Commercialising intellectual property – Assignment and Licensing options for copyright
Are your literary or musical works getting republished or reproduced? Do you need to commercialise your intellectual property? How can you keep your original works safe?
Licensing and Commercialising your Copyright
Choosing the right method of intellectual property commercialisation can often be tricky to navigate, and will wholly depend on a copyright owner’s preference about control and continual ownership.
Under section 196(1) of the Copyright Act 1968 (Cth), copyright is personal property, and under this section can either be assigned or licensed to another person to use in a specific way.
These are the two primary ways copyright can be exploited for financial gain.
Copyright Assignments
Copyright assignments relinquish ownership of the copyright to the other person (the ‘assignee’), often in exchange for a sum of money.
Assignments may not be forever. Instead, they might only be partial (where copyright is assigned only for a limited time, on specific terms).
How do I assign my Copyright?
There are certain formalities that you must comply with should you wish to assign copyright. Under the Act[1] the assignment of copyright (whether full or partial) will not be valid unless the assignment is contained in writing. The Act also provides that the assignment can be limited to a specific region in Australia or for a specific time period.
It is also essential that if you intend to make a partial assignment, the assignment is expressed without unlimited terms or absolutely.
If this happens there will be right to have the copyright reverted to you.[2] If the partial assignment is expressed in unlimited and absolute terms, however, whether or not you intended for the copyright to revert to you after a particular period of time may not matter, and there may be no right of reversion.
In these circumstances it is important to engage a lawyer familiar with drafting.
Copyright Licensing
Copyright licensing is only temporary, and differs from assignments in that copyright owners are allowed some form of control over the intellectual property rights throughout the duration of the license. Licensing does not transfer copyright ownership to the other person (the ‘licensee’), rather it provides the licensee permission to use your intellectual property in a way outlined in its copyright rights.
In this circumstance, you can still sue a third party for copyright infringement as you are still its owner under the Copyright Act.
Normally, permission to use the copyright owner’s work is acquired in exchange for royalties or a lump sum payment. However, the license may exist as a bare license, authorisation or permission where no consideration (money) is exchanged.
Generally, as a copyright owner, you may choose to grant either an exclusive or non-exclusive license.
Exclusive Licenses
An “exclusive licence” is an agreement whereby a copyright owner entitles a licensee to use the owner’s copyright to the exclusion of all others (including the copyright owner him or herself).
Under an exclusive licence agreement, the right of exploitation may be limited to particular timeframes, geographical locations and may only be used for specific purposes. Ownership ultimately remains with the original owner.
Under the Copyright Act 1968 (Cth), licensees under exclusive licence agreements have greater rights than licensees under a non-exclusive licence Agreement. This includes the opportunity to sue a third party for copyright infringement (along with the owner who also retains this right against a third party). In Australia, a licensee of an exclusive license can also sue a copyright owner for copyright infringement should the copyright owner breach the terms of the exclusive licence.
Exclusive licencing arrangements are more suitable for licensees who wish to pay for exclusive exploitation of the copyright of the owner, and do not wish to share it with others.
Non-Exclusive Licenses
Under a “non-exclusive licence” a copyright owner does not have to limit the use of the copyright to one person. That is, under this type of arrangement, the copyright owner can extend the licence to multiple parties at one time. This can be a more effective method of commercialisation of a copyright owner’s intellectual property.
Non-exclusive licence arrangements are more appropriate for copyright owners who wish to retain control over the commercialization of their products and copyright. In this arrangement, distinguishable from the exclusive licence, the copyright owner can continue to use his or her copyright concurrently to use by the licensee.
How do I licence my copyright out to others?
Under section 10 of the Copyright Act, to be valid an exclusive licence must be reduced to writing. Other types of licences should also be reduced to writing in the form of a licensing agreement. Generally, the terms of a licence will be set out in a formal Copyright Licence Agreement.
Have questions about copyright assignment or licence?
We’ve put together more information about the types of copyright licences in our resource centre. For more information on how to commercialise your intellectual property, please contact our Intellectual Property team on (07) 3252 0011.
Additionally, if you are an employee and are unsure of whether you own the work you have created during the course of your working relationship with your employer, contact a member of our Intellectual Property team on the number above. Or, to read about whether you own your copyright as an employee, click here.
Written by Lawyer edited by Jackson Litzow (student placement).
Footnotes
[1] Copyright Act 1968 (Cth) s 196(3).
[2] Sumner v Beyond Properties (2003) 59 IPR 268.