to it. For example, we crafted a contract for one of our clients for the creation of sketches for manufacturing certain items. It was decided to use a contract for commissioning and using an intellectual property item, which enabled our client to:

  • Specify the technical requirements and describe the necessary modifications to the work for the transfer of both the rights and the work itself.
  • Set the payment terms to be fulfilled only upon the client's receipt and approval of the work.
  • Establish other essential conditions for the deal, such as penalties for failing to meet obligations on time.

Therefore, if you require bespoke work, using this kind of contractual structure for commissioning and utilization is an advisable option.

Regardless, if you or your business encounter the need to arrange the use of a copyrighted object or to transfer rights to another party, our legal experts are prepared to assist by:

  • Offering advice on utilizing or alienating proprietary rights associated with intellectual property assets.
  • Crafting contracts, additional agreements, and other relevant documents, as well as assessing existing contracts for potential risks.
  • Conducting the registration of copyright, should it be necessary.

Our team of specialists ensures a high standard of service, focusing on providing robust protection for your intellectual property.

The fees for our contractual law services can be found here.

Publication date: 20/11/2023

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