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Put it in writing: copyright licences and implied terms

Posted: 15/01/2015

The courts are reluctant to imply terms into contracts
Written copyright licences avoid uncertainty and disputes

The recent case of Orvec International Limited v Linfoots Limited [2014] EWHC 1970 (IPEC) concerned the extent of rights granted by Linfoots to Orvec in respect of images on its website and in its advertising material. The case demonstrates the perils of not having a written copyright licence in place.

The background facts

Orvec sells textile products, such as blankets and pillows, to airlines for use by their passengers.

Orvec hired Linfoots, an advertising agency, to design and maintain its website and also to create advertising material for it. Linfoots made photographs of Orvec’s products and these appeared on Orvec’s website and in its advertising material.

As the author of the photographs, Linfoots was the first owner of copyright in them and it retained ownership of that copyright by virtue of an express term to that effect in its standard terms and conditions.

In 2011, the parties ended their business relationship. In the preceding discussions Linfoots had agreed that, for a small fee, it would supply Orvec with certain images from the photographs, for Orvec’s internal use and to supply to Orvec’s customers.

The products in the photographs were in some cases manufactured by Orvec; but in many instances by Intex Company Limited (Intex). The business relationship between Orvec and Intex ended in 2012. In the same year, two of Orvec’s employees left to join Intex, which then started to compete with Orvec. Intex subsequently asked Linfoots to supply photographs for use in its advertising.

Orvec’s claim

Orvec complained to Linfoots that the images on Intex's website included the photographs. Orvec claimed that they had been supplied by Linfoots in breach of contract, as its agreement with Linfoots contained an implied term granting it a perpetual and exclusive licence to the copyright in the photographs. Consequently Linfoots was not entitled to grant a licence to anyone else to use the photographs.

The law: implied terms

That argument raised the question of what, if any, terms should be implied into the agreement between Orvec and Linfoots. According to Lord Hoffmann in Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 10; [2009] 1 WLR 1988 (para 16) , “The court has no power to improve upon the [contract] ... It cannot introduce terms to make it fairer or more reasonable. It is concerned only to discover what the [contract] means. However, that meaning is not necessarily or always what the parties ... would have intended. It is the meaning which the [contract] would convey to a reasonable person having all the background knowledge which would reasonably be available.”

Lord Hoffmann also noted that the question of implication arises when the contract does not expressly provide for what is to happen when some event occurs and so the most usual inference is that nothing is to happen; as if the parties had intended something to happen, the contract would have said so. The courts will therefore be slow to imply a term unless the following, potentially overlapping conditions ( BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, paras 282–283), have been fulfilled:

it must be reasonable and equitable;
it must be necessary to give business efficacy to the contract. No term will be implied if the contract is effective without it;
it must be so obvious that 'it goes without saying';
it must be capable of clear expression;
it must not contradict any express term of the contract.

The judge in Orvec hesitantly added that the more complex the proposed implied term, the less likely it is that the reasonable person would take it to be implied.

Nothing was said in Linfoots' standard terms and conditions about a licence being granted to Orvec to use the photographs. However, the parties agreed that they must have contained an implied term that Orvec had a licence to use the photographs. The issue was whether that licence extended further than that.

Orvec’s argument rested on the fact that some of the photographs included its trade marks and/or the trade marks and logos of its airline clients. Orvec argued that Linfoots could not have any conceivable legitimate use for the photographs displaying its trade marks and so the licence granted to it to use those photographs must have been exclusive, worldwide and perpetual. As a result, Orvec contended, the licence to use all the other photographs (even those which did not display Orvec’s trade marks) must have been the same.

The judge agreed that where a designer creates certain work, such as a client’s logo, it must have been understood between the designer and the client that (a) no one other than the client could have a legitimate reason to copy the work and (b) the client would expect to be able to prevent others from copying it. The reasonable person would, therefore, conclude that it must have been intended that copyright in the logo would be transferred to the client and so a term in the agreement between the parties would be implied to that effect. Indeed that is what happened in the case of Griggs Group Ltd v Evans [2005] EWCA (Civ) 11 , which concerned the creation of one of the "Doc Martens" logos.

However, the judge held that it would not necessarily be the case where the work created is a photograph which included the client's logo or other trade mark - rather than the original logo or trade mark itself. Consideration (b) would be unlikely to arise because the client would be able to protect the original logo and trade mark by other means. Consideration (a) would potentially apply but only if the photograph was copied unaltered, without the trade mark having been removed.

The judge could see no reason for implying that exclusive rights were granted to the client if the work created is a photograph displaying a third party's trade mark - in this case the airlines’ trade marks. The right of the designer and others to reproduce and/or display the trade mark would, in those circumstances, depend on their relationship with the third party trade mark owner. Accordingly, there was no reason to infer that the parties must have intended that Orvec should have the right to prevent Linfoot copying the photographs or dealing in such copies, even where the trade mark was omitted from the copy.

The judge bore in mind that where alternative terms are possible, the choice between them must favour the least that is necessary in the circumstances; and concluded that a term should be implied that Linfoots granted Orvec a non-exclusive perpetual licence in the photographs.

The judge commented that only where Orvec’s trade mark appeared in the photograph could the licence possibly be exclusive. However, that raised questions of fact and degree about whether there were any contexts in which the trade mark could legitimately be copied, which introduced a more complex formulation, which in turn meant that the term was less likely to have been implied. In any event, it was not established that any photographs showing Orvec’s trade mark were supplied by Linfoots to Intex. Hence, Orvec’s claim failed.

Implications

A licence granted by a copyright owner does not have to be in writing to be effective or even have to have been discussed verbally. However, as this case shows, it clearly makes sense for copyright licences to be in writing. If not, there might not be any basis for an implied licence.

Even if a licence is implied, the nature of that licence may not be what one or both of the parties expected, which may give rise to a dispute.

If the court is asked to resolve the matter, the court will go no further than it needs to in implying a term. Where alternative terms are possible, the choice between them must favour the least that is necessary in the circumstances. In the context of a copyright licence, this will mean implying a bare licence; failing that, an exclusive licence may be implied and in unusual circumstances ( Griggs , for example), an assignment of the copyright may be implied.

In order to ensure that their copyright remains protected, copyright owners should enter into a written copyright licence from the outset. Certainty as to terms must be preferable for licensors and licensees alike, rather than the uncertainty of the court’s minimalist approach to implication.

Below are some of the key matters to consider when entering into a licence.

This article was published in New Law Journal in January 2015.

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Copyright Licensing and Assignment

(This may not be the same place you live)

What Is Copyright Licensing?

Copyright licensing is the transfer of one or more of a copyright owner’s exclusive rights from the owner to another person or entity so they can make use of them. These rights include the rights to reproduce the work, create derivative works, distribute the work to the public, publicly display visual works, and digitally transmit sound records.

Most often, the transfer of a right or rights is done either with an assignment or a license. With a license, the copyright owner retains their ownership of any right that is transferred. An assignment, on the other hand, transfers all exclusive rights and is comparable to a sale. The original copyright owner basically sells their rights to another person or entity who then essentially owns them.

When an owner assigns their rights to another, they give up the right to control how the rights are used. This is the same as selling any item of personal property; the seller cannot control how the buyer uses the item once it has been sold.

Generally, a license is the preferred type of transaction, if the original copyright holder wants to continue exercising their interests and control over their work. For example, if a person assigns their copyright in a song to a music producer, the decision about whether to allow a film producer to use the song in a film belongs to the producer and not to the original copyright holder.

This result can be avoided if the copyright owner transfers an interest or interests in a song by way of a licensing agreement. Then, the copyright owner retains the ability to license an interest or interests in the song to another entity, e.g., a film producer.

The assignment of a copyright is a form of property, i.e., intellectual property, that can be used like any other item of property that has value. For example, it could be used as security for a loan, bequeathed to heirs, or simply transferred for a price or other consideration .

Once rights have been assigned to another person or entity, the original owner has permanently transferred their right to control the copyrighted work. The original owner would be committing copyright infringement if they were to try to make use of any of the rights that they assigned.

If an original owner were to regret an assignment that they made, they would be able to try to buy back their copyright from the assignee. Then, it would be the choice of the assignee whether to sell their interest or not.

Under federal copyright law, a transfer of ownership is only valid if there is something in writing, e.g., a written assignment agreement, note, or memorandum of transfer, signed by the owner of the copyright or their agent.

The law does not require recording of an assignment with the U.S. Copyright Office, but there are advantages to doing it. For example, it creates a public record of the exact details of the transfer and gives notice to members of the public. It can set the priority of rights if there have been conflicting transfers of ownership. It can validate the transfer of the copyright to one person or entity against another.

What Happens if I Transfer My Exclusive Rights to Another Person?

Can i license the same right to more than one person, how do i transfer my rights to another person, what is a copyright assignment, should i record the transfer of copyright ownership, are transfers permanent, do i need a lawyer to license my copyright.

If the owner of a copyright licenses one or more of their exclusive rights to only one other person or entity with no intention of granting the same right to any other person or entity, the person has granted them an exclusive license.

An exclusive license gives its owner the right to exclude all others, including the original copyright owner, from exercising the rights granted in the license. A copyright owner may choose to grant an exclusive license for several reasons, including:

Profiting from their copyright: The licensee may pay the copyright owner for the exclusive use of one or more of their rights;
Publicity: For example, the author of a book might authorize a movie studio to produce a movie based on the book in order to draw increased publicity to the author and the book. Of course, it could prove to be highly profitable as well.

A person can license the same right to more than one person as long as they make each and every licensee aware of the fact that they are not getting an exclusive license but rather a nonexclusive one. Presumably, a copyright owner could grant an exclusive license for a larger fee than a non-exclusive one.

If a copyright owner wants to transfer one or more of their rights to another person exclusively, they must put the transfer in writing and sign it. However, the creation of a nonexclusive license requires no written document. In fact, nonexclusive licenses can even be implied if the conduct of the parties indicates licensing.

As noted above, a copyright assignment can be described as a kind of exclusive license in which a copyright owner transfers all of his exclusive rights to another person. Like an exclusive license, a copyright assignment must be in writing.

Recordation of a copyright interest with the U.S. Copyright Office is not required to make it valid, but, again, it is a good idea, especially from the perspective of the person who acquires the interest. By recording the license or assignment, they can protect their rights in the event that the copyright owner licenses to someone else. If a person is the first to receive a license, promptly recording the license can protect them from losing their rights to a competing licensee in the future.

If a copyright owner has placed no time restrictions on a license, the transfer of rights is considered to be permanent for a period of 35 years. At that point, the original copyright owner has a 5-year window in which to exercise their right to terminate any licenses or assignments. If the original copyright owner chooses to end a license at this point, the licensee has to give up all the rights granted in the license.

Of course, a copyright owner can grant a license for a specified period of time. They would have to draft a licensing agreement, perhaps with the help of an intellectual property lawyer, that grants the exact rights the owner wants to grant for a desired period of time with any other conditions and restrictions that they want to place on the grant.

The licensing of a copyright can be complex. LegalMatch.com can connect you to an experienced copyright attorney who can draft a licensing agreement for your copyright that provides you with the interest you want and protects it from the claims of others.

Or, if you are involved in a dispute about an existing license, your lawyer can help you resolve it. A copyright attorney can draft an assignment agreement or other form of assignment as well.

Your lawyer can negotiate a resolution or represent you in court if that should become necessary.

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Assignment of Copyright – Explained With Modes and Disputes

Original work may not be reproduced, distributed, or sold by anybody other than the copyright owner without that owner’s consent. As a result, the law allows the copyright owner to assign ownership to a third party.

The term “copyright assignment” describes the transfer of ownership or rights in a work that has been granted copyright from the original copyright holder (the “ assignor “) to a different party (the “ assignee “). Through a legal procedure, the assignor gives up their ownership of the work and gives the assignee the only authority to reproduce, distribute, display, perform, or alter it.

This article discusses the concept of copyright assignment, which involves the transfer of ownership or rights in a copyrighted work from the original copyright holder (assignor) to another party (assignee). The article also explains the various aspects of copyright assignment, including its mode of assignment and disputes with respect to the assignment of copyright.

Assignment of Copyright

(Section 18 of the Copyright Act, 1957 )

The owner of the current work or the potential owner of the future work may assign the copyright. It may be fully or partially allocated. Limitations may apply to all or a portion of the copyright.

Additionally, if future work is assigned, the assignment will become effective when the new work is created. In future works, “assignee” includes the assignee’s legal representative if they die before the work is created.

The court ruled in Saregama India Ltd. vs Suresh Jindal And Ors. that the copyright owner to a future work has the right to assign the copyright, in whole or in part, to a third party. This indicates that the owner may assign the copyright ownership for the entire term or only a portion.

The assignee is regarded as the legal owner of the copyright after the assignment is made, and the Copyright Act recognises all associated rights and benefits. As mentioned above, the ruling affirms that copyright ownership can be transferred by assignment, enabling people or organisations to obtain and exercise control over the rights connected to the copyrighted work.

Mode of Assignment of Copyright

(Section 19 of the Copyright Act, 1957)

Every assignment of the copyright to a work must be made in writing and be signed by the assignor or an authorised representative. Only that assignment will be accepted. Any assigned work must include all relevant information, including the assignment, length, rights, and geographic scope.

The amount of any royalties or other payments made to the author or his legal heirs during the assignment should also be specified. Any revisions, extensions, or terminations of the assignment are subject to the mutually agreed-upon terms and circumstances.

Let’s say the assignee fails to utilise the right granted during the assignment within a year of receiving it. If such a thing occurs, the assignment of those rights will be presumed to have terminated unless otherwise specified in the assignment. When the assignment time and geographical scope are not specified, they will be assumed to be five years from the date of the assignment and inside India, respectively.

The Bombay High Court considered whether the assignment of video rights included the right of satellite transmission in the case of Video Master vs Nishi Production . The court accepted the defendant’s claim that several public communication channels, such as satellite broadcasting, video TV, and terrestrial television broadcasting, each constituted a distinct copyright.

As a result, the film’s owner may transfer these rights to other people or companies. The court concluded that the video copyright granted to the plaintiff was separate from the copyright for the satellite transmission of the movie. Consequently, the satellite broadcast right was not part of the assignment.

Disputes With Respect to the Assignment of Copyright

(Section 19A of the Copyright Act, 1957)

After receiving a complaint from the assignor and completing an investigation, the appellate board has the authority to revoke the assignment or issue any orders it sees suitable when the assignee fails to execute the powers granted to him if such failure is not a result of any action or inaction on the part of the assignor.

If the assignor is also the author, the appellate board should hold off on issuing any revocation unless it is established that the terms of the assignment are harsh to the assignor. Additionally, no revocation may be made for five years if an assignment has been made.

The appellate board should handle copyright assignment complaints promptly and with diligence. They have a time limit of six months from the date of receiving the complaint to reach a final decision. If, for any reason, there is a delay beyond this period, the appellate board must explain the reasons for the delay. The goal is to ensure that copyright disputes are resolved promptly and transparently.

In this evolving world, copyright assignment is an unavoidable need. People are not always able to rely on themselves. The ownership of the work must be transferred to properly frame the art and realise the original piece’s full creative potential.

Furthermore, copyright assignment aids in the seamless development of the creative process when several creative minds collaborate or when a work is adapted across various media. It allows for fresh viewpoints, interpretations, and variations that could improve the original work or investigate other creative paths.

Read Next: Doctrine of Merger Under Copyright Law

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Law Study Material

Understanding an assignment of copyright agreement

Did you know you can assign, or transfer, your copyright to someone? Find out what information to include in your agreement and how you can make sure your interests are protected.

Find out more about business management

by Ronna L. DeLoe, Esq.

Ronna L. DeLoe is a freelance writer and a published author who has written hundreds of legal articles. She does...

Assignment of copyright

When you create intellectual property such as a book, poem, song, photograph, or painting, copyright laws give you the right to claim ownership of your creative work. Registering your copyright with the U.S. Copyright Office allows others to find out who owns the rights to your creation. As a copyright owner, you can also transfer, or assign, your copyright, as long as you follow the correct procedure.

Woman with short brown hair in art studio leans across desk with art supplies and camera on it to type on laptop

Copyright assignment permits a third party, known as the assignee, to take ownership of the copyright from the owner, or assignor. The assignment must be done in writing to be valid. Although notarization isn't required, it's a good idea to have someone witness the assignor and assignee signing and dating the agreement. Transfer of ownership usually involves monetary exchange, although that's not a requirement.

