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Content License Provisions: TheBasics
by Richard Stim
 
Content licenses come in many flavors and each has special concerns. Youmay not see all of the provisions I discuss below, in an agreement. Or youmay see additional provisions unique to the license—for example additionallanguage is required if content from a book were used in a database. Forsome licenses—for example a simple permission agreement—some of theseprovisions would be overkill. Nevertheless, these clauses and provisions arelikely to appear in one form or another in most content agreements.One other note: typically, the parties negotiating a content licenseconcentrate most of their energy on defining and limiting the use and relatedbusiness terms. That’s important, of course, but equally important are theoften overlooked so-called “boilerplate” provisions such as the warranties,indemnity, governing law, and jurisdiction.Below is a section-by-section breakdown.
Introductory Paragraph
 The introductory paragraph should identify the people or companies enteringinto the agreement, known as the “parties.” The introductory paragraph mayalso include the parties’ business structure (corporation, sole proprietorshipand so on) and business address.Instead of Licensee and Licensor, the agreement can be drafted to use thenames of the parties throughout the agreement or terms such as “Artist” forthe licensor and “Manufacturer” for the licensee. But once you’ve chosen touse certain terminology such as this, make sure to use it consistentlythroughout the agreement.
Sample
:
Introduction.
This License Agreement (the “Agreement”) is madebetween__________________ (referred to as “Licensor”) and ____________________ (referred to as “Licensee”). The parties agree as follows:
 
“Whereas” Provisions.
In some license agreements, the introductoryinformation is referred to as the “Whereas” provisions. For example, theagreement might read: “Whereas DTK Company (the licensee) desires toLicense Agreement Basics © Richard Stim1
 
acquire rights.” The use of the term “whereas” has no particular legalsignificance.
The Work 
 Your content is often referred to as the “Work.” Any appropriate term can besubstituted instead of “work”—for example, “the Book” or “the Article”—aslong as this terminology is used consistently within the agreement. If morethan one work is being licensed from the licensor, each work can be identifiedseparately, such as Work #1, Work #2 and so on. You don’t need to go intogreat detail yet—it’s customary to do this in the first attachment to theagreement, “Exhibit A.” There, you’ll describe each work, or, if possible,reference a separate photocopy of the artwork or text that will also beattached to the agreement.
Sample
:
The Work.
The Work refers to the work described in Exhibit A. Licensor is theowner of all rights to the Work, and Licensee shall not claim any right to usethe Work except under the terms of this Agreement.
The Grant of Rights
 The grant of rights (also known as the “grant”) officially permits use of thework, describes the legal rights being licensed and establishes whether therights are exclusive or nonexclusive. In many cases this section distinguishesthe original Work from what is eventually offered by the Licensee by referringto the latter work as “Licensed Product,” “Licensed Content,” or “LicensedUse.”In a typical content license agreement, the grant must include the followingrights:
The right to reproduce.
This refers to the right to make copies of the work. This right is essential and without it, the licensee won’t get to square one. The right to reproduce is not unlimited. The agreement usually specificallylimits it to the uses defined within the Agreement or as defined in theattached exhibit.
The right to distribute copies.
This refers to the right to sell or give awaythe work. Reproduction and distribution are closely related and every contentlicense agreement requires both rights. Other rights, however, are optional.Below, I discuss what optional rights may be granted, and the differencebetween exclusive and nonexclusive rights. The following rights may also be included in a license agreement:
The right to adapt or create derivatives
. This refers to the right tomodify the work—for example, to alter the content so that only a portion isLicense Agreement Basics © Richard Stim2
 
used. The result of the modification is referred to as a derivative work. If thelicensee plans to create a derivative work, the grant of rights must reflectthat permission has been granted to modify the original work. It is usuallyrecommended that the licensor own the derivatives but that is often a matterof negotiation. In some cases, a licensee may add its own material to create aderivative. In those cases, the licensee may own its contributions.
The right to display publicly
. This refers to the right to publicly exhibit ordisplay a licensed work, for example, when content is displayed on a website.
Exclusive vs. Nonexclusive Rights.
Every license agreement is eitherexclusive or nonexclusive. Exclusive means that only the licensee will havethe rights granted in the agreement—no one else can be given those samerights for as long as the agreement lasts. Nonexclusive means that the ownerof the work can give the same rights to someone else—for example, twodifferent companies could license your content. The primary reason alicensee wants exclusive rights is to prevent a competitor from using thesame material.
Sample
:
Grant of Rights.
Licensor grants to Licensee:[
Select one
][ ] an exclusive license[ ] a nonexclusive licenseto reproduce and distribute the Work for the Licensed Content.[
Optional
] The right to modify the Work to incorporate it in the Licensed Content,provided that Licensee agrees to assign to Licensor its rights, if any, in anyderivative works resulting from Licensee’s modification of the Work. Licenseeagrees to execute any documents required to evidence this assignment of rights and to waive any moral rights and rights of attribution provided in 17U.S.C. § 106A of the Copyright Act.[
Optional
] The right to publicly display the Work as incorporated in or on the LicensedContent.
License Agreement Basics © Richard Stim3
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