The word “copyright” is a frequently used term, though many people don’t know exactly what it means. A work that is protected by a copyright (anything of such is referred to as “copyrighted material”) can be a very valuable item indeed, even if it’s not a tangible item. Knowing what a copyright is, how copyright licensing and copyright law work, and how to protect a copyright license agreement is key for any company dealing with any type of copyright licensing.

What Is Intellectual Property?

Commonly abbreviated as IP, intellectual property is, collectively, the assets that are the products of original, creative thought owed by an entity. IP assets commonly are the result of years of research and development, in addition to large capital investments. IP includes copyrights, patents, trademarks, industrial designs, geographical indications and trade secrets. Famous examples of IP in the consumer world include the iPhone (industrial design), the secret recipes for Coca-Cola and KFC (trade secrets), and Champagne (geographical indications).

What Is a Copyright?

A copyright is a collection of rights that grants the copyright holder or copyright owner exclusive right to make copies, license or otherwise profit from any literary, musical or other type of work. The term “copyright,” when broken down, means that the copyright owner has the right to copy. In short, it’s a law that protects a collection of rights of the creator or owner of an original work of art or intellectual property. A work that legally and successfully has gone through the copyright process is considered “copyrighted.”

What Is Copyright Licensing?

A copyright license is an agreement that allows a person or entity who holds the copyright (the licensor) to assign (or transfer) the copyright to another (the licensee). Typically, all copyright license types are for a set amount of time and may (or may not) be renewed at the end of the term. In the world of commerce, a company may license its brand name to another for a product, or perhaps product extension. An example of copyright licensing is when a musical artist licenses original work to a record company; the artist receives part of the profit when the recorded work is sold.

The Purpose of a Copyright License

In short, the purpose of copyright licensing and copyrights licenses is to profit from a copyrighted work. In most instances, a copyrighted work is valuable, and allowing it to be profited from through a copyright license agreement is in the best interest of the owner. Granting copyrights licenses for its use is a way many companies make a profit. A knockoff product, such as a counterfeit Nike sneaker, is a violation of a copyrighted work and infringes on the right of the owner and/or licensor (i.e copyright infringement). When properly executed, it results in a win-win for both parties involved.

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What’s Included in a Copyright License?

A licensing agreement is a legally binding contract between two parties — the owner of the copyright and the party who is licensing the copyrighted item. In typical licensing agreements, the licensor agrees to allow the licensee to use the copyrighted property (be it IP, technology, brand name, trade secret or industrial design) in exchange for compensation. This compensation could be an upfront fee, a royalty fee, or a combination of the two. A high-profile example of copyright licensing is between Nestle and Starbucks. Nestle (the licensee) paid Starbucks (the licensor) a fee for it to sell Starbucks-branded products through its worldwide distribution network. That example involved an upfront fee paid in addition to ongoing royalties for the duration of the contract.

How To Obtain a Copyright License

Yes, it sounds obvious, but in order to obtain a copyright license, you must, of course, first have permission to use that work. You can pursue the license by performing a search of the records of the copyright office (or have them do the searching for you). Once you’ve determined the owner of the material, you must use a licensing agreement, which is a legal contract stipulation that states the fair use terms of the deal. It dictates the scope of the license (exactly how it can — and cannot — be used), the financial terms, the time frame of the agreement and any other rights and/or limitations to the deal. The truth of the matter is, the licensing agreement is the crux of the entire thing.

About Copyright Security

Copyright security is all about the measures taken to protect the copyrighted item. The holder of the copyright has the exclusive rights to produce, reproduce, distribute, perform and/or display or license the work. This means that if any other entity wishes to use all (or some) of that work, a licensing agreement must be reached. Federal copyright law prohibits copyright infringement or unauthorized use and reproduction of copyrighted material. A work is “created” when made into a physical form for the first time or registered with the U.S. Copyright Office.

Where a VDR Comes into Play

An important tool to help protect your work or IP during the process is a virtual data room (VDR). A VDR is a secure, online virtual space that consolidates all the data used in any copyright license transaction.

The CapLinked VDR Solution

CapLinked, an industry leader in the VDR space, is a provider of virtual data rooms for users in many industries, including those involved with copyright licenses. CapLinked VDRs include cutting-edge features, such as document and version management, high-level administrative controls, multiple layers of security, encryption and 24/7 customer support. And because its user-friendly interface is compatible with virtually every OS, users can upload, edit, and download documents from every type of computer, smartphone or tablet. To learn more about how CapLinked can help with your copyright licensing transaction with our virtual data rooms, start a free trial.

Chris Capelle is a technology expert, writer and instructor. For over 25 years, he has worked in the publishing, advertising and consumer products industries.

References: – Copyright Security

BrandonGaille – 7 Examples of Intellectual Property

Copyright Alliance – What Is Copyright?