Registering a copyright with the U.S. Copyright Office isn't a requirement for valid ownership, even in cases of copyright assignment. However, registering provides a way for third parties to discern who owns the copyright. Because you don't have to file the transfer, a short-form assignment contract is sufficient for filing. This document usually contains only limited details of the work you're assigning, including the copyright number (if applicable), the signatures of both parties, the signature of a witness if desired, and the date of the assignment.

Just like in any other contract, a copyright assignment should contain certain information , such as the amount of consideration, or money, being exchanged. When assigning your copyright, the other party should provide some amount of consideration. Contracts usually include the language “for other good and valuable consideration," and courts have held that even one dollar is acceptable. As long as each party to the contract is getting something in return and the contract is not made under duress or pressure, the contract is valid.

Likewise, as the owner of the copyright, you have the right to assign all or part of it. If you assign your entire copyright to the other party, you are giving up all of your rights to your own copyright. In the case of a book, for example, assigning only part of your copyright could mean:

Assigning it to one party for use as a movie and to another for use as a television show
Assigning one party the original version and another party a translated version
Assigning rights to different types of books, such as an audiobook, a traditional print book, and an e-book
A partial assignment for a limited duration, if you specify such in your agreement

Copyright laws protect you in case your work of intellectual property becomes famous or is worth money later on. While you can't get your copyright back for many years after your assignment unless the new owner consents otherwise, current copyright law allows you to terminate your copyright assignment after 35 years.

For example, songwriters who assigned their copyright to what are now legendary songs from the 1960s or 1970s can now recover the copyright to their songs, many of which have increased in value due to their use in commercials and television shows. The writer of "YMCA," a member of the Village People, successfully recovered his copyright by invoking his termination rights after the 35-year period.

If you're a freelancer who creates a work such as a poetry collection, you own the copyright of the poetry book and can assign the copyright, if you wish. If, however, you're employed by someone to write poems, either as an employee or as an independent contractor under their direction, your creation is sometimes called a work for hire .

Creation of intellectual property under a work-for-hire contract means that you don't own the copyright. Instead, whoever hired you owns it, and unless that person gives you permission to purchase or own the copyright, you cannot transfer it to anyone else.

The more control a client has over how and when you're creating the intellectual property, the more likely you're regarded as an employee rather than an independent contractor. An employer-employee relationship generally assures that the employer owns the copyright. If, on the other hand, you're an independent contractor and have more creative control over your project than an employee would have, then you're the copyright owner.

Because intellectual property is an extremely specialized area of the law, it's recommended that you use a copyright attorney or similar intellectual property specialist to assist in any assignments. You can start protecting your creative interests by registering your copyright .

Published By Stanford Copyright and Fair Use Center

Chapter 2. copyright ownership and transfer.

201. Ownership of copyright
202. Ownership of copyright as distinct from ownership of material object
203. Termination of transfers and licenses granted by the author
204. Execution of transfers of copyright ownership
205. Recordation of transfers and other documents

§ 201. Ownership of copyright 1

(a) Initial Ownership. — Copyright in a work protected under this title vests initially in the author or authors of the work. The authors of a joint work are coowner of copyright in the work.

(b) Works Made for Hire. — In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.

(c) Contributions to Collective Works. — Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.

(d) Transfer of Ownership. —

(1) The ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law, and may be bequeathed by will or pass as personal property by the applicable laws of intestate succession.

(2) Any of the exclusive rights comprised in a copyright, including any subdivision of any of the rights specified by section 106, may be transferred as provided by clause (1) and owned separately. The owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner by this title.

(e) Involuntary Transfer. — When an individual author’s ownership of a copyright, or of any of the exclusive rights under a copyright, has not previously been transferred voluntarily by that individual author, no action by any governmental body or other official or organization purporting to seize, expropriate, transfer, or exercise rights of ownership with respect to the copyright, or any of the exclusive rights under a copyright, shall be given effect under this title, except as provided under title 11. 2

§ 202. Ownership of copyright as distinct from ownership of material object

Ownership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied. Transfer of ownership of any material object, including the copy or phonorecord in which the work is first fixed, does not of itself convey any rights in the copyrighted work embodied in the object; nor, in the absence of an agreement, does transfer of ownership of a copyright or of any exclusive rights under a copyright convey property rights in any material object.

§ 203. Termination of transfers and licenses granted by the author 3

(a) Conditions for Termination. — In the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination under the following conditions:

(1) In the case of a grant executed by one author, termination of the grant may be effected by that author or, if the author is dead, by the person or persons who, under clause (2) of this subsection, own and are entitled to exercise a total of more than one-half of that author’s termination interest. In the case of a grant executed by two or more authors of a joint work, termination of the grant may be effected by a majority of the authors who executed it; if any of such authors is dead, the termination interest of any such author may be exercised as a unit by the person or persons who, under clause (2) of this subsection, own and are entitled to exercise a total of more than one-half of that author’s interest.

(2) Where an author is dead, his or her termination interest is owned, and may be exercised, as follows:

(A) The widow or widower owns the author’s entire termination interest unless there are any surviving children or grandchildren of the author, in which case the widow or widower owns one-half of the author’s interest.

(B) The author’s surviving children, and the surviving children of any dead child of the author, own the author’s entire termination interest unless there is a widow or widower, in which case the ownership of one-half of the author’s interest is divided among them.

(C) The rights of the author’s children and grandchildren are in all cases divided among them and exercised on a per stirpes basis according to the number of such author’s children represented; the share of the children of a dead child in a termination interest can be exercised only by the action of a majority of them.

(D) In the event that the author’s widow or widower, children, and grandchildren are not living, the author’s executor, administrator, personal representative, or trustee shall own the author’s entire termination interest.

(3) Termination of the grant may be effected at any time during a period of five years beginning at the end of thirty-five years from the date of execution of the grant; or, if the grant covers the right of publication of the work, the period begins at the end of thirty-five years from the date of publication of the work under the grant or at the end of forty years from the date of execution of the grant, whichever term ends earlier.

(4) The termination shall be effected by serving an advance notice in writing, signed by the number and proportion of owners of termination interests required under clauses (1) and (2) of this subsection, or by their duly authorized agents, upon the grantee or the grantee’s successor in title.

(A) The notice shall state the effective date of the termination, which shall fall within the five-year period specified by clause (3) of this subsection, and the notice shall be served not less than two or more than ten years before that date. A copy of the notice shall be recorded in the Copyright Office before the effective date of termination, as a condition to its taking effect.

(B) The notice shall comply, in form, content, and manner of service, with requirements that the Register of Copyrights shall prescribe by regulation.

(5) Termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.

(b) Effect of Termination. — Upon the effective date of termination, all rights under this title that were covered by the terminated grants revert to the author, authors, and other persons owning termination interests under clauses (1) and (2) of subsection (a), including those owners who did not join in signing the notice of termination under clause (4) of subsection (a), but with the following limitations:

(1) A derivative work prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination, but this privilege does not extend to the preparation after the termination of other derivative works based upon the copyrighted work covered by the terminated grant.

(2) The future rights that will revert upon termination of the grant become vested on the date the notice of termination has been served as provided by clause (4) of subsection (a). The rights vest in the author, authors, and other persons named in, and in the proportionate shares provided by, clauses (1) and (2) of subsection (a).

(3) Subject to the provisions of clause (4) of this subsection, a further grant, or agreement to make a further grant, of any right covered by a terminated grant is valid only if it is signed by the same number and proportion of the owners, in whom the right has vested under clause (2) of this subsection, as are required to terminate the grant under clauses (1) and (2) of subsection (a). Such further grant or agreement is effective with respect to all of the persons in whom the right it covers has vested under clause (2) of this subsection, including those who did not join in signing it. If any person dies after rights under a terminated grant have vested in him or her, that person’s legal representatives, legatees, or heirs at law represent him or her for purposes of this clause.

(4) A further grant, or agreement to make a further grant, of any right covered by a terminated grant is valid only if it is made after the effective date of the termination. As an exception, however, an agreement for such a further grant may be made between the persons provided by clause (3) of this subsection and the original grantee or such grantee’s successor in title, after the notice of termination has been served as provided by clause (4) of subsection (a).

(5) Termination of a grant under this section affects only those rights covered by the grants that arise under this title, and in no way affects rights arising under any other Federal, State, or foreign laws.

(6) Unless and until termination is effected under this section, the grant, if it does not provide otherwise, continues in effect for the term of copyright provided by this title.

§ 204. Execution of transfers of copyright ownership

(a) A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent.

(b) A certificate of acknowledgment is not required for the validity of a transfer, but is prima facie evidence of the execution of the transfer if —

(1) in the case of a transfer executed in the United States, the certificate is issued by a person authorized to administer oaths within the United States; or

(2) in the case of a transfer executed in a foreign country, the certificate is issued by a diplomatic or consular officer of the United States, or by a person authorized to administer oaths whose authority is proved by a certificate of such an officer.

§ 205. Recordation of transfers and other documents 4

(a) Conditions for Recordation. — Any transfer of copyright ownership or other document pertaining to a copyright may be recorded in the Copyright Office if the document filed for recordation bears the actual signature of the person who executed it, or if it is accompanied by a sworn or official certification that it is a true copy of the original, signed document.

(b) Certificate of Recordation. — The Register of Copyrights shall, upon receipt of a document as provided by subsection (a) and of the fee provided by section 708, record the document and return it with a certificate of recordation.

(c) Recordation as Constructive Notice. — Recordation of a document in the Copyright Office gives all persons constructive notice of the facts stated in the recorded document, but only if —

(1) the document, or material attached to it, specifically identifies the work to which it pertains so that, after the document is indexed by the Register of Copyrights, it would be revealed by a reasonable search under the title or registration number of the work; and

(2) registration has been made for the work.

(d) Priority between Conflicting Transfers. — As between two conflicting transfers, the one executed first prevails if it is recorded, in the manner required to give constructive notice under subsection (c), within one month after its execution in the United States or within two months after its execution outside the United States, or at any time before recordation in such manner of the later transfer. Otherwise the later transfer prevails if recorded first in such manner, and if taken in good faith, for valuable consideration or on the basis of a binding promise to pay royalties, and without notice of the earlier transfer.

(e) Priority between Conflicting Transfer of Ownership and Nonexclusive License. — A nonexclusive license, whether recorded or not, prevails over a conflicting transfer of copyright ownership if the license is evidenced by a written instrument signed by the owner of the rights licensed or such owner’s duly authorized agent, and if

(1) the license was taken before execution of the transfer; or

(2) the license was taken in good faith before recordation of the transfer and without notice of it.

Chapter 2 Endnotes

1 In 1978, section 201(e) was amended by deleting the period at the end and adding “, except as provided under title 11.”

2 Title 11 of the United States Code is entitled “Bankruptcy.”

3 In 1998, the Sonny Bono Copyright Term Extension Act amended section 203 by deleting “by his widow or her widower and his or her grandchildren” from the first sentence in paragraph (2) of subsection (a) and by adding subparagraph (D) to paragraph (2). Pub. L. No. 105-298, 112 Stat. 2827, 2829.

4 The Berne Convention Implementation Act of 1988 amended section 205 by deleting subsection (d) and redesignating subsections (e) and (f) as subsections (d) and (e), respectively. Pub. L. No. 100-568, 102 Stat. 2853, 2857.

Understanding the Key Elements of a Copyright Assignment Agreements

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Introduction

For creators and owners of intellectual property, copyright assignment agreements are a crucial tool for protecting their interests. These agreements allow the original creator to transfer ownership of copyright to a new owner while receiving appropriate compensation or maintaining certain rights. If not properly crafted and registered, this can lead to legal disputes, financial losses and other serious consequences.

The Genie AI team has experience in drafting these agreements to ensure that the original creator is compensated fairly and retains any rights they wish. This is done by including such elements as a lump sum payment, royalties or license back clause which allows the original creator to continue using their work for certain purposes only. It is also important that both parties understand the obligations that come with signing such an agreement in order to avoid any misinterpretations which could lead to future complications.

When it comes to international copyright protection, it’s essential that these agreements are legally registered with the relevant authorities. This guarantees that both parties are held accountable if they breach any of the outlined terms and conditions, allowing any potential disputes or miscommunications between them in future. Additionally, proper registration means that all stakeholders have a clear understanding of who owns what right - ensuring everyone can benefit from the expected outcomes of this agreement accordingly.

At Genie AI we understand how important it is for creators and owners of intellectual property to protect their rights - which is why we offer free templates from our open source legal template library as well as step-by-step guidance on how best to complete your own copyright assignment agreement correctly and confidently from start-to-finish . With millions of datapoints teaching us what market-standard looks like for each document type - you don’t need an account with us or even have to pay a lawyer – just read on below for more information on accessing our library today!

Definitions (feel free to skip)

Copyright: The exclusive legal right to reproduce, publish, or sell an original work of authorship, such as a book, film, or song.

Transferring: Moving ownership of something from one party to another.

Assigning: Granting permission to use or access something that belongs to another party.

Work Made for Hire: A work that is specially commissioned by an employer or client and is considered to be owned by them.

Consideration: The amount of money or other form of compensation that is paid in exchange for something.

Infringement: An unauthorized use or violation of another’s intellectual property rights.

Misattribution: The incorrect attribution of a work to its creator.

Execution: The signing and witnessing of a document by the parties involved in order to make it legally binding.

Discuss the purpose of a copyright assignment agreement

Explain why copyright assignments are important, describe the benefits of assigning copyright, explain the differences between transferring and assigning copyright, outline the key distinctions between the two, outline the key terms in a copyright assignment agreement, explain the concept of the “work made for hire”, describe the rights the assignee will receive, explain the duration of the copyright, outline the rights retained by the assignor, describe the potential risks involved in a copyright assignment, explain the risks of infringement, describe the risks of misattribution, explain the potential financial risks, explain the requirements for a valid copyright assignment agreement, outline the necessary elements, explain the need for consideration, describe the requirements for execution, provide best practices for the drafting and execution of a copyright assignment agreement, explain the importance of clarity, describe the importance of precision, outline the importance of accuracy, explain the importance of review and due diligence, offer suggestions for alternatives to a copyright assignment agreement, explain the concept of a licensing agreement, describe the concept of a work-for-hire agreement, explain the concept of an “implied license”, outline the concept of a co-ownership agreement, get started.

Understand what a copyright assignment agreement is
Learn the purpose of a copyright assignment agreement
Identify the benefits of a copyright assignment agreement

When you can check this off your list and move on to the next step:

When you have a good understanding of the purpose of a copyright assignment agreement
When you understand the benefits of a copyright assignment agreement
Understand why copyright assignments are important in protecting a creator’s rights to their work
Understand that copyright assignments are used to transfer all or part of a creator’s rights of ownership to another party, such as a publisher, production company, or record label
Understand that copyright assignments are legally binding and enforceable
Understand that copyright assignments provide the assignee with exclusive rights to the work, such as the right to reproduce, distribute, modify, and perform it
Understand that without a copyright assignment, the original creator is the only one who has the right to use their work in any way
Understand that copyright assignments guarantee that the assignee will be paid for their use of the work
When you can explain why copyright assignments are important, you can move on to the next step.
A copyright assignment agreement allows the assignee to obtain exclusive rights to the work, including the right to reproduce, distribute, and adapt the work.
An assignment of copyright also allows the assignee to obtain the right to receive royalties for the work, as well as the right to license the work to third parties.
Copyright assignments can help ensure that the author is compensated for their work and that their rights are protected.
With a copyright assignment, authors can also be sure that their work is not used without their permission or for any unauthorized purpose.

Once you have described the benefits of assigning copyright, you can check this step off your list and move on to the next step.

Transferring copyright involves giving up all rights to the copyrighted material and transferring them to another party.
Assigning copyright involves transferring some or all of the rights to the copyrighted material to another party.
Transferring copyright is often permanent, while assigning copyright may be temporary.
Transferring copyright requires the original owner to give up all rights to the material, while assigning copyright allows the original owner to retain some rights.
When you have a clear understanding of the differences between transferring and assigning copyright.
Transferring copyright means the originator of the work keeps all rights to the work, but allows another party to use the work under certain conditions
Assigning copyright means the originator of the work transfers all rights to the work to another party, and no longer retains any rights to the work
Transferring copyright is less permanent than assigning copyright, since the originator has the option of terminating the agreement and reclaiming the rights to their work
Assigning copyright is more permanent and involves the originator giving up all rights to their work in exchange for a specified payment

Once you understand the differences between transferring and assigning copyright, you can move on to outlining the key terms in a copyright assignment agreement.

