What is the difference between a licence and an assignment of copyright?

With a licence you give permission for your work to be used, but you remain the copyright owner yourself. You keep control and can set conditions on the use. With an assignment you transfer the copyright in full to someone else. That person then becomes the new owner and can decide for themselves what happens to the work. A licence can be compared to renting out, and an assignment to selling. Many creators prefer to grant a licence rather than assign their copyright. That way you retain a say over your work and can license the same track, text or design to several parties.

Does a licence agreement have to be recorded in writing?

A non-exclusive licence can in principle be agreed orally. That is inadvisable, however. No contract? Then you are guaranteed to fall out over the details. What exactly was permitted, and for how long? An exclusive licence cannot be granted without a contract at all - the law requires it. We advise recording every licence in writing, however small the collaboration may seem. That prevents conflicts later on and gives both parties clarity.

What is an exclusive licence and when do you choose one?

With an exclusive licence the licensee is the only party allowed to use the work. Even you as the creator may then no longer exploit the work for the same purpose, unless you expressly agree otherwise. Exclusivity is not something you give away lightly. It mainly arises where a party is investing substantially - think of a publisher launching a book or a label releasing an album. That investment also means a higher fee for you. But watch what exactly you are giving away: exclusive for the Netherlands is a different matter from worldwide exclusivity.

What happens when a licence agreement expires?

Once the agreed term has passed, the licensee’s right of use lapses. They may then no longer exploit the work. In practice this means that products have to be withdrawn from sale or that content has to go offline. Not every licensee complies with this of their own accord. It is therefore sensible to make clear arrangements in the agreement about what has to happen once it ends, including a reasonable sell-off period where that is relevant. Is the licence renewed tacitly? Then record that too, so that you are not caught by surprise.

How do you determine a reasonable licence fee or royalty?

There are no fixed rates for licence fees. What is reasonable depends on factors such as how well known the work is, the expected reach, the exclusivity and the duration. In the music industry royalty percentages are customary, while for one-off use of an image a fixed fee is often agreed. Trade associations sometimes publish guide prices that can serve as a starting point. At Liaise Advocaten we regularly help with setting and negotiating licence fees, so that you neither pitch too low nor end up unrealistically high.

Can I take action against infringement by third parties as a licensee?

That depends on what the agreement says. By default the right to take action against infringement rests with the copyright owner, not with the licensee. If you want to be able to act yourself as licensee, that has to be agreed expressly. With an exclusive licence this is arranged more often, because the licensee has a direct interest in protecting their investment. In the agreement you can record who takes action, who bears the costs and how any damages are divided.

The licence agreement: everything you need to know

You want your work to be used, but would rather not give it away. Or you are the one being asked whether someone may use your photograph, piece of music, text or format. People often think that this means assigning their copyright in the work to the other party. But that is not necessarily required. Entering into a licence agreement is an alternative.

What is a licence agreement?

A licence agreement is simple at its core: the rightholder gives another party permission to use their work, without assigning the copyright itself. A licence agreement is also referred to as a licence contract, and both terms mean the same thing. The other party, the licensee, may then use the work within the agreed limits. That right of use can be broad or very narrow. Think of arrangements about:

The duration of the licence;
The territory (the Netherlands, Europe, worldwide);
The manner of exploitation;
Exclusivity, or the absence of it;
A fee or a royalty.

“The advantage of a licence agreement for the licensor is that they retain control over the work.”

How do you enter into a licence agreement?

A licence agreement is a contract. That means you make arrangements both parties have to keep to. So always record those arrangements in writing, preferably with legal guidance. The licensee may only use the work as agreed. Go beyond that, and there may still be copyright infringement. Always put everything on paper. That prevents arguments afterwards and means everyone knows where they stand.

The licence agreement in the context of copyright

There are various forms of licence. In sectors such as media, entertainment, design and online content in particular, a licence agreement is therefore a useful instrument. Parties can, for example, agree an exclusive licence. The licensee then obtains the sole right of use. Importantly, since the amendment of the Dutch Copyright Act an exclusive licence must be in writing. Under a non-exclusive licence you may license your work to others as well.

Where parties agree a non-exclusive licence, the licensor can continue to license the right of use in the work to others too. Which form is appropriate depends on the negotiating position, the type of work and the commercial interests.

Under a copyright licence you give permission, as the maker, for your work to be used, without assigning the copyright itself. You therefore remain the owner of your creation. The licensee may use the work within the limits you agree together.

That makes a licence fundamentally different from an assignment. With an assignment you lose your rights. With a licence you keep hold of the reins.

What are licence rights?

Licence rights are the specific powers a licensee obtains. Exactly which rights those are depends entirely on what the parties agree. Examples of licence rights are:

The right to publish a photograph on a website.
The right to use music in a commercial.
The right to install software on a given number of devices.
The right to produce a format for a specific market.

Important: you obtain only the rights expressly set out in the agreement. Anything not in it is not permitted.

What is the difference between a licence and a user agreement?

Under a licence you ask permission to use a protected work. That can be a photograph, a piece of music, a text, anything falling under intellectual property. The licensor says: fine, you may use my work, on these terms.

A user agreement works differently. It governs how you may use a service or platform. Think of Netflix, Spotify, or the webshop where you have just ordered something. You accept their rules in order to be allowed to use the service.

Put briefly: a licence is about rights in a work. A user agreement is about the terms of a service.

Sometimes the two run together. With software, for instance. You then often get a software licence along with terms of use. The licence gives you the right to use the software, the terms determine what you may and may not do with it. Two sets of arrangements in one package.

Legal implications of a licence agreement

Another important subject in a licence agreement is the end of the agreement. May existing material still be used? Does the content have to come offline? And what if the parties have worked together in a particular way for years, outside the contractual arrangements? These are things to be well aware of.

Licence agreements in the creative sector

In the creative industry licences play a central role. Music, images, formats and texts are licensed constantly for use in other productions. Every form of creative work calls for specific arrangements. Below we discuss the most common situations.

Music licences: sync and mechanical rights

Do you want to use music in a film, commercial or podcast? Then you need a synchronisation licence (sync). This licence gives permission to combine music with moving images. You negotiate for it directly with the rightholder, often the music publisher or the artist themselves. Alongside that, the mechanical right comes into play when music is recorded or reproduced. With streaming services and physical releases these rights are arranged through Buma/Stemra.

The fee for a sync varies enormously. A well-known hit in an international commercial calls for a very different budget from an unknown track in a short online video. We help makers and producers alike with negotiating and drawing up these agreements.

For an artist or label, a licence agreement in the music industry works slightly differently. Read more about the licence deal in music.

TV formats and programme concepts

A successful TV format is valuable, but hard to protect. The format itself often falls outside copyright, but the worked-out elements such as scripts, graphic design and music are protected. On a sale or licence of a format you therefore make arrangements about the whole package: the name, the “bible” containing all the elements, guidance during production and quality control. This is done through a format licence agreement setting out clearly what the licensee may and may not change.

Images and stock photography

Buying in image rights looks straightforward, but it has pitfalls. With stock photographs you usually obtain a limited licence for specific use. Commercial use, adaptations or exclusivity cost extra. And watch out: the photographer holds the copyright, but where people are recognisable in the image, image rights come into play as well. Those rights have to be arranged separately. A stock licence often does not cover them.

Advantages and disadvantages of a licence agreement

A licence agreement brings clear advantages. For makers it means being able to generate income without giving up their copyright. And for users it offers certainty: as long as they keep to the arrangements, they may exploit the work lawfully.

At the same time the risk lies in unclear wording. Licences drawn too broadly can lead to loss of control. Vague arrangements about the fee or the term cause arguments later.

Where does it go wrong when drawing up a licence agreement?

In our practice we regularly see the same pitfalls recur:

The scope is described too vaguely. The licensee then claims to be allowed more than you intended. “Use for marketing purposes” sounds clear, but does that include billboards, TV commercials and social media? Without concrete delineation, argument follows.

The term is “until further notice” with no possibility of termination. Years later you want to end the licence, but the agreement offers no handle. The licensee stays put.

The fee is a one-off, while the work is exploited for years. What seemed reasonable at the time feels like a missed opportunity after three successful seasons or a viral campaign.

There are no arrangements about infringement by third parties. Someone uses your licensed work without permission. Who takes action? Who bears the costs? And who receives any damages? Where this is not regulated, delay arises at precisely the moment you want to act quickly.

The arrangements made do not match practice. Parties work together for years in a way that differs from what is on paper. Which then applies: the agreement or the situation that has grown up?

Having a licence agreement drawn up: why engage a lawyer?

A template from the internet gives you a starting point, but not a bespoke solution. The rights in a musical composition work differently from those in software or a photography collection. The interests of an illustrator starting out differ from those of an established production company.

A lawyer who works in the creative sector every day knows the market and knows which arrangements hold up. We not only draw up legally watertight agreements, we also think along commercially. What is a reasonable fee in your industry? Which forms of exploitation do you want to keep open? How do you avoid tying yourself into a deal that no longer fits three years from now?

So always take legal advice when drawing up a licence agreement. Are you in doubt about an existing agreement, or would you like a new one drawn up? We are happy to think along with you. That way you know where you stand, before things get difficult. We regularly advise and litigate on licences within copyright law, with particular attention to the creative, media and entertainment sectors.

A licence agreement lawyer: what do we do for you?

At Liaise Advocaten we work with licence agreements in the creative industry every day. Music, images, formats, software: we know the specific points to watch in each sector.

Drawing up a licence agreement

We draw up agreements that fit your situation. Whether you are entering into an exclusive sync licence for a documentary or a non-exclusive image licence for a campaign, we make sure the arrangements are clear and protect your interests.

Reviewing a licence agreement

You receive a proposal from the other side and want to know where you stand. We analyse the terms, identify risks and advise on points for negotiation. Provisions that appear standard often turn out to work against you.

Negotiating

Where the interests are substantial or the relationship is delicate, we negotiate on your behalf. We know what is customary in the market, but also where you can ask for more.

Resolving conflicts

An existing licence gives rise to argument. Sometimes a clear letter is enough. Where necessary we litigate to enforce your rights.

We work for individual makers, producers, publishers and businesses that buy in creative work. Whether you are on the licensing or the licensed side, we make sure the arrangements are right.

Practice area

Alexandra Iedema

Lawyer

Alexandra advises and litigates for clients in the cultural, music and creative sectors. She acts, among others, for artists, creative professionals, producers and entrepreneurs within these industries.

Jaap Versteeg

Lawyer

Jaap acts extensively for clients in the creative industries, including music, television/streaming/film, events, theatre, art and culture. He advises and litigates in the fields of intellectual property law, music law, unlawful publications, contract law and employment law.