Content License Agreement

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Content License Agreement

A Brief Introduction About Content License Agreement

A content license agreement is an agreement through which content is licensed from one person to another. The owner of the rights in the content, whether it is video content, music content, or any other type of content, gives another person the right to use such content for a particular purpose. A content agreement of this nature can be created for any content that involves intellectual property rights. By licensing your content to a person, you are giving them the right to use your intellectual property rights.

If the rights in a particular video are being licensed, the parties will have to enter into a video content license agreement. If the content on a website is being licensed, the parties will have to enter into a website content license agreement.

Who Takes the Content License Agreement?

A content license agreement is entered between the owner of the rights in the content (known as the licensor) and the person who wishes to use it for a limited period of time (known as the licensee).

Purpose of the Content License Agreement

The purpose of this agreement is to lay down the terms and conditions under which the content is being licensed to the licensee. The licensee will only be allowed to use the content for the purpose that has been stated in the agreement, and for the period mentioned in the contract. Hence it is important that all these key details are laid down in writing. The purpose of this contract is also to prevent any unauthorized use of the content. The licensee will not have the right to use and exploit the content in any way that has not been expressly permitted by the licensor.

Contents of the Content License Agreement – Inclusions

The agreement must first set out the details of the licensor and the licensee, including their names, contact details, and their profession. It must then state the reason for entering into this license agreement. How the licensee intends to use the content must be clearly spelled out. The licensee fee that is payable to the licensor from the licensee should be included in the contract. The term for which the agreement shall be valid and the licensee will be allowed to use the content is an important part of the agreement. It must also state whether the license is an exclusive or non-exclusive one.

The agreement must also state that the licensee shall not have the right to use the content for any reason other than that stated in the contract, and any such unauthorized use shall be deemed to be a breach of contract.

The representations and warranties of both parties and the circumstances in which either party may terminate the contract must also be laid down.

How to Draft the Content License Agreement?

The following are the steps to follow while drafting this agreement:

  • The licensee will approach the licensor and seek permission to use the content for a specific reason and for a specified term.
  • The parties will then negotiate the licensee fee and the terms of use of such content.
  • The agreement should be drafted clearly by providing for all the important aspects.
  • The agreement must provide for possible breaches of contract and remedies for such breach.
  • The agreement must then be reviewed and signed by both parties.

[ Also Read: Trademark Transfer Agreement ]

Negotiation Strategy

  • The negotiations in this type of an agreement will center around the licensee fee payable.
  • The licensor will also layout strict rules for the use of the content by the licensee.

Benefits and Drawbacks of the Content License Agreement

The following are the benefits and drawbacks of a content license agreement:

  • The agreement provides the licensee with permission to use the content for a particular purpose.
  • The licensor earns a licensee fee for such use.
  • The licensor will have a remedy in place if the licensee exceeds the terms of the agreement.

What Happens in Case of Violation?

In case there is a breach of the agreement by either party, the non-breaching party can serve a notice and ask the breaching party to cure such breach within thirty days. If this is not done, the agreement can be terminated by the non-breaching party. A breach of the agreement will mean a breach of any clause, obligation, representation, or warranty by either party. The agreement can also be terminated for other reasons such as the commission of an offense, bankruptcy, insolvency, etc.

In case of any dispute regarding the terms of the contract, the parties can also choose to submit the dispute to arbitration(1). In such a case, the parties will select the arbitrators according to the arbitration clause in the agreement, and the arbitrators will have to settle the dispute in a time-bound manner. This is a very effective dispute resolution mechanism and is very popular.

A content license agreement is extremely important and must be created each time any kind of content is being licensed. It is essential to lay down the terms of use so that any unauthorized use of the content can be prevented. The agreement will lay down the exact manner in which the content may be used, and the licensee is not allowed to exceed such terms in any circumstances. The use of the content is governed absolutely by the agreement.