• Understand the definition of a “copyright assignment agreement.” A copyright assignment agreement is a legally binding contract in which the copyright owner of a work transfers the rights and ownership of the work to another party. • Learn about exclusive vs. non-exclusive assignments. An exclusive assignment is when the copyright owner transfers all rights to the work to the other party. A non-exclusive assignment is when the copyright owner transfers some rights to the work to the other party. • Identify the rights granted in the agreement. These rights can include reproduction, distribution, modification, and public display of the work, as well as the rights to create derivative works based on the original. • Understand the term of the agreement. This is typically the period of time for which the rights are being assigned. • Learn about the payment terms. This is the amount of money that is being paid for the assignment of the copyright. • Make sure to include a warranty and indemnification clause. This clause states that the copyright owner is warranting that they have the right to transfer the rights in the work and that they will indemnify the other party if they are sued for infringement of copyright due to the assignment. • Know that any document that transfers copyright must be in writing and signed by both parties.

When you have read and understood the above points, you can check this off your list and move on to the next step.

Understand what a “work made for hire” is and its implications for copyright assignment agreements
Learn when a “work made for hire” applies to a copyright assignment agreement
Familiarize yourself with the different types of works that can qualify as a “work made for hire”
Understand how authorship is determined in a “work made for hire”

Once you understand the concept of the “work made for hire” and its implications for copyright assignment agreements, you can move on to the next step of describing the rights the assignee will receive.

Understand the scope of the rights being transferred - what types of uses are being authorized by the transfer?
Determine if the assignee is receiving exclusive or non-exclusive rights
Identify whether the assignee has the right to sublicense or transfer the rights to another
Determine if the assignee has the right to modify or make derivative works of the copyrighted content

Once you have a clear understanding of the rights the assignee will receive, you can move on to the next step, which is to explain the duration of the copyright.

Understand what duration of the copyright means - Duration of the copyright is the length of time that the copyright will be assigned to the assignee. It’s important to understand the duration of the copyright as it determines how long the assignee will be able to exercise the rights granted to them.
Read the copyright assignment agreement to determine the duration - When reading the copyright assignment agreement, look for any language that specifies the duration of the copyright. This may include the length of time the rights are being assigned for, the date the agreement begins and ends, or other references to the duration of the copyright.
Make sure the agreement clearly specifies the duration of the copyright - Make sure that the agreement clearly states the duration of the copyright as this will help to avoid any confusion or misunderstandings between the assignor and assignee.
Check off this step when you’ve read the agreement and understand the duration of the copyright - Once you have read the agreement and understand the duration of the copyright, you can check this step off your list and move on to the next step, which is outlining the rights retained by the assignor.
Research the rights reserved by the assignor by reading the Copyright Assignment Agreement
Note the rights retained by the assignor, such as the right to use the copyright material for personal use, the right to modify the copyright material, and the right to use the copyright material in future works
Check that the Copyright Assignment Agreement does not give the assignee exclusive rights to the copyright material
Make sure the assignor has preserved the right to be credited for their work
Ensure the assignee does not have the right to transfer the copyright to another person or entity
When you have outlined the rights retained by the assignor, you can move on to the next step.
Understand the potential risks if the assignor fails to follow the terms of the copyright assignment agreement
Be aware of the possibility of copyright infringement if the assignor does not have the right to transfer the copyright
Consider the legal risks if the assignor does not get the permission of any other parties who may have rights to the copyright
Recognize the potential for damages if the copyright assignment agreement is breached
Understand that copyright assignments are a form of contract and can be enforced in court

Once you have a complete understanding of the potential risks involved in a copyright assignment agreement, you can move on to the next step.

Understand the difference between copyright infringement and misattribution of a copyrighted work
Know the legal consequences of infringement, including the potential for liability and damages
Understand the different types of infringement and the legal consequences of each
Learn about the potential remedies for copyright infringement, such as injunctions and damages
Be aware of the potential risks associated with the unauthorized use of another’s copyrighted work
Know how to identify infringing works and how to protect yourself from potential infringement claims
Be aware of the relevant copyright laws and related regulations in your jurisdiction

Once you have a solid understanding of the risks of infringement, you can move on to the next step of describing the risks of misattribution.

Understand the importance of accurately attributing authorship or ownership of works
Learn the risks of misattribution, such as potential reputational damage and legal liability
Identify potential scenarios where misattribution could take place, such as when two or more parties are involved in the creation of a work
Read through copyright assignment agreements thoroughly to ensure that all authors or owners are accurately attributed
Ensure that the proper names, contact information, and other important details are included in the agreement

Once you have reviewed the risks of misattribution, you can check this off your list and move on to the next step: Explaining the potential financial risks.

Understand how assigning a copyright could negatively affect the creator’s income.
Research how the creator will be compensated for their work.
Determine if the creator will receive royalties for future income or will be paid a one-time fee.
Consider the potential legal costs associated with copyright infringement.
Identify any other financial risks that could arise from the copyright assignment agreement.

Once you have a comprehensive understanding of the financial risks associated with a copyright assignment agreement, you can move on to the next step.

A valid copyright assignment agreement must be in writing and signed by both parties
It must include the title of the work being assigned, the date the assignment is effective, and the names of the assignor and assignee
The agreement must clearly state the assignor’s intent to transfer the copyright to the assignee
The agreement must include language that grants the assignee exclusive rights to use, reproduce, and distribute the work
The agreement should also include language that requires the assignee to provide proper attribution to the assignor

Once you have these elements outlined in the agreement, you can check this step off your list and move on to the next step.

Identify the parties involved, including the assignor and assignee
Specify what is being assigned, typically the copyright or copyright ownership
Include a description of the work, such as its title or specific details
Establish a timeline, including when the agreement begins and ends
Include a clause that states the assignor has full rights to the work and is authorized to make the assignment
Explain the need for consideration and how it is to be paid
Include a termination clause that outlines how the agreement can be ended
Specify the governing law for the agreement
Signatures of both parties, with a witness if necessary

You will know that you can check this step off your list and move on to the next step when you have identified and outlined all the necessary elements of a copyright assignment agreement.

Understand why a consideration is required in a copyright assignment agreement
Consideration is an exchange of value in a contract, which is necessary to make the contract enforceable
It is important to identify what is being exchanged between the parties and document it in the agreement
Consideration can be monetary (e.g. an upfront payment) or non-monetary (e.g. the promise to render a service)
When drafting a copyright assignment agreement, ensure that the consideration is adequately expressed in the agreement
Once the need for consideration is established and its form is expressed in the agreement, you can move on to the next step of outlining the necessary elements of a copyright assignment agreement.
Understand the requirements for a valid execution of a copyright assignment agreement
Identify the parties involved: the assignor and the assignee
Ensure that the assignor has the legal authority to transfer the copyright and that there is sufficient consideration for the transfer
Confirm that the agreement is in writing and signed by the assignor
Make sure that the agreement clearly states the copyright being assigned, the date of the assignment, and the duration of the assignment
Verify that the assignor acknowledges the transfer of copyright in the agreement
When all the requirements are met, you can feel confident that the copyright assignment agreement is valid and the transfer of rights has been secured.
Refer to the Copyright Act and any state specific laws that may apply.
Include a statement confirming the transfer of the copyright ownership.
Ensure the parties involved are clearly identified.
Make sure the agreement is in writing or is evidenced in writing.
Specify the scope of the assignment and its duration/term.
Include a warranty that the party transferring the copyright owns the copyright or has the authority to transfer it.
Include a non-compete clause, if applicable.
Make sure there is a dispute resolution clause.

Once all of these best practices have been implemented, you can check off this step and move on to the next.

Understand why clarity is essential when drafting a copyright assignment agreement
Make sure that all the terms of the agreement are clear and unambiguous
Identify the parties to the agreement and the works to be assigned
Establish the scope of rights being transferred and the payment for the assignment
Determine the jurisdiction and governing law of the assignment agreement
Outline the term of the agreement and the termination and/or renewal provisions
When all the terms of the agreement are clear, you can move on to the next step in the guide: Describe the importance of precision.
Precision is essential when drafting a copyright assignment agreement.
If there are any vague or ambiguous terms in the agreement, it could lead to costly disputes or misunderstandings over what rights are being assigned.
Review the agreement carefully to ensure that the scope of rights being assigned is clearly stated and that there is no room for misinterpretation.
Make sure that the language is specific and that each element of the agreement is clearly stated.
Once you are confident that the agreement is precise and unambiguous, you can check this step off your list and move on to the next step.
Understand the importance of accuracy in a copyright assignment agreement to ensure that rights are correctly transferred and not lost
Identify any potential inaccuracies in the agreement, such as incorrect names or dates, and ensure these are corrected before signing
Check that the agreement accurately and precisely outlines the rights assigned and that they match the expectations of the parties involved
Review and analyze the agreement to confirm that all relevant details are included, such as the scope of the assignment, the applicable duration, and applicable jurisdictions
Ensure the agreement is correctly worded and that any ambiguities are avoided to ensure the parties have a clear understanding of their obligations and rights
Once you have checked for accuracy and ensured any discrepancies are corrected, you can then move on to the next step.
Understand the importance of review and due diligence when drafting a copyright assignment agreement
Ensure that the agreement is clear and accurate in order to avoid any potential disputes
Identify any potential risks that may arise as a result of the agreement
Take the necessary steps to mitigate these risks and ensure the agreement provides adequate protection to both parties
Have a qualified legal professional review the agreement before signing to ensure all terms are legally binding
When you have finished reviewing the agreement and conducted the necessary due diligence, you can check this step off your list and move on to the next step.
Explain the concept of a license agreement, in which the copyright owner grants the licensee a set of rights to use the copyrighted material.
Research different types of licenses that could be used to grant specific rights to the licensee, such as exclusive licenses, nonexclusive licenses and statutory licenses.
Consider potential benefits of using a license agreement instead of a copyright assignment agreement, such as the ability for the copyright owner to retain some of the rights to the work and the potential for the licensee to obtain the rights to use the work without making a large monetary payment.
Contact a lawyer for more information on the legal implications of using a license agreement instead of a copyright assignment agreement.
Understand what a licensing agreement is: a contractual agreement between the copyright holder (the licensor) and a third party (the licensee) that allows the licensee to use the copyrighted material in exchange for payment or other consideration.
Research the types of licensing agreements available, such as exclusive and non-exclusive agreements, as well as the differences between them.
Consider the specific rights that the licensee will be granted and the limitations of those rights.
Review any other terms of the agreement, such as the duration of the agreement, the royalties that the licensor will receive from the licensee, any obligations of the licensee, and any restrictions on use or modification of the copyrighted material.
Understand the implications of breaching the licensing agreement.

You’ll know you can move on to the next step when you have a clear understanding of the concept of a licensing agreement, the types of licensing agreements, and the terms and implications of such an agreement.

Understand what a work-for-hire agreement is: It is a contract between two parties in which one party (the “Hirer”) assigns the copyright of a work to the other party (the “Hired Party”) in exchange for a fee or other consideration.
Determine what types of works are eligible for a work-for-hire agreement: Generally, the work must be specially commissioned and fall within certain categories of works, such as a contribution to a collective work, a translation, a supplementary work, a compilation, an instructional text, a test, answer material for a test, or an atlas.
Identify the rights that the Hirer will have under a work-for-hire agreement: These rights typically include the exclusive right to use, reproduce, distribute, and create derivative works from the copyrighted work.
Be aware of the key differences between a work-for-hire agreement and a licensing agreement: In a licensing agreement, the Hirer does not own the copyright but instead is merely granted a license to use the copyrighted work for a limited time and under certain conditions.

You will know you can check this off your list and move on to the next step once you have a general understanding of what a work-for-hire agreement is, the types of works that can be the subject of a work-for-hire agreement, the rights that the Hirer will have under a work-for-hire agreement, and the key differences between a work-for-hire agreement and a licensing agreement.

Understand what an implied license is: it is a type of agreement between two parties where one party grants the other party the right to use their work, without the need for a written agreement.
Know the different types of implied license, including perpetual, non-exclusive, and royalty-free.
Identify the rights and limitations that come with each type of implied license.
Be aware that implied licenses are often limited to one-time use, or may be limited to specific types of use.
Understand that implied licenses are implied in the absence of a written agreement and may be subject to the jurisdiction of the courts.
Be familiar with the concept of waiver of implied license.

You can check off this step when you have a clear understanding of the concept of an implied license, the different types of implied license, and the rights and limitations associated with each type.

Understand the concept of a co-ownership agreement, which is when two or more parties own a work or interest in a work
Know the key elements of a co-ownership agreement, including the ownership interests, rights granted, and the obligations and liabilities of each party
Identify the rights and responsibilities of each party in regards to the agreement, such as the right to exploit the work, the right to license the work, and the right to transfer the ownership interests
Understand the concept of “joint authorship”, which occurs when two or more authors contribute to a work in a way that makes them both authors
Familiarize yourself with the concept of “work-made-for-hire”, which is when an employer hires an independent contractor to create a work and, under the law, the employer is considered the author
Learn about the concept of “moral rights”, which give authors the right to the integrity of their work, including the right to be credited, the right to prevent distortion or modification, and the right to withdraw the work from the public

You will know you can check this off your list and move on to the next step when you have a thorough understanding of the concept of a co-ownership agreement, including the key elements, rights, and responsibilities of the parties involved.

John - What are the key elements of a copyright assignment agreement?

Asked by John on April 16th 2022. A: A copyright assignment agreement is an important legal document which assigns the rights of a copyright from one party, the copyright holder, to another, the assignee. The key elements of a copyright assignment agreement are:

Identification of the parties – The agreement must include the names and contact details of both the copyright holder and assignee.
Description of the work – The work being assigned must be described in detail, including any variations or modifications.
Rights granted – This should include a clear description of what rights are being assigned and which jurisdiction they apply to (e.g. US, UK or EU).
Term of the assignment – This should specify how long the assignment is valid for, or if it is an indefinite term.
Consideration – This should outline what consideration is being provided by the assignee in exchange for the rights granted.
Warranty – This should indicate that the copyright holder warrants that they have full power and authority to enter into the agreement and grant the rights specified in it.
Indemnity – This should specify that the assignee will indemnify and hold harmless the copyright holder from any claims related to the copyright assignment agreement.
Confidentiality – This should indicate that all information related to the agreement will remain confidential between both parties.
Termination – This should describe how either party can terminate the agreement.
Governing law – This should indicate which law governs any disputes related to the agreement.

Jane - How do I know if I need a copyright assignment agreement?

Asked by Jane on November 12th 2022. A: Whether or not you need a copyright assignment agreement depends on your particular situation and needs as a business or individual. Generally speaking, a copyright assignment agreement is necessary if you are transferring your copyright to another party for consideration (e.g. money). It’s also important to remember that different jurisdictions (e.g. USA, UK, EU) have different laws when it comes to copyrights and other intellectual property issues, so it’s essential to make sure you are familiar with those laws and how they may affect your specific situation before entering into any kind of agreement with another party. Additionally, if you are in an industry such as technology or software as a service (SaaS), you may need an additional layer of protection when it comes to intellectual property matters such as copyrights, so having a clear and detailed copyright assignment agreement is especially important in these cases.

Example dispute

Suing for breach of copyright assignment agreement.

A plaintiff can raise a lawsuit for breach of a copyright assignment agreement if they can prove that the defendant has violated the agreement in some way.
The plaintiff must be able to demonstrate that they have been harmed in some way due to the defendant’s breach of the agreement.
The plaintiff must provide evidence of copyright ownership, such as a written assignment agreement, to prove that the copyright infringement occurred.
The plaintiff may be able to recover damages related to the breach, including monetary damages, injunctive relief, or both.
The plaintiff may also be able to seek punitive damages if they can show that the defendant’s actions were particularly egregious.
Settlement may be reached through negotiation or mediation, or the court may decide the case.
In some cases, a jury may be used to decide the case and determine the amount of damages to be awarded.

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Copyright Assignment Agreement: Definition & Sample

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ContractsCounsel has assisted 36 clients with copyright assignment agreements and maintains a network of 64 intellectual property lawyers available daily. Customers rate lawyers for copyright assignment agreement matters 5.0.

What is a Copyright Assignment Agreement?

A copyright assignment agreement is a legal document transferring the ownership and rights of a specific creative work or works. A copyright assignment agreement protects the rights of parties involved by clarifying and providing a record of ownership of a work, especially in the event of a transfer.

Notarization of a copyright assignment agreement is not legally required, but it is always a good idea to get an agreement like this notarized. Copyright assignment agreements can cover works such as writing or artwork and are sometimes known as a sales agreement for copyright.

Common Sections in Copyright Assignment Agreements

Below is a list of common sections included in Copyright Assignment Agreements. These sections are linked to the below sample agreement for you to explore.

Copyright Assignment Agreement Sample

Reference : Security Exchange Commission - Edgar Database, EX-10.15 16 d437016dex1015.htm INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT , Viewed October 13, 2021, View Source on SEC .

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Understanding Assignment of Copyright

Copyright is a bundle of rights and can be exploited in several ways independently from each other. Each work has various rights, such as theatrical rights, distribution rights, rental rights, broadcasting rights, rights related to adoption and translation, rights to prepare derivative works, and so on, each of which can be exploited separately. These rights can be disjointedly assigned for a limited term or perpetually.

What is an Assignment of Copyright?

An assignment is, in spirit, a transfer of ownership, even if it is partial. The copyright owner in an existing work or the future owner of the copyright in a further work may assign to any person the copyright either wholly or partially, either generally or subject to limitation, either for the whole of copyright or any part thereof. In case the assignment of copyright is for any future work, the assignment will take effect only when the work is in an expressed form and not just an idea.

No one has the right to copy, reproduce, sell, or publish an original work without the permission of the creator. It means that only the owner of the copyright can transfer the ownership of the copyright to a third party. Another important thing to note is that with the assignment of a copyright, the assignee shall also enjoy all the rights related to the copyright of the assigned work.

An assignment has two objectives:

Where an assignee is concerned, it confers on him the right of exploitation of work for a specified period in the specified territory; and;
For the assignor, it confers on him the right to receive a royalty on the work assigned.

Mode of Assignment of Copyright

The owner of the copyright in the existing or future work may assign it to any person. It can be assigned either wholly or partially and with or without limitation on the whole or any part of the copyright. Assignment of copyright in any work shall not be valid unless it is in writing and signed by the assignor or by his authorized agent. Oral assignment of copyright is usually neither permissible nor valid. It shall identify the work and specify the rights assigned, the duration, the territorial extent of such assignment, and the amount of royalty payable to the author.

Difference between Assignment and Licensing of Copyright

Copyright license and assignment of copyright are two dissimilar terms that cannot be used interchangeably. Each of them is different in its own way. A license provides approval of an act, and without it, the authorization would amount to infringement. Licensing usually involves authorizing some of the rights out of many. It can either be exclusive or non-exclusive. In the case of assignment, it includes the disposal of the copyright, which in simple terms means the assignor assigns the copyright to another person or the transfer of ownership of the copyright to some other person, whereas in the case of a license, only some Intellectual Property (IP) is transferred and the ownership is not transferred to the licensee. A license does not confer any right to the licensee against a third party or licensor, but an exclusive licensee has substantial rights against the licensor and even a right to sue the licensor.

A licensee also has the right to make amendments provided that his license does not restrict that right. In case there is a failure in paying the royalties, the licensor can revoke the license. When it comes to the assignment, the same is not possible. However, if there is anything harsh that can affect the author, it may lead to revocation in the event of a complaint made to the copyright board.

A copyright license, unlike a copyright assignment, needs to be in writing. It can be oral or implied after considering all the facts and circumstances relating to the transaction between the owner of the copyright and the licensee. Thus, if an individual who is the owner of a copyrighted work thinks about assigning the copyright, he can consider licensing his copyright instead of assigning it. It would help in retaining ownership, thereby licensing only certain rights to another party.

Essential Features of a Copyright Assignment Agreement

The assignment must specify the amount of copyright. The creator shall not assign or waive the right to receive royalties to be shared on an equal basis with the assignee of copyright, subject to certain conditions.
The ownership may be assigned either wholly or partially.
The assignment should also specify the duration.
The territorial extent of such assignment should be specified.
The assignment shall be subject to revision, extension, or termination on terms mutually agreed upon by the parties.
The creator is entitled to subsequent royalties in the course of future exploitation of a work.
The assignee has the rights of translation, abridgment, adaptation, and dramatic and filmmaking in the work after obtaining the rights via assignment deed.

The main objective of the assignment process is to give financial and distribution benefits to the original work. Copyright assignment can prove to be a necessity in this world as it may lead to enhancing the potential of the original work by reaching several individuals as they may add their creativity to the original work. However, the practicality of copyright assignment has been controversial on several occasions due to the increasing number of Copyright Infringement cases. ✅ For more visit: https://www.kashishipr.com/

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THIS IS AN ADVERISEMENT

Copyright Assignment (Transfer Ownership of a Copyright)

General information.

A copyright assignment is the transfer of one’s ownership of a copyrighted work to another person or entity. The prior owner (assignor) gives up all rights to the work to the new owner (assignee). The assignee gains all rights to the work as the legal or beneficial owner and may take legal action to prevent infringing uses of the work, etc. Copyright Act Section 501(b) .

According to federal law, a voluntary transfer of copyright ownership is not valid unless the details of the conveyance are contained in a writing signed by the copyright owner or the owner’s authorized agent. Copyright Act Section 204(a) .

Purpose/Necessity

An assignment may be used:

After a business is sold and the work’s rights are transferred to the purchaser
As security for a debt (through a mortgage or other security interest)
As a bequest in a will or an asset passed to heirs by intestacy/probate
As part of the distribution of assets following a bankruptcy proceeding
The work’s owner retains ownership but changes his or her name
The work’s owner retains ownership but changes its business name or entity type
Any other instance where the owner of a work wishes to transfer it to another

Recording an assignment is not mandatory to assign the interest bur provides the following advantages:

Recording the transfer establishes a public record of the details of the transfer and the contents of the document affecting the transfer. Such details will appear in the Copyright Office’s online public catalog .
The document or material attached to it specifically identifies the work to which it pertains so that, after the document is indexed by the Register of Copyrights, it would be revealed by a reasonable search under title or registration number of the work; and
Registration has been made for the work.
Constructive notice means that the public is deemed to have knowledge of the facts stated in the document – including those speaking to the ownership of rights – and cannot claim otherwise.
Under Sections 205d and 205e of the Copyright Act , recording establishes priority of rights as between conflicting assignments/transfers of ownership, or between a conflicting assignment and a nonexclusive license. This means that the first recorded assignment will be taken as valid as against any later alleged assignments.
In some instances, recording may be necessary to validate the transfer of copyrights as against third parties. Copyright Office – Circular 1: Copyright Basics .
In some states, recording may be necessary to perfect a security interest. Copyright Office – Circular 12: Recordation of Transfers and Other Documents .

Frequently Asked Questions

Once a work is created and fixed in a tangible form, the author (or the author’s employer if the work was a Work Made for Hire), gains certain rights to the copyrighted work. The author has the exclusive right to: • Reproduce the work in copies or phonorecords; • Prepare derivative works based upon the work; • Distribute copies or phonorecords of the work to the public; and • Perform or display the work publicly.The author may subsequently transfer all or part of these rights through an (permanent) assignment or a (temporary) license. Copyright Act Section 201(d)(2) . Following negotiations between the parties as to the terms of the transfer, a written document must be signed by the owner of the rights conveyed stating the particular rights to be conveyed.
An assignment does not alter the work’s copyright duration. The assignee gains all rights transferred for the remainder of the copyright in effect. For works created by a single author, the length of copyright is the life of the author plus 70 years. Copyright Act Section 302(a) .
According to the Copyright Act, a copyright may be transferred by any means of conveyance, including bequeath by will or pass through intestate succession. Copyright Act Section 201(d)(1) . Some types of documents that may suffice include an assignment, mortgage, contract, deed, or promissory note.If you use our firm to assist you in your copyright assignment, we review your document to ensure that it conveys the rights desired, and then record it with the Copyright Office to establish a public record. Alternatively, if you do not have an existing document of transfer, we can draft a document to meet your purposes and then complete the recording process.
The Copyright Office does not provide a form or example of an acceptable document which effects a copyright transfer. Copyright Office FAQ – Assignment/Transfer of Copyright Ownership . The Copyright Office does not examine documents for legal sufficiency for their intended purpose prior to recording. Furthermore, the fee to record a document with the Copyright Office is nonrefundable. Copyright Office – Circular 12: Recordation of Transfers and Other Documents .It is therefore important to consult with an attorney knowledgeable about copyright assignments to ensure that the copyrighted work(s) in question actually transfer as desired.
No, the rights given by copyright are the author’s immediately upon fixing the work in a tangible medium of expression. These rights may be transferred through a written instrument and the Copyright Office will record such an instrument before or after the work has been registered with the Copyright Office. Copyright Act Section 205(a) . However, there are several important benefits of copyright registration, and it is helpful to register the work so that the recorded assignment references a work indexed in the Copyright Office’s records .
No, essentially for the same reasons, copyrights may be transferred whether or not the underlying work has been published. The Copyright Office will record a document evidencing a transfer of an unpublished work. Copyright Office – Circular 12: Recordation of Transfers and Other Documents .

Legal Services Offered and Cost

Recording of Copyright Assignment Note: this service is for copyright holders who have already transferred their copyright through a written instrument but have not yet filed/recorded the instrument Legal fees: $300 flat fee This includes:

Review of client’s information to ensure legal requirements are fulfilled
Answer client questions, make corrections, and obtain additional information as needed
Review of copyright assignment document to ensure proper transfer is made
Completion of Copyright Recordation Document Cover Sheet
Submission of the assignment document, Cover Sheet, and filing fee with the Copyright Office
Email confirmation of copyright assignment recording by the Copyright Office with official Certificate of Recordation

If you are ready to get started, please CLICK HERE to enter basic information using our secure online form.

Drafting and Recording of Copyright Assignment Legal fees: $300 flat fee

This includes:

Completion of copyright assignment document to make the assignment

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> Intellectual Property Licensing and Transactions
> Implied Licenses and Unwritten Transactions

Book contents

Intellectual Property Licensing and Transactions
Copyright page
Acknowledgments
Introduction
Part I Introduction to Intellectual Property Licensing
1 The Business of Licensing
2 Ownership and Assignment of Intellectual Property
3 The Nature of an Intellectual Property License
4 Implied Licenses and Unwritten Transactions
5 Confidentiality and Pre-license Negotiations
Part II License Building Blocks
Part III Industry- and Context-Specific Licensing Topics
Part IV Advanced Licensing Topics

4 - Implied Licenses and Unwritten Transactions

from Part I - Introduction to Intellectual Property Licensing

Published online by Cambridge University Press: 21 June 2022

Chapter 4 addresses a range of legal mechanisms by which IP licenses are implied either in fact or in law, notwithstanding the requirements of the Statute of Frauds. Specific cases cover pitches and idea submissions in industries such as toy design and creative works (Nadel v. Play by Play and Wrench v. Taco Bell), commissioned works (IAE v. Shaver), and implied licenses arising from conduct (McCoy v. Mitsuboshi Cutlery).

Summary Contents

4.1 Statutes of Frauds 67

4.2 Pitches and Idea Submissions 68

4.3 Implied Licenses and Commissioned Works 81

4.4 Implied Licenses in Law 89

We generally think of license agreements as written documents signed (or clicked) by the parties. However, there are numerous situations in which a license or other rights may be implied through the conduct of the parties, a course of dealing or industry custom. Yet the law of implied licenses, and implied contracts more generally, is somewhat incoherent. As one leading treatise observes:

[In] many modern implied license cases, courts attempt to describe the doctrine in terms of categories or types of implied licenses. In our view, most of these efforts are incomplete or worse; they create overlapping categories to the point that the categories confuse, rather than aid in analysis … The fact that the doctrine involves overlapping, difficult to describe concepts, however, does not mean that implied license cases are random; it means, rather, that so many different concepts are brought into this concept that understanding it as a single theme is difficult. Footnote 1

Implied license theories crop up in other chapters of this book, including those relating to scope of the license ( Section 6.1 ), first sale and exhaustion ( Chapter 23 ), and the licensing of technical standards ( Chapter 20 ). The common theme among the cases dealing with implied licenses, if any exists, is that implied licenses may be recognized by a court in order to achieve some just end when express contractual terms are not up to the job. In this chapter we will consider a few special scenarios in which implied licenses and other rights may arise, bearing in mind that the potential to argue for the existence of an implied license is limited only by the ingenuity of the lawyers involved.

4.1 Statutes of Frauds

Implied licenses are, by their very nature, unwritten. Statutes of frauds are legal requirements that, to be enforceable, particular types of transactions must be in writing, typically accompanied by authorized signatures and, sometimes, other formalities. On one hand, a rule requiring written documentation serves important functions of preventing fraud, giving effective notice, signaling the legal significance of a promise, and providing a record of the terms of the agreement. On the other hand, a writing requirement enables bad actors to avoid unwritten promises, increases transaction costs and introduces the likelihood that otherwise legitimate agreements will be invalidated on purely technical (and increasingly archaic) grounds.

As discussed in Chapter 2 , federal copyright, patent and trademark law all contain rules that relate to the transfer and assignment of these rights. But is a license an “assignment” for the purposes of the statute of frauds? There is little statutory guidance regarding this question, but the answer is likely no. The Copyright Act, however, expressly includes “exclusive licenses” among the types of transactions requiring a written instrument. Does this mean that nonexclusive licenses need not be written? In many cases this is probably the rule (see I.A.E. v. Shaver, infra , Section 4.3 ).

State law statutes of frauds vary, but none specifically refers to licenses or transfers of intellectual property. This being said, the Restatement (Second) of Contracts § 110(e) notes that “a contract that is not to be performed within one year from the making thereof” is subject to the statute of frauds. The one-year requirement, to the extent recognized by a court, could seriously impact many licensing transactions. For example, in Commonwealth Film Processing, Inc. v. Courtaulds United States, Inc ., 717 F. Supp. 1157 (W.D. Va. 1989), the executives of two companies engaged in patent litigation met at an airport to discuss the settlement of their claims through a licensing arrangement. At that meeting, “certain basic understandings were reached on issues relevant to a possible license agreement” between the parties.

In holding that the oral settlement and license agreement were unenforceable under the one-year rule, the court reasoned that

It is clear from the allegations in Commonwealth’s complaint that the license agreement they contend was reached cannot be fully performed within one year. In paragraph 11a of the complaint, Commonwealth alleges that the license agreement would be “continuous.” Paragraph 11b states that the alleged agreement contained a provision for royalty payments which were to continue for five years. Consequently, the license agreement which is alleged by Commonwealth falls squarely within the statute of frauds and is unenforceable unless saved by a recognized exception to the statute.

At least one state supreme court has criticized the one-year rule. In C.R. Klewin, Inc. v. Flagship Properties, Inc. , 600 A.2d 772 (Conn. 1991), the court reasons that the rule no longer supports the policies that gave rise to the statute of frauds and observes that the “only remaining effect” of the one-year rule “is arbitrarily to forestall adjudication of possible meritorious claims.” The Klewin court thus adopts what is now the majority rule: an unwritten contract is not void under the one-year rule unless it cannot be performed within the one-year period under any circumstances. The fact that a contract is not likely to be performed within one year is not enough to void such an unwritten contract .

4.2 Pitches and Idea Submissions

In many industries, the owner of an IP right may approach a potential licensee to “pitch” a new idea, whether a business plan, a screenplay, a concept for a new reality TV show or, as in the Nadel case below, the idea for a new toy. In most cases, no documents have changed hands, let alone been executed. Yet in some cases, the submitter of an idea may be able to claim that use of that idea by a recipient gives rise to an implicit obligation to be compensated. The implied license doctrine in the context of idea submissions is discussed in the cases that follow.

Nadel v. Play-By-Play Toys & Novelties, Inc.

208 f.3d 368 (2d cir. 1999).

SOTOMAYOR, CIRCUIT JUDGE

Craig P. Nadel (Nadel) brought this action against Play-By-Play Toys & Novelties, Inc. (Play-By-Play) for breach of contract, quasi contract, and unfair competition …

Nadel is a toy idea man. Toy companies regularly do business with independent inventors such as Nadel in order to develop and market new toy concepts as quickly as possible. To facilitate the exchange of ideas, the standard custom and practice in the toy industry calls for companies to treat the submission of an idea as confidential. If the company subsequently uses the disclosed idea, industry custom provides that the company shall compensate the inventor, unless, of course, the disclosed idea was already known to the company.

In 1996, Nadel developed the toy concept at issue in this case. He transplanted the “eccentric mechanism” found in several hanging Halloween toys then on the market [and] placed the mechanism inside of a plush toy monkey skin to develop the prototype for a new table-top monkey toy. This plush toy figure sat upright, emitted sound, and spun when placed on a flat surface.

In October 1996, Nadel met with Neil Wasserman, an executive at Play-By-Play who was responsible for the development of its plush toy line. According to Nadel, he showed his prototype monkey toy to Wasserman, who expressed interest in adapting the concept to a non-moving, plush Tazmanian Devil toy that Play-By-Play was already producing under license from Warner Bros. Nadel contends that, consistent with industry custom, any ideas that he disclosed to Wasserman during their October 1996 meeting were subject to an agreement by Play-By-Play to keep such ideas confidential and to compensate Nadel in the event of their use.

Nadel claims that he sent his prototype monkey toy to Wasserman as a sample and awaited the “Taz skin” and voice tape, which Wasserman allegedly said he would send, so that Nadel could make a sample spinning/laughing Tazmanian Devil toy for Play-By-Play. Wasserman never provided Nadel with the Taz skin and voice tape, however, and denies ever having received the prototype monkey toy from Nadel.

Notwithstanding Wasserman’s denial, his secretary, Melissa Rodriguez, testified that Nadel’s prototype monkey toy remained in Wasserman’s office for several months. According to Ms. Rodriguez, the monkey toy was usually kept in a glass cabinet behind Wasserman’s desk, but she remembered that on one occasion she had seen it on a table in Wasserman’s office. Despite Nadel’s multiple requests, Wasserman did not return Nadel’s prototype monkey toy until February 1997, after Play-by-Play introduced its “Tornado Taz” product at the New York Toy Fair.

The parties do not dispute that “Tornado Taz” has the same general characteristics as Nadel’s prototype monkey [toy]. Nadel claims that, in violation of their alleged agreement, Play-By-Play used his idea without paying him compensation. Play-By-Play contends, however, that it independently developed the Tornado Taz product concept and that Nadel is therefore not entitled to any compensation. Specifically, Play-By-Play maintains that, as early as June or July of 1996, two of its officers – Wasserman and Slattery – met in Hong Kong and began discussing ways to create a spinning or vibrating Tazmanian Devil, including the possible use of an eccentric mechanism. Furthermore, Play-By-Play claims that in late September or early October 1996, it commissioned an outside manufacturing agent – Barter Trading of Hong Kong – to begin developing Tornado Taz.

Play-By-Play also argues that, even if it did use Nadel’s idea to develop Tornado Taz, Nadel is not entitled to compensation because Nadel’s concept was unoriginal and non-novel to the toy industry in October 1996.

Nadel’s Claims

On January 21, 1999, the district court granted Play-By-Play’s motion for summary judgment dismissing Nadel’s claims for breach of contract, quasi contract, and unfair competition. Interpreting New York law, the district court stated that “a party is not entitled to recover for theft of an idea unless the idea is novel or original.” Applying that principle to Nadel’s claims, the district court concluded that, even if the spinning toy concept were novel to Play-By-Play at the time Nadel made the disclosure to Wasserman in October 1996, Nadel’s claims must nonetheless fail for lack of novelty or originality because “numerous toys containing the characteristics of [Nadel’s] monkey were in existence prior to October 1996.”

Submission-of-Idea Cases under New York Law

Our analysis begins with the New York Court of Appeals’ most recent discussion of the law governing idea submission cases, Apfel v. Prudential-Bache Securities, Inc ., 616 N.E.2d 1095 (1993). In Apfel , the Court of Appeals discussed the type of novelty an idea must have in order to sustain a contract-based or property-based claim for its uncompensated use. Specifically, Apfel clarified an important distinction between the requirement of “novelty to the buyer” for contract claims, on the one hand, and “originality” (or novelty generally) for misappropriation claims, on the other hand.

Under the facts of Apfel , the plaintiff disclosed his idea to the defendant pursuant to a confidentiality agreement and, subsequent to disclosure, entered into another agreement wherein the defendant agreed to pay a stipulated price for the idea’s use. The defendant used the idea but refused to pay plaintiff pursuant to the post-disclosure agreement on the asserted ground that “no contract existed between the parties because the sale agreement lacked consideration.” The defendant argued that an idea could not constitute legally sufficient consideration unless it was original or novel generally and that, because plaintiff’s idea was not original or novel generally (it had been in the public domain at the time of the post-disclosure agreement), the idea provided insufficient consideration to support the parties’ post-disclosure contract.

Figure 4.1 Tornado Taz.

In rejecting defendant’s argument, the Court of Appeals held that there was sufficient consideration to support plaintiff’s contract claim because the idea at issue had value to the defendant at the time the parties concluded their post-disclosure agreement. The Apfel court noted that “traditional principles of contract law” provide that parties “are free to make their bargain, even if the consideration exchanged is grossly unequal or of dubious value,” and that, so long as the “defendant received something of value” under the contract, the contract would not be void for lack of consideration.

The Apfel court explicitly rejected defendant’s contention that the court should carve out “an exception to traditional principles of contract law” for submission-of-idea cases by requiring that an idea must also be original or novel generally in order to constitute valid consideration. In essence, the defendant sought to impose a requirement that an idea be novel in absolute terms, as opposed to only the defendant buyer, in order to constitute valid consideration for the bargain. In rejecting this argument, the Apfel court clarified the standards for both contract-based and property-based claims in submission-of-idea cases. That analysis guides our decision here.

The Apfel court first noted that “novelty as an element of an idea seller’s claim” is a distinct element of proof with respect to both (1) “a claim based on a property theory” and (2) “a claim based on a contract theory.” The court then proceeded to discuss how the leading submission-of-idea case – Downey v. General Foods Corp ., 286 N.E.2d 257 (1972) – treated novelty with respect to property-based and contract-based claims. First, the Apfel court explained that the plaintiff’s property-based claims for misappropriation were dismissed in Downey because “the elements of novelty and originality [were] absent,” i.e., the ideas were so common as to be unoriginal and known generally. Second, the Apfel court explained that the plaintiff’s contract claims in Downey had been dismissed on the separate ground that the “defendant possessed plaintiff’s ideas prior to plaintiff’s disclosure [and thus], the ideas could have no value to defendant and could not supply consideration for any agreement between the parties.”

By distinguishing between the two types of claims addressed in Downey and the different bases for rejecting each claim, the New York Court of Appeals clarified that the novelty requirement in submission-of-idea cases is different for misappropriation of property and breach of contract claims …

Thus, the Apfel court refused to read Downey and “similar decisions” as requiring originality or novelty generally in all cases involving disclosure of ideas. Rather, the Apfel court clarified that the longstanding requirement that an idea have originality or general novelty in order to support a misappropriation claim does not apply to contract claims. For contract-based claims in submission-of-idea cases, a showing of novelty to the buyer will supply sufficient consideration to support a contract.

Moreover, Apfel made clear that the “novelty to the buyer” standard is not limited to cases involving an express post-disclosure contract for payment based on an idea’s use. The Apfel court explicitly discussed the pre-disclosure contract scenario present in the instant case, where “the buyer and seller contract for disclosure of the idea with payment based on use, but no separate postdisclosure contract for the use of the idea has been made.” In such a scenario, a seller might, as Nadel did here, bring an action against a buyer who allegedly used his ideas without payment, claiming both misappropriation of property and breach of an express or implied-in-fact contract. The Apfel court recognized that these cases present courts with the difficult problem of determining “whether the idea the buyer was using was, in fact, the seller’s.” Specifically, the court noted that, with respect to a misappropriation of property claim, it is difficult to “prove that the buyer obtained the idea from [the seller] and nowhere else.” With respect to a breach of contract claim, the court noted that it would be inequitable to enforce a contract if “it turns out upon disclosure that the buyer already possessed the idea.” The court then concluded that, with respect to these cases, “[a] showing of novelty, at least novelty as to the buyer” should address these problems.

We note, moreover, that the “novelty to the buyer” standard comports with traditional principles of contract law. While an idea may be unoriginal or non-novel in a general sense, it may have substantial value to a particular buyer who is unaware of it and therefore willing to enter into contract to acquire and exploit it. In fact, the notion that an unoriginal idea may still be novel (and valuable) to a particular buyer is not itself a novel proposition … In contrast to contract-based claims, a misappropriation claim can only arise from the taking of an idea that is original or novel in absolute terms, because the law of property does not protect against the misappropriation or theft of that which is free and available to all …

Finally, although the legal requirements for contract-based claims and property-based claims are well-defined, we note that the determination of novelty in a given case is not always clear. The determination of whether an idea is original or novel depends upon several factors, including, inter alia, the idea’s specificity or generality (is it a generic concept or one of specific application?), its commonality (how many people know of this idea?), its uniqueness (how different is this idea from generally known ideas?), and its commercial availability (how widespread is the idea’s use in the industry?).

Moreover, in assessing the interrelationship between originality and novelty to the buyer, we note that in some cases an idea may be so unoriginal or lacking in novelty that its obviousness bespeaks widespread and public knowledge of the idea, and such knowledge is therefore imputed to the buyer. In such cases, a court may conclude, as a matter of law, that the idea lacks both the originality necessary to support a misappropriation claim and the novelty to the buyer necessary to support a contract claim.

In sum, we find that New York law in submission-of-idea cases is governed by the following principles: Contract-based claims require only a showing that the disclosed idea was novel to the buyer in order to find consideration. Such claims involve a fact-specific inquiry that focuses on the perspective of the particular buyer. By contrast, misappropriation claims require that the idea at issue be original and novel in absolute terms. This is so because unoriginal, known ideas have no value as property and the law does not protect against the use of that which is free and available to all. Finally, an idea may be so unoriginal or lacking in novelty generally that, as a matter of law, the buyer is deemed to have knowledge of the idea. In such cases, neither a property-based nor a contract-based claim for uncompensated use of the idea may lie.

In light of New York’s law governing submission-of-idea cases, we next consider whether Nadel’s toy idea was original or novel in absolute terms so as to support his misappropriation claim and whether his idea was novel as to Play-By-Play so as to support his contract claims.

Nadel’s Misappropriation Claim

[In] this case, the district court did not decide whether Nadel’s idea – a plush toy that sits upright, emits sounds, and spins on a flat surface by means of an internal eccentric motor – was inherently lacking in originality. We therefore remand this issue to the district court to determine whether Nadel’s idea exhibited “genuine novelty or invention” or whether it was “a merely clever or useful adaptation of existing knowledge.”

Moreover, insofar as the district court found that Nadel’s idea lacked originality and novelty generally because similar toys were commercially available prior to October 1996, we believe that there remains a genuine issue of material fact on this point. While the record contains testimony of Play-By-Play’s toy expert – Bert Reiner – in support of the finding that Nadel’s product concept was already used in more than a dozen different plush toys prior to October 1996, the district court cited the “Giggle Bunny” toy as the only such example. Nadel disputes Reiner’s contention and claims, furthermore, that the district court erroneously relied on an undated video depiction of the Giggle Bunny toy to conclude that upright, sound-emitting, spinning plush toys were commercially available prior to October 1996.

With respect to the Giggle Bunny evidence, we agree with Nadel that the Giggle Bunny model depicted in the undated video exhibit is physically different from the earlier Giggle Bunny model known to be commercially available in 1994. Drawing all factual inferences in Nadel’s favor, we cannot conclude as a matter of law that the upright, sound-emitting, spinning plush Giggle Bunny shown in the video exhibit was commercially available prior to October 1996, and we certainly cannot conclude based on this one exhibit that similar toys were in the public domain at that time.

Moreover, although we find highly probative Mr. Reiner’s testimony that numerous toys with the same general characteristics of Nadel’s toy idea were commercially available prior to October 1996, his testimony and related evidence are too ambiguous and incomplete to support a finding of unoriginality as a matter of law. Mr. Reiner’s testimony fails to specify precisely which (if any) of the enumerated plush toys were designed to (1) sit upright, (2) on a flat surface, (3) emit sounds, and (4) spin or rotate (rather than simply vibrate like “Tickle Me Elmo,” for example). Without this information, a reasonable finder of fact could discount Mr. Reiner’s testimony as vague and inconclusive.

On remand, the district court is free to consider whether further discovery is warranted to determine whether Nadel’s product concept was inherently original or whether it was novel to the industry prior to October 1996. A finding of unoriginality or lack of general novelty would, of course, preclude Nadel from bringing a misappropriation claim against Play-By-Play. Moreover, in evaluating the originality or general novelty of Nadel’s idea in connection with his misappropriation claim, the district may consider whether the idea is so unoriginal that Play-By-Play should, as a matter of law, be deemed to have already possessed the idea, and dismiss Nadel’s contract claims on that ground.

Nadel’s Contract Claims

Mindful that, under New York law, a finding of novelty as to Play-By-Play will provide sufficient consideration to support Nadel’s contract claims. [Reading the] record in a light most favorable to Nadel, we conclude that there exists a genuine issue of material fact as to whether Nadel’s idea was, at the time he disclosed it to Wasserman in early October 1996, novel to Play-By-Play. Notably, the timing of Play-By-Play’s development and release of Tornado Taz in relation to Nadel’s October 1996 disclosure is, taken alone, highly probative. Moreover, although custom in the toy industry provides that a company shall promptly return all samples if it already possesses (or does not want to use) a disclosed idea, Play-By-Play in this case failed to return Nadel’s prototype monkey toy for several months, despite Nadel’s multiple requests for its return. According to Wasserman’s secretary, Melissa Rodriguez, Nadel’s sample was not returned until after the unveiling of “Tornado Taz” at the New York Toy Fair in February 1997. Ms. Rodriguez testified that from October 1996 through February 1997, Nadel’s sample was usually kept in a glass cabinet behind Wasserman’s desk, and on one occasion, she remembered seeing it on a table in Wasserman’s office. These facts give rise to the reasonable inference that Play-By-Play may have used Nadel’s prototype as a model for the development of Tornado Taz.

None of the evidence adduced by Play-By-Play compels a finding to the contrary on summary judgment. With regard to the discussions that Play-By-Play purportedly had in June or July of 1996 about possible ways to create a vibrating or spinning Tazmanian Devil toy, those conversations only lasted, according to Mr. Slattery, “a matter of five minutes.” Play-By-Play may have “discussed the concept,” as Mr. Slattery testified, but the record provides no evidence suggesting that, in June or July of 1996, Play-By-Play understood exactly how it could apply eccentric motor technology to make its Tazmanian Devil toy spin rather than, say, vibrate like Tickle Me Elmo. Similarly, although Play-By-Play asserts that it commissioned an outside manufacturing agent – Barter Trading of Hong Kong – to begin developing Tornado Taz in late September or early October of 1996, Play-By-Play admits that it can only “guess” the exact date. Play-By-Play cannot confirm that its commission of Barter Trading pre-dated Nadel’s alleged disclosure to Wasserman on or about October 9, 1996. Nor has Play-By-Play produced any documents, technical or otherwise, relating to its purported business venture with Barter Trading or its independent development of a spinning Tornado Taz prior to October 1996. Based on this evidence, a jury could reasonably infer that Play-By-Play actually contacted Barter Trading, if at all, after learning of Nadel’s product concept, and that Play-By-Play’s development of Tornado Taz is attributable to Nadel’s disclosure.

We therefore conclude that there exists a genuine issue of material fact as to whether Nadel’s idea was, at the time he disclosed it to Wasserman in early October 1996, novel to Play-By-Play. As to whether the other elements necessary to find a valid express or implied-in-fact contract are present here, e.g., mutual assent, legal capacity, legal subject matter, we leave that determination to the district court to address, if necessary, on remand.

For the foregoing reasons, we affirm that part of the district court’s judgment dismissing Play-By-Play’s counterclaims. We vacate that part of the district court’s judgment granting Play-By-Play’s motion for summary judgment and dismissing Nadel’s complaint and remand for further proceedings consistent with this opinion .

Wrench LLC v. Taco Bell Corp.

256 f.3d 446 (6th cir. 2001).

GRAHAM, DISTRICT JUDGE

This case raises a question of first impression in this circuit regarding the extent to which the Copyright Act preempts state law claims based on breach of an implied-in-fact contract. Plaintiffs-Appellants Wrench LLC, Joseph Shields, and Thomas Rinks brought this diversity action against Defendant-Appellee Taco Bell Corporation (“Taco Bell”), claiming breach of implied contract and various torts related to Taco Bell’s alleged use of appellants’ ideas.

Appellants Thomas Rinks and Joseph Shields are creators of the “Psycho Chihuahua” cartoon character which they promote, market, and license through their wholly-owned Michigan limited liability company, Wrench LLC. The parties have described Psycho Chihuahua as a clever, feisty dog with an attitude; a self-confident, edgy, cool dog who knows what he wants and will not back down.

In June 1996, Shields and Rinks attended a licensing trade show in New York City, where they were approached by two Taco Bell employees, Rudy Pollak, a vice president, and Ed Alfaro, a creative services manager. Pollak and Alfaro expressed interest in the Psycho Chihuahua character, which they thought would appeal to Taco Bell’s core consumers, males aged eighteen to twenty-four. Pollak and Alfaro obtained some Psycho Chihuahua materials to take with them back to Taco Bell’s headquarters in California.

Upon returning to California, Alfaro began promoting the Psycho Chihuahua idea within Taco Bell. [After] several meetings with non-marketing executives, Alfaro showed the Psycho Chihuahua materials to Vada Hill, Taco Bell’s vice president of brand management, as well as to Taco Bell’s then-outside advertising agency, Bozell Worldwide. Alfaro also tested the Psycho Chihuahua marketing concept with focus groups to gauge consumer reaction to the designs submitted by Rinks and Shields.

During this time period, Rinks told Alfaro that instead of using the cartoon version of Psycho Chihuahua in its television advertisements, Taco Bell should use a live dog, manipulated by computer graphic imaging, with the personality of Psycho Chihuahua and a love for Taco Bell food. Rinks and Alfaro also discussed what it was going to cost for Taco Bell to use appellants’ character, and although no specific numbers were mentioned, Alfaro understood that if Taco Bell used the Psycho Chihuahua concept, it would have to pay appellants.

In September 1996, Rinks and Shields hired Strategy Licensing (“Strategy”), a licensing agent, to represent Wrench in its dealings with Taco Bell. [On] November 18, 1996, Strategy representatives forwarded a licensing proposal to Alfaro. [Taco Bell] did not accept this proposal, although it did not explicitly reject it or indicate that it was ceasing further discussions with Wrench.

On December 5, 1996, Alfaro met with Hill, who had been promoted to the position of chief marketing officer, and others, to present various licensing ideas, including Psycho Chihuahua. On February 6, 1997, Alfaro again met with appellants and representatives of Strategy to review and finalize a formal presentation featuring Psycho Chihuahua that was to be given to Taco Bell’s marketing department in early March 1997. At this meeting, appellants exhibited examples of possible Psycho Chihuahua promotional materials and also orally presented specific ideas for television commercials featuring a live dog manipulated by computer graphics imaging. These ideas included a commercial in which a male dog passed up a female dog in order to get to Taco Bell food.

Alfaro was unable to arrange a meeting with the marketing department during March 1997 to present the Psycho Chihuahua materials. On April 4, 1997, however, Strategy made a formal presentation to Alfaro and his group using samples of uniform designs, T-shirts, food wrappers, posters, and cup designs based on the ideas discussed during the February 6, 1997, meeting. Alfaro and his group were impressed with Strategy’s presentation.

On March 18, 1997, Taco Bell hired a new advertising agency, TBWA Chiat/Day (“Chiat/Day”). Taco Bell advised Chiat/Day that it wanted a campaign ready to launch by July 1997 that would reconnect Taco Bell with its core group of consumers. Chuck Bennett and Clay Williams were designated as the creative directors of Taco Bell’s account.

On June 2, 1997, Bennett and Williams proposed a commercial to Taco Bell in which a male Chihuahua would pass up a female Chihuahua to get to a person seated on a bench eating Taco Bell food. Bennett and Williams say that they conceived of the idea for this commercial one day as they were eating Mexican food at a sidewalk cafe and saw a Chihuahua trotting down the street, with no master or human intervention, “on a mission.” Bennett and Williams contend that this image caused them jointly to conceive of the idea of using a Chihuahua as a way of personifying the intense desire for Taco Bell food. Williams subsequently wrote an advertisement script using a Chihuahua, which Taco Bell decided to produce as a television commercial.

When, in June 1997, Alfaro learned that Chiat/Day was planning to use a Chihuahua in a commercial, he contacted Hill again about the possibility of using Psycho Chihuahua. Hill passed Alfaro on to Chris Miller, a Taco Bell advertising manager and the liaison between Taco Bell’s marketing department and Chiat/Day. On June 27, 1997, Alfaro gave Psycho Chihuahua materials to Miller along with a note suggesting that Taco Bell consider using Psycho Chihuahua as an icon and as a character in its advertising. Miller sent these materials to Chiat/Day, which received them sometime between June 28 and July 26.

Taco Bell aired its first Chihuahua commercial in the northeastern United States in July 1997, and received a very positive consumer reaction [and] launched a nationwide advertising campaign featuring Chihuahua commercials in late December 1997.

Appellants brought suit in January 1998, alleging breach of implied-in-fact contract as well as various tort and statutory claims under Michigan and California law. Appellee filed a motion to dismiss, which the district court granted in part and denied in part …

Appellants assert that the district court erred in determining that novelty was required to sustain their contract claim. The district court found that Michigan law required appellants to prove the originality or novelty of their ideas in order to maintain their claims, concluding that appellants’ ideas were not novel because they “merely combined themes and executions that had been used many times in a variety of commercials for different products.” The district court thus granted summary judgment in favor of appellee on this alternative basis. We conclude that the district court erred in finding that Michigan law requires novelty in a contract-based claim.

Figure 4.2 “Psycho Chihuahua” and the Taco Bell chihuahua

The district court seems to have assumed, without further discussion, that if the novelty requirement applied to appellants’ conversion and misappropriation claims, it would also apply to appellants’ implied-in-fact contract claim.

Conversion is based on property law principles. Courts have usually refused to protect ideas on a property theory, but when they have, it has generally been subject to the requirements of novelty and concreteness … Most courts apply a different rule to contract claims, modifying the requirement of novelty in some circumstances and dispensing with it altogether in others. The reason for the distinction is this: property rights are rights against the world and courts are generally unwilling to accord that kind of protection to ideas; contract rights on the other hand are limited to the contracting parties and it should be for them to decide if an idea is sufficiently valuable to be purchased.

Nevertheless, many courts do require novelty in an action based upon an implied contract theory on the ground that there can be no consideration for an implied promise to pay if the idea does not constitute “property.”

Sarver v. Detroit Edison Co ., 51 N.W.2d 759 (Mich. App. 1997) tells us where Michigan likely stands on this issue. In Sarver , plaintiff brought an action against her employer seeking damages for conversion and breach of contract based on the allegation that defendant appropriated an idea which she submitted through an employee suggestion program. The court rejected plaintiff’s conversion cause of action finding that plaintiff’s idea “was neither novel nor unique” and “did not constitute property subject to a conversion cause of action.” The Sarver court went on to hold, however, that plaintiff had stated a breach of contract claim, stating “to the extent that plaintiff seeks compensation for formulating, drafting, and submitting her idea pursuant to defendant’s employee suggestion program, rather than for the idea itself, she has stated a breach of contract claim.” The Sarver court did not impose a requirement of novelty on plaintiff’s contract claim.

[The] Sarver court quoted with approval the decision of the Supreme Court of Alaska in Reeves v. Alyeska Pipeline Service Co . In Reeves , plaintiff had proposed the idea of creating a visitor center at a location where visitors could view the Alaska oil pipeline. He brought an action alleging tort and contract claims against the pipeline servicing company, which subsequently established such a visitor center. The Supreme Court of Alaska held that the element of novelty was not required for plaintiff’s implied contract claim:

Relying largely on cases from New York, Alyeska argues that novelty and originality should be required in an implied-in-fact claim. Reeves responds that we should follow California’s example and not require novelty as an essential element of this sort of claim. Idea-based claims arise most frequently in the entertainment centers of New York and California, but New York requires novelty, whereas California does not. We prefer the California approach. An idea may be valuable to the recipient merely because of its timing or the manner in which it is presented … Implied in fact contracts are closely related to express contracts. Each requires the parties to form an intent to enter into a contract. It is ordinarily not the court’s role to evaluate the adequacy of the consideration agreed upon by the parties. The bargain should be left in the hands of the parties. If parties voluntarily choose to bargain for an individual’s services in disclosing or developing a non-novel or unoriginal idea, they have the power to do so.

Reeves , 926 P.2d at 1130, 1141–1142. Since the Michigan court in Sarver quoted Reeves on the requirement of novelty in an action based on conversion and went on to hold that the plaintiff’s contract claim survived notwithstanding lack of novelty, we conclude that Michigan follows Reeves and the California cases which dispense with the requirement of novelty in actions based on implied-in-fact contracts …

While we conclude that Michigan would not impose a requirement of novelty in an action based upon a contract implied in fact, it does not appear that the result of this case would change even if Michigan were to follow the New York view, which requires only novelty to the defendant. Here, Taco Bell does not claim that it was aware of appellants’ ideas prior to disclosure. Accordingly, we find that the district court erred in granting summary judgment to the appellee on the ground that appellants failed to show that their ideas were novel or original.

The judgment of the district court is REVERSED.

Notes and Questions

1. Ideas versus trade secrets . What is the difference between an “idea,” such as the ideas shared in Nadel and Wrench , and a trade secret? Would you consider the ideas in these cases to constitute trade secrets? Would it have made a difference if the purveyor of the idea asked the recipient to sign a nondisclosure agreement? What if the recipient refused to sign? Should an idea’s status as a trade secret affect a court’s recognition of an implied license?

2. Industry practice . The Nadel court refers to trade practices in the toy industry. Why are those practices relevant? Would a court reach the same result in a different industry, say motion pictures or aerospace engineering?

3. Idea disclaimers . Some companies want to ensure that they are not obliged to individuals who pitch ideas to them. Consider the following disclaimer posted on the IBM website:

IBM does not want to receive confidential or proprietary information from you through our Web site. Please note that any information or material sent to IBM will be deemed NOT to be confidential. By sending IBM any information or material, you grant IBM an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that IBM is free to use any ideas, concepts, know-how or techniques that you send us for any purpose. Footnote 2

Why doesn’t IBM want your ideas? Would a disclaimer like IBM’s be appropriate in the motion picture industry? Would it be enforceable? Would the enforceability of such a disclaimer work differently depending on whether an idea submitter argued in contract versus property?

Another company, satellite provider EchoStar, explains the following in its idea submission policy:

EchoStar views patent protection as important for our own inventions and ideas as well as those you are offering to us. As a matter of policy, we normally receive unsolicited ideas from the general public only after the idea submitters have first taken steps to obtain patent protection for such ideas. We expect idea submitters to seek and rely wholly upon their patent rights, as defined by the claims of an issued patent, just as our company is required to do in order to protect its own rights. Footnote 3

How does EchoStar’s policy differ from IBM’s? Why do you think EchoStar adopted this approach? Which of these two policies, if either, would you advise a client to adopt?

4. Novelty . The court in Wrench holds that under Michigan law, following the California rule, novelty is not required to prevail on a breach of contract claim. For a property-based misappropriation claim, however, novelty would still be required. Is the idea of a clever, feisty chihuahua pitching Tex-Mex food novel enough to prevail on a misappropriation claim?

5. Rights against the world . The Wrench court notes that “property rights are rights against the world” (so-called erga omnes rights) whereas contract rights only affect the parties bound by the contract. Why does this distinction matter in deciding whether a novelty standard should apply?

6. State versus federal law . Does state or federal law govern the creation and interpretation of implied licenses pertaining to IP rights created under federal statute? In Foad Consulting Group, Inc. v. Musil Govan Azzalino , 270 F.3d 821 (9th Cir. 2001), a copyright case, the Ninth Circuit noted that:

while federal law answers the threshold question of whether an implied, nonexclusive copyright license can be granted (it can), state law determines the contract question: whether a copyright holder has, in fact, granted such a license. As a general matter, we rely on state law to fill in the gaps Congress leaves in federal statutes. Thus, where the Copyright Act does not address an issue, we turn to state law … so long as state law does not otherwise conflict with the Copyright Act. There is no reason we should treat implied copyright licenses any differently.

Not every circuit has addressed this issue. Do you think the Ninth Circuit’s reasoning in Foad should be followed elsewhere?

7. Parol evidence and implied licenses . Foad dealt with the application of California’s parol evidence rule to an implied copyright license. The parol evidence rule permits a court to consider evidence extrinsic to the four corners of a contract when the contract is ambiguous. But what is parol evidence when an implied (unwritten) contract is under consideration? Or, put another way, what is not parol when the contract itself is unwritten? The Ninth Circuit in Foad stated that “application of California’s parol evidence rule in interpreting a contract that a party purports to have granted an implied copyright license does not conflict with the Act or its underlying policies.” What does the court mean?

8. Idea registration . In Hollywood, aspiring screenwriters, directors and idea brokers regularly pitch ideas to movie studios and television networks. Generally, no contract is signed before or during a pitch, which can just as easily be made in a taxicab, a restaurant or even the proverbial elevator in a studio executive’s office. Footnote 4 So how do pitchers prevent their ideas from being stolen by their (sometimes less than ethical) recipients? One solution is idea registration. The Writers Guild of America, West (WGAW) Registry allows individuals, for a small fee, to upload and register their scripts, treatments, Footnote 5 lyrics, short stories, poems, commercials, drawings and written ideas. Such registration offers no explicit legal protection, as might a copyright registration, but it does provide some benefits to the registrant. As explained by WGAW:

The registration process places preventative measures against plagiarism or unauthorized use of an author’s material. While someone else may have the same storyline or idea in his or her material, your evidence lies in your presentation of your work. Registering your work does not disallow others from having a similar storyline or theme. Rather, registering your work would potentially discourage others from using your work without your permission.

Though the Registry cannot prevent plagiarism, it can produce the registered material as well as confirm the date of registration. Registering your work creates legal evidence for the material that establishes a date for the material’s existence. The WGAW Registry, as a neutral third party, can testify for that evidence. Footnote 6

Of course, the Library of Congress also permits the registration of most of these materials for a similarly low fee, and a copyright registration does afford the registrant some legal rights. Why might someone choose WGAW registration over copyright registration ?

10. “Handshake culture” under threat? California law requires lawyers’ contingency fee agreements to be in writing. In 2018, actor Johnny Depp sued his longtime attorney to recover an estimated $30 million in fees that Depp had paid the attorney since 1999. The reason? The agreement – which entitled the attorney to the customary 5 percent share of Depp’s earnings – was never put in writing. A Los Angeles trial judge agreed with Depp and ruled that the agreement between Depp and his attorney was not valid. The ruling was met with alarm by many in Hollywood, who bemoaned the death of the industry’s “handshake culture.” Footnote 7 Do you agree with the result of Depp’s action? Is “handshake culture” at risk? Is it worth saving? Why or why not?

Problem 4.1

Julia, who recently received her PhD in satellite engineering, has an idea for a method of increasing the bandwidth of satellite transmissions. Julia is currently looking for a job, and has not filed a patent application for her invention (nor has she developed it enough to satisfy the formal requirements to obtain a patent). In a job interview with Conic Dynamics Corp. (CDC), Julia describes her idea to Paul, one of CDC’s senior engineers. She tells him that she would be happy to work with him on improving her method if she is hired. Four weeks later, CDC informs Julia that she was not selected for the job. What legal recourse, if any, does Julia have in each of the following cases:

a. Julia hears nothing further from CDC, but a year after her interview an article describing her method is published in a technical journal. Paul is one of the article’s co-authors.

b. Two years after Julia’s interview, a friend informs her that he came across a patent application filed by CDC that claimed an invention remarkably similar to Julia’s method.

c. Given the facts in (a) and (b), assume that a week after Julia’s interview she received a letter from CDC stating that “CDC’s official policy, as described on its website, is that all ideas submitted to it automatically become CDC’s property and CDC will accept no obligations with respect to any submissions made to it unless the submission was requested in writing by a CDC representative.”

d. Would the result in (a) or (b) change if CDC began a research project based on the same idea one year before Julia’s interview?

e. Would the result in (a) or (b) change if Julia had given Paul a detailed set of diagrams and a written description of her method during the interview?

4.3 Implied Licenses and Commissioned Works

The cases in Section 4.2 address a situation in which an idea was submitted to a recipient and was used by the recipient in its business (the spinning toy idea in Nadel and the chihuahua restaurant promotion idea in Wrench ). In both cases, the principal question was whether the originator of the idea had either a claim (property or contractual) to compensation for the use of the disclosed idea. In this section we turn to the question of what implied right the recipient of an intellectual asset (in these cases, copyrighted material, but also potentially ideas, patented inventions, etc.) may have to use the asset after it is delivered, even if the recipient has not fully complied with its obligation to pay the originator.

I.A.E., Inc. v. Shaver

74 f.3d 768 (7th cir. 1996).

RIPPLE, CIRCUIT JUDGE

Architect Paul D. Shaver appeals the district court’s summary judgment ruling that there was no infringement of Mr. Shaver’s copyrighted schematic design drawings. The court concluded that Mr. Shaver had granted an implied nonexclusive license to utilize his drawings in the completion of Gary Regional Airport’s air cargo building. For the reasons that follow, we [affirm].

In July 1992, two construction companies formed a joint venture. I.A.E., Inc. and its president Ramamurty Talluri joined with BEMI Construction and its president William Brewer to become the I.A.E./BEMI Joint Venture (“Joint Venture”). On December 21, 1992, the Joint Venture entered into a contract with the Gary Regional Airport Authority (“Airport”) to design and to construct an air cargo/hangar building. Under the contract, Joint Venture was to provide all of the civil, structural, mechanical and electrical engineering services and architectural design services needed to construct the air cargo building.

In furtherance of that goal, Joint Venture subcontracted with Paul D. Shaver, an architect with extensive experience in designing airport facilities, to prepare the schematic design drawings for the airport building. The parties agree that there are four phases to the architectural design of a building: schematic design, preliminary design, final design and construction supervision. The schematic design documents are the product of the first phase of designing a building. They outline the scope of the project and are the basis of the owner’s approval for the building design. Schematic design documents are often used as a reference base for further design development.

Mr. Shaver’s letter of January 14, 1993, to Mr. Talluri, which constitutes the written contract between the architect and Joint Venture, contained Mr. Shaver’s agreement to prepare the schematic design drawings for the Airport building: “With the assistance of your office and the [Airport] staff, agreed design parameters can be established initially to permit the Project to proceed in a normal development manner.” The contract price for his services was $10,000 plus reimbursable expenses, less deductions for the participation of I.A.E.’s staff. The contract specifically set forth the services Mr. Shaver intended to perform:

To prepare, with the assistance of your office and BEMI, Inc., staff, standard Design Documents … which would describe the agreed scope of the Project, we estimate a 4–5 week period of time including two or three scheduled approval meetings with your office and [Airport] Authority personnel. These documents would consist of the following which are customarily prepared to describe the scope of the Project and also for general reference: Drawings, 5, Title Sheet, Site Plan, Floor Plans, Elevations and Building Sections Preliminary Construction Cost Estimate.

[W]e are prepared to complete the required Schematic Design Document preparation for $10,000 subject to adjustment with deductions resulting from participation of staff from your office and your Architectural associate …

Please advise us if you need any additional data concerning our understanding of the scope of work.

Mr. Shaver believed that, once a design had been approved, he would execute further written contracts for the remaining phases of the architectural work.

After Mr. Shaver attended several meetings with the Airport, he prepared his schematic design drawings of the proposed Airport building. He then delivered copies of his schematic drawings to the Airport, Joint Venture, and other parties involved in the Project. These drawings were submitted with a notice of copyright. The copyrights of those drawings, both as technical drawings and as architectural works, were effective June 2, 1993. Their validity has not been challenged. Mr. Shaver and Mr. Talluri later presented to the Airport the completed schematic designs. On February 22, 1993, the Airport approved one of them. Mr. Shaver was paid $5,000 of his fee on that date.

On March 1, 1993, Joint Venture retained H. Seay Cantrell & Associates (“Cantrell”) to perform the remaining architectural work for the air cargo building. When Mr. Shaver realized that he and his firm were no longer involved in the Project, he took two actions. On March 3, 1993, Mr. Shaver wrote to the Airport’s Executive Director, Levelle Gatewood, acknowledging that he and his staff were, “under the circumstances, no longer in a position to participate or contribute to the development of the east Air Cargo Building Project.” The letter, with enclosed copies of Mr. Shaver’s schematic design drawings, also stated:

We trust that our ideas and knowledge exhibited in our work will assist the Airport in realizing a credible and flexible use Cargo/Hangar facility.

Mr. Shaver’s second act, one week later, was to seek collection of the amount that Joint Venture still owed him for the services he had rendered and to notify Joint Venture that he intended to enforce his copyrights if necessary. Mr. Shaver, by his attorney, claimed that he was owed an additional $5,000 fee, plus his out-of-pocket expenses ($887.29), plus (a new claim) a $7,000 payment for the purported “assignment” of his copyright on the schematic design documents. The attorney’s letter of March 10, 1993 offered Mr. Talluri a settlement of Mr. Shaver’s claim against Joint Venture for $12,887.29. Mr. Talluri agreed to pay the contract costs, $5,887.29, as final payment. According to Mr. Talluri, Mr. Shaver “had never previously raised the issue of copyright, copyright infringement or his alleged entitlement to moneys, in addition to the contract amount, for ‘assignment’ of his copyright on the schematic design drawings.”

Once it was clear that Mr. Shaver and Joint Venture would not reach an accord concerning any amount still owing to Mr. Shaver under the contract, on August 5, 1993, I.A.E. and Mr. Talluri filed this action. They sought a declaratory judgment that they did not infringe any copyrights owned by Mr. Shaver and that they had a right to use Mr. Shaver’s drawings; they also sought damages. Mr. Shaver counterclaimed against I.A.E. and Mr. Talluri, seeking damages for copyright infringement and breach of contract. He also filed third-party complaints against Cantrell, BEMI and its president Mr. Brewer, and the Airport, alleging that all the named defendants had infringed his copyrights in the schematic design documents or that they had conspired to do so by copying and using elements of his design in the final bid documents for the Airport Project. Joint Venture and the Airport responded that they had used Mr. Shaver’s drawings only as Mr. Shaver had intended their use, to build the Airport’s air cargo building. All parties then filed cross-motions for summary judgment.

The district court granted summary judgment on the ground that there was no copyright infringement.

Proof of copyright infringement requires two showings: first, that the claimant has a validly owned copyright, and second, that the “constituent elements of the work that are original” were copied. The first element is not in contention; there is no challenge to the validity of Mr. Shaver’s copyrights. It is the second prong of infringement that is at issue; Mr. Shaver asserted that his work was copied. The district court determined, however, that the use of his works was permissible because Mr. Shaver had granted an implied nonexclusive license.

Figure 4.3 I.A.E. v. Shaver involved an architect’s plans for an air cargo building at Gary Regional Airport (now Gary/Chicago International Airport (GYY)).

A copyright owner may transfer to another person any of the exclusive rights the owner has in the copyright; however, such a transfer must be made in writing. 17 U.S.C. § 204(a). [The] “transfer of copyright ownership” is defined, in the Copyright Act, as an exclusive license or some other instrument of conveyance. The definition expressly excludes a nonexclusive license. Therefore, even though section 204(a) of the Copyright Act invalidates any transfer of copyright ownership that is not in writing, section 101 explicitly removes a nonexclusive license from the section 204(a) writing requirement. We turn, therefore, to the differences between exclusive and nonexclusive licenses.

In an exclusive license, the copyright holder permits the licensee to use the protected material for a specific use and further promises that the same permission will not be given to others. The licensee violates the copyright by exceeding the scope of this license. The writing requirement serves the goal of predictability and certainty of copyright ownership.

By contrast, in the case of an implied nonexclusive license, the licensor-creator of the work, by granting an implied nonexclusive license, does not transfer ownership of the copyright to the licensee. The copyright owner simply permits the use of a copyrighted work in a particular manner. In contrast to an exclusive license, a “nonexclusive license may be granted orally, or may even be implied from conduct.” … In fact, consent given in the form of mere permission or lack of objection is also equivalent to a nonexclusive license and is not required to be in writing. Although a person holding a nonexclusive license has no standing to sue for copyright infringement, the existence of a license, exclusive or nonexclusive, creates an affirmative defense to a claim of copyright infringement. The concept of an implied nonexclusive license has been recognized [by] the courts, including this one, which universally have recognized that a nonexclusive license may be implied from conduct. Indeed, implied licenses are like implied contracts, which are well recognized in the field of architecture. As the district court noted, the Ninth Circuit, in [ Effects Associates, Inc. v. Cohen, 908 F.2d 555 (9th Cir. 1990)], held that an implied nonexclusive license has been granted when (1) a person (the licensee) requests the creation of a work, (2) the creator (the licensor) makes that particular work and delivers it to the licensee who requested it, and (3) the licensor intends that the licensee-requestor copy and distribute his work.

In light of these principles, we now turn to the record before us. In our analysis, we find helpful, as did the district court, the opinion of our colleagues in the Ninth Circuit in Effects . In the case before us, [Shaver] maintains that his expectation was that he would be the architect who would be preparing the final drawings, presumably from his own preliminary drawings, to be used for the construction. We therefore must determine whether the record will support a determination that such an interpretation had any objective foundation.

Effects suggests several objective factors to guide the judicial inquiry as to whether an implied license exists: the language of the copyright registration certificate, the letter agreement, and deposition testimony; and the delivery of the copyrighted material without warning that its further use would constitute copyright infringement. When we apply these factors to the circumstances before us, we must conclude that there is no genuine issue of triable fact and that the district court concluded correctly as a matter of law that Mr. Shaver granted an implied nonexclusive license to Joint Venture.

Figure 4.4 Effects Associates involved the development of a gruesome special effect for the horror film The Stuff .

We note first that Mr. Shaver’s certificates of registration, entitling the drawings “East Air Cargo Building, Gary Regional Airport, Indiana: Not Yet Constructed,” state that copyrighted designs are to be used for the “Airport Facility.” We now turn to the language of the contract itself. The contract in this case was a letter written by Mr. Shaver. This letter, apparently in confirmation of an earlier telephone conversation, demonstrates that the relationship of independent contractor for the purpose of creating the preliminary drawings for the Airport Project existed between Mr. Shaver and Joint Venture. It defines his role in the Airport Project and, specifically, his “understanding of the scope of work”: preparation of the preliminary schematic design drawings … Mr. Shaver stated that his drawings are the type “customarily prepared to describe the scope of the project and also for general reference.” Mr. Shaver also quoted the consideration for his work, $10,000. Mr. Shaver’s statement that “agreed design parameters can be established initially to permit the Project to proceed in a normal development manner,” certainly suggests that he considered his contribution to be in furtherance of the entire Project. In short, his letter was clear, to-the-point, and unambiguous. No other work is listed; no expectation of a further role in the Project is mentioned in the contract. Therefore, although Mr. Shaver tells us that he anticipated he would be the architect to take the Project to completion, nothing in his contract gives the slightest indication of that belief. Although Indiana law allows contractual terms to be implied from the intent and action of the parties, the “intent relevant in contract matters is not the parties’ subjective intent but their outward manifestation of it.” Here the contract is clear.

The plain language of the contract is supported by common sense. As we have already pointed out, Mr. Shaver created a work – preliminary architectural drawings – and handed them over to the Joint Venture for use on the Airport Project. For that work the architect received $10,000 compensation. As the Ninth Circuit concluded in Effects :

To hold that Effects did not at the same time convey a license to use the footage in “The Stuff” would mean that plaintiff’s contribution to the film was “of minimal value,” a conclusion that can’t be squared with the fact that Cohen paid Effects almost $56,000 for this footage. Accordingly, we conclude that Effects impliedly granted nonexclusive licenses.

908 F.2d 555, 558. This understanding is reflected throughout the parties’ depositions and affidavits. Joint Venture clearly expected to use Mr. Shaver’s drawings for the Project. Mr. Talluri expected that Mr. Shaver’s schematic design drawings were to be used in the Airport Project for which they were intended and stated that the drawings were used only in that manner, despite the fact that Mr. Shaver was not the continuing architect .

Not only the language of the copyright registration certificates, the letter contract, and the depositions and common sense support the conclusion of the district court that the defendants had an implied nonexclusive license to use Mr. Shaver’s drawings in the Airport Project; Mr. Shaver’s actions and subsequent writing also unequivocally support that conclusion. Mr. Shaver delivered his copyrighted designs without any warning that their further use would constitute copyright infringement. In his March 3, 1993 letter, Mr. Shaver acknowledged that he was no longer a contributor to the Project’s development, but that he expected “that our ideas and knowledge exhibited in our work will assist the Airport in realizing a credible and flexible use Cargo/Hangar facility.” This statement, accompanied by the delivery of copies of his drawings, certainly constitutes a release of those documents to the Airport for its Project and clearly validates a determination that all the objective factors support the existence of an implied license to use Mr. Shaver’s drawings in the construction of the air cargo building.

On this record, we cannot conclude that Mr. Shaver has raised a genuine issue of material fact on the issue of the parties’ intent. His contention that he never intended to grant a license for the use of his drawings past the drafting stage unless he was the continuing architect is simply not supported by the record.

Mr. Shaver also makes several alternative arguments that accept the existence of a nonexclusive implied license, but suggest that, under the circumstances established by the record, it cannot be enforced. We believe that these arguments cannot be maintained in light of our analysis, but we shall address them briefly for the sake of completeness.

Mr. Shaver submits that, even if there was an implied license for the use of his drawings, the Airport, Cantrell and Joint Venture exceeded the scope of that license by allowing another architect, Cantrell, to use the designs. He relies on Oddo v. Ries , 743 F.2d 630 (9th Cir.1984). Oddo held that Ries, a publisher, had an implied nonexclusive license to use Oddo’s articles to create a particular book. However, Ries exceeded the scope of that implied license when it hired another writer and created a different work, one which included much new material written by the second writer as well as large portions of Oddo’s manuscript. By publishing the other writer’s book, which was distinct from the plaintiff’s manuscript originally licensed for use, the defendant exceeded the scope of the partnership’s implied license. In our case, however, the record contains written authorization for the use of Mr. Shaver’s copyrighted drawings to “describe the agreed scope of the Project” for Joint Venture and the Airport. The use of his drawings was therefore within the scope of that agreement. Mr. Shaver’s assertion that he did not grant the right to further use of his drawings unless he was the architect continuing the Project is simply not supported by the contract. Mr. Shaver’s reliance on Oddo is therefore of no benefit to him.

Mr. Shaver also asserts that, because only half of the contract sum was paid, the implied license “did not spring into existence.” In Effects , the Ninth Circuit rejected a virtually identical argument that there could be no implied license until the full payment of the contract price was made. That court recognized that the appellant was treating the complete payment of the contractual consideration as a condition precedent to the use of the copyrighted material. After noting that “conditions precedent are disfavored and will not be read into a contract unless required by plain, unambiguous language,” it found nothing in the agreement between the parties indicating such an agreement. Similarly, in the case before us, nothing in the contract or in Mr. Shaver’s later letter indicates that full payment was a condition precedent to the use of his drawings. In fact, he first distributed his drawings before any payment was made, and next handed them over to the Airport, with no mention of payment, after half the dollar amount of the contract had been tendered. Clearly at that point a license to use the drawings had impliedly been granted. Mr. Shaver did not state that failure to pay would be viewed as copyright infringement until the March 10, 1993 letter from his attorney.

Mr. Shaver created an implied nonexclusive license to use his schematic design drawings in the Airport Project. Accordingly, there was no infringement of Mr. Shaver’s copyrighted works. We conclude that, because there are no genuine issues of material fact before us, we must affirm the judgment of the district court.

Notes and questions

1. Contract versus property . In both Shaver and Effects , the customer of a commissioned work failed to pay the full amount due for the work, yet was found to have an implied license to use the work in the manner intended by the creator. Why wouldn’t the customer’s license be conditioned on making the full payment? Should it be? The court in Shaver wrote that “conditions precedent are disfavored and will not be read into a contract unless required by plain, unambiguous language.” Can an implied license have “plain, unambiguous language”? For a further discussion of license conditions versus contractual covenants, see Section 3.4 .

2. Scope of implied license . In Johnson v. Jones , 46 USPQ2d 1482 (6th Cir. 1998), the Sixth Circuit held that Johnson, an architect, did not grant an implied license for his client to alter and use his drawings. Johnson had submitted a draft contract containing the following language to his prospective client, Jones:

The drawings, specifications and other documents furnished by the Design/Builder are instruments of service and shall not become the property of the Owner whether or not the project for which they are made is commenced. Drawings, specifications and other documents shall not be used by the Owner on other projects, additions to this project, or … for completion of this Project by others, except by written agreement relating to use, liability and compensation.

Although Johnson began work, Jones did not sign the contract. Later, Johnson was terminated and Jones retained a different architect to complete the project. The new architect (Tosch) claimed that he had an implied license to use the drawings produced by Johnson, citing the Effects case. The court explained that:

In Effects , defendant, a movie-maker, asked plaintiff, a special effects company, to create footage to enhance action sequences in a film defendant was making. Unhappy with the footage provided by plaintiff, defendant paid only half of the expected amount. Subsequently, defendant incorporated plaintiff’s footage into the film and released the film to another company for distribution. The Effects court held that plaintiff had granted defendant an implied non-exclusive license to incorporate the footage into the film and then distribute the film.

The circumstances in Effects differ materially from those in the present case. Almost every objective fact in the present case points away from the existence of an implied license. Johnson submitted two AIA contracts, both of which contained express provisions that he would retain ownership of his drawings, and that those drawings would not be used for completion of the Jones house by others, except by written agreement with appropriate compensation. These contractual provisions, although never signed by Jones, speak to Johnson’s intent; they demonstrate that Johnson created the drawings with the understanding that he would be the architect in charge of the project. They further demonstrate that Johnson would not have allowed Tosch to finish the project using his drawings without a written agreement, and additional compensation.

How would you distinguish Johnson and Shaver , if at all? Which case do you feel better reflects the intentions of the parties ?

3. Implied rights to sublicense . An interesting twist on the implied license doctrine has arisen in the context of tattoos. Tattoos are generally understood to comprise artistic works in which the tattoo artist obtains copyright. However, courts have also held that the individual on whom the tattoo is placed has an implied license to reproduce the tattoo, for example, in photographic images of himself or herself. The issue has become commercially significant when tattoos are visible on the bodies of celebrities such as sports figures. In Solid Oak Sketches, LLC v. 2K Games, Inc ., 449 F. Supp. 3d 333 (S.D.N.Y. 2020), the court found that NBA players LeBron James, Eric Bledsoe and Kenyon Martin had implied licenses to display and reproduce their tattoos (all created by the same artist) “as part of their likenesses,” and that they were authorized to grant the NBA the right to license their likenesses, including the tattoos, to the producer of NBA-based video games.

Problem 4.2

Arti, a freelance graphic designer, is hired by a publisher to create the artwork for an undergraduate economics textbook. Arti produces the artwork and is paid $2,500, per their agreement, which is silent regarding copyright. Two years later, the publisher releases a second edition of the book. Because Arti is now working as a full-time employee of a rival publishing house, the publisher hires Bob to make slight revisions to the original artwork for the second edition. Two years after that, the book is ready for its third edition, and the publisher decides to modify the artwork further using its own in-house designer. Arti comes across a copy of the third edition online and realizes that the artwork has been altered without her consent. What legal remedies, if any, does Arti have against the publisher (assuming that she owns the copyright in the original artwork)?

Figure 4.5 NBA star LeBron James is reported to have twenty-four tattoos, many of which were created by LA-based artist gangatattoo.

4.4 Implied Licenses in Law

Mccoy v. mitsuboshi cutlery, inc., 67 f.3d 917 (fed. cir. 1995).

RADER, CIRCUIT JUDGE

Duncan McCoy, Alex Dorsett, and Alex-Duncan Shrimp Chef, Inc. (McCoy) sued Mitsuboshi Cutlery, Inc. (Mitsuboshi) and Admiral Craft Equipment Corp. (Admiral Craft) for infringing McCoy’s intellectual property rights and committing business torts. McCoy’s sales organization had hired Mitsuboshi to make and supply shrimp knives covered by McCoy’s patent and trademarks. When Mitsuboshi produced the knives, McCoy refused to pay for them. Mitsuboshi resold the knives to Admiral Craft. McCoy sought damages from Mitsuboshi and Admiral Craft for selling the knives to third parties. Admiral Craft settled with McCoy before trial.

McCoy owns U.S. Patent No. 4,759,126 on a shrimp knife that peels, deveins, and butterflies in one motion. McCoy arranged for Mitsuboshi, a Japanese knife manufacturer, to produce shrimp knives embodying the patented invention. At McCoy’s request, Mitsuboshi stamped the knives with McCoy’s registered U.S. Trademarks Nos. 1,687,589 and 1,702,878. From 1988 to 1990, Mitsuboshi manufactured and sold large quantities of these knives to McCoy.

In 1991, McCoy’s separate marketing organization, A.T.D. Marketing, Inc. (ATD), ordered 150,000 of the knives from Mitsuboshi. Mitsuboshi produced the knives. When Mitsuboshi timely offered the knives, ATD refused to accept or pay for them. ATD’s refusal left Mitsuboshi holding the 150,000 knives in its warehouse in Japan. The record contains no suggestion that the knives were defective.

McCoy acknowledged its responsibility for ATD’s refusal to pay. McCoy, however, accepted and paid for only about 20,000 of the 150,000 knives ordered. McCoy refused to pay for the other 130,000 knives. On the basis of these facts, the jury found that McCoy breached its contract with Mitsuboshi. McCoy did not appeal this jury verdict.

Following McCoy’s partial payment, Mitsuboshi continued to negotiate for payment and delivery of the remaining 130,000 knives. McCoy, however, remained silent, unable to pay for them. In the face of this silence, Mitsuboshi repeatedly notified McCoy of its intent to resell the knives to mitigate damages. At length, Mitsuboshi sold 6,456 of the knives to Admiral Craft, a mail-order wholesaler of restaurant supplies. Admiral Craft sold 958 of the knives in the United States to restaurants and supply houses in 1993 through its mail catalog.

McCoy sued Mitsuboshi and Admiral Craft for patent and trademark infringement, unfair competition in violation of both federal and Texas law, and several Texas state law torts. Admiral Craft settled, but Mitsuboshi persevered, counterclaiming for breach of contract. At the close of evidence, Mitsuboshi moved for judgment as a matter of law that it was entitled to resell the knives. The trial court denied Mitsuboshi’s motion. The jury found against Mitsuboshi on the infringement, unfair competition, and tortious interference counts, and for Mitsuboshi on the breach of contract count. Mitsuboshi then renewed its motion for judgment as a matter of law. The trial court again denied the motion. Mitsuboshi appeals.

The jury found, and McCoy does not contest, that McCoy breached its contract with Mitsuboshi. This appeal thus raises the purely legal question of the effect of McCoy’s breach on his intellectual property rights in the knives. This court confronts this question for the first time.

A patent confers on its holder the right to exclude others from making, using, or selling what is described in its claims. This court has recognized that these intellectual property rights, like any other property rights, are subject to the contractual obligations of their owner and the applicable law:

Th[e] right to exclude may be waived in whole or in part. The conditions of such waiver are subject to patent, contract, antitrust, and any other applicable law, as well as equitable considerations such as are reflected in the law of patent misuse. As in other areas of commerce, private parties may contract as they choose, provided that no law is violated thereby.

Mallinckrodt, Inc. v. Medipart, Inc ., 976 F.2d 700, 703 (Fed.Cir.1992). Thus, a patent or trademark owner may contract to confer a license on another party. In most instances under contract law, a patent or trademark owner intentionally creates an express license. A licensee, of course, has an affirmative defense to a claim of patent infringement.

In some circumstances, however, the entire course of conduct between a patent or trademark owner and an accused infringer may create an implied license. The Supreme Court stated:

Any language used by the owner of the patent or any conduct on his part exhibited to another from which that other may properly infer that the owner consents to his use of the patent in making or using it, or selling it, upon which the other acts, constitutes a license and a defense to an action …

De Forest Radio Tel. Co. v. United States , 273 U.S. 236, 241 (1927). When warranted by such a course of conduct, the law implies a license.

Figure 4.6 The patented shrimp knife and deveiner at issue in McCoy .

Whether express or implied, a license is a contract “governed by ordinary principles of state contract law.” Moreover the law may imply licenses “to make effective the contracts of the patentee.” An implied license, however, must not exceed the limits necessary to make the contract effective.

To enforce the contracts of the patentee, the law may imply a license where a patent holder sells or authorizes the sale of a patented product – a voluntary sale. Thus, “an authorized sale of a patented product places that product beyond the reach of the patent.” Under this implied license, a patent holder receives a reward for inventive work in the first sale of the patented product. As the Supreme Court stated:

Patentees … are entitled to but one royalty for the patented machine, and consequently when a patentee has himself constructed the machine and sold it, or authorized another to construct and sell it, or to construct and use and operate it, and the consideration has been paid to him for the right, he has then to that extent parted with his monopoly, and ceased to have any interest whatever in the machine so sold or so authorized to be constructed and operated.

Bloomer v. Millinger , 68 U.S. (1 Wall.) 340, 350 (1863).

In some cases, the law implies a license where a patent holder does not authorize the sale of a patented product – an involuntary sale. See, e.g., Wilder v. Kent , 15 F. 217, 219 (C.C.W.D.Pa.1883). For example, in Wilder , the patent holder sued an individual for infringement who purchased a machine at a sheriff’s sale. The court dismissed the complaint finding the purchaser had acquired the right to use the patented machine through the purchase at the sheriff’s sale. The court reasoned: “To deny to the sheriff’s vendee the right to use such machine would in effect prevent its sale upon an execution at law … and practically withdraw it from the reach of the owner’s execution creditors.” While appreciating the unique nature of patent rights, the court noted that “a patented machine is susceptible of manual seizure, and the unrestricted sale thereof does not involve the transfer of any interest in the patent.”

Justice Story [in Sawin v. Guild , 21 F.Cas. 554, 554–55 (C.C.D.Mass.1813)] reasoned that statutes must be construed where possible to avoid introducing “public mischiefs, or manifest incongruities.” Justice Story felt a great public mischief would result if courts construed the patent laws to permit an action against a sheriff for selling a patented product at a sheriff’s sale.

More recently, in an opinion authored by Judge Friendly, the United States Court of Appeals for the Second Circuit expressly recognized and extended this implied license doctrine to the sale of products by an aggrieved seller to remedy a buyer’s breach. Platt & Munk Co. v. Republic Graphics, Inc ., 315 F.2d 847 (2d Cir.1963). Platt & Munk owned copyrights on educational toys and contracted with Republic to supply them. After Republic began delivery, Platt & Munk alleged various defects and refused to pay for the balance of the toys. Republic then informed Platt & Munk of its intent to resell the toys to recover its production costs. Platt & Munk responded by seeking an injunction prohibiting Republic from reselling the toys without Platt & Munk’s consent. The trial court granted a preliminary injunction without addressing whether the toys were actually defective or whether Platt & Munk had the right to refuse payment. Republic filed an interlocutory appeal.

The Second Circuit remanded to the trial court to determine whether Platt & Munk justifiably refused to pay for the toys. If not, it instructed the trial court to lift the injunction. In other words, if Platt & Munk breached the contract, Republic had a right to resell the toys notwithstanding any copyright protection. The Second Circuit based its holding on New York contract law, which provided a seller of goods the right to mitigate damages for contract breaches. Where Platt & Munk breached, the Second Circuit found that Platt & Munk’s copyrights had no effect on Republic’s state law right to resell:

We see no reason why the copyrighted character of the goods should preclude [resale] when – and the qualification is vital – the person for whom the goods were being made unjustifiably refuses to pay the price.

Platt , 315 F.2d at 855.

This ruling extended the implied license doctrine beyond sales under judicial decree to sales under self-help provisions in commercial law. Together, [these cases] demonstrate that the law may create an implied license to enforce the contract obligations of the patent holder and recognize legal rights of aggrieved parties … Absent an implied license in either case, patent holders could frustrate otherwise available commercial remedies.

Here, McCoy and Mitsuboshi had a long-standing business relationship whereby Mitsuboshi manufactured McCoy’s patented knives. In 1991, McCoy placed a purchase order for 150,000 knives with Mitsuboshi. Mitsuboshi, in turn, accepted the order and performed its obligations under that agreement. When it tendered the knives to McCoy, McCoy breached the contract by failing to pay. At that point, rather than immediately act, Mitsuboshi continued to negotiate with McCoy in an effort to secure payment and deliver the knives. After repeated failed attempts, Mitsuboshi sold some of the knives to an American company.

The applicable state contract law in this case is Texas’s version of the Uniform Commercial Code. Because this case involves the sale of goods, the Texas UCC entitles the seller to resell the goods upon the buyer’s wrongful refusal to pay. Consequently, under Texas contract law, when McCoy breached the contract, Mitsuboshi had a right to resell the knives to recoup its losses without McCoy’s consent.

As in Platt , an implied license properly enforces McCoy’s contractual promise to pay for the knives, reflects Mitsuboshi’s commercial efforts to resolve the matter, and recognizes Mitsuboshi’s rights to mitigate under the Texas UCC. This court, like our sister circuit in Platt , sees no reason why the owner of intellectual property rights deserves to evade application of the ordinary contract remedy of resale for an unjustified refusal to pay.

This implied license does not offend the protection afforded patent and trademark rights by federal law. Instead, licenses, like other federal property and contract rights, conform to the applicable state laws. As this court observed in Power Lift , the Supreme Court has held that federal patent law does not preempt enforcement of contracts under state law. By the same reasoning, federal trademark law does not preempt contract enforcement either. Intellectual property owners “may contract as they choose,” but their intellectual property rights do not entitle them to escape the consequences of dishonoring state contractual obligations.

1. Public mischiefs and manifest incongruities . Judge Rader’s reasons for recognizing an implied license in Mitsuboshi are somewhat unclear. He first references Bloomer v. Millinger and Wilder v. Kent , two obscure nineteenth-century cases that relate to the creation of an implied license accompanying sale of patented products, a doctrine that today has largely been subsumed by the doctrine of patent exhaustion (see Chapter 23 ). He next cites the even older case of Sawin v. Guild , in which Justice Story justified the recognition of an implied license so as to avoid “public mischiefs” and “manifest incongruities,” a sort of public interest analysis that never gained significant purchase in patent law. Footnote 8 Finally, Judge Rader leaps forward by more than a century to Platt & Munk , in which the Second Circuit held that New York contract law concerning the mitigation of damages preempted any right that the holder of a copyright might have to prevent the resale of copyrighted toys. Which of these prior cases is most relevant to the facts in Mitsuboshi ? Why do you think that Judge Rader felt the need to ground his decision in nineteenth-century decisions such as Bloomer , Wilder and Sawin ?

2. Implied in fact or implied in law? There are two general species of implied license: those that are implied in fact and those that are implied in law. As explained by Professor Annemarie Bridy,

The existence of a license … implied in fact … is inferred from objective indicia that the work’s creator assented to and intended the defendant’s use of the work. In order to prove an implied-in-fact license, the defendant must make a showing of permissive intent on the rights holder’s part. Footnote 9

A license implied in law, on the other hand, arises solely through operation of law, without reference to the contracting intentions of the parties:

To prove the existence of an implied-in-law contract (or quasi-contract), there is no need for the proponent to prove that her counterparty had contractual intent. Rather, the court imposes a contractual duty on the counterparty in order to prevent injustice to the proponent. The theory is equitable and nonpromissory, resting on the principle that one party should not be unjustly enriched at the expense of another. Footnote 10

Applying this classification scheme, how would you characterize the implied licenses in Nadel , Wrench , Shaver and Mitsuboshi ?

3. Later-issued patents . In TransCore, LP v. Elec. Transaction Consultants Corp ., 563 F.3d 1271 (Fed. Cir. 2009), TransCore, the holder of patents covering the E-ZPass automatic toll-collection device, settled patent litigation with Mark IV Industries, a competing manufacturer. Under the settlement agreement, TransCore granted Mark IV a license under three issued patents. Several years later, Mark IV brought suit against ETC, an installer of toll-collection devices sold by Mark IV, under a number of patents, including a newly issued patent (the ’946 patent, a “continuation” of one of the licensed patents) that covered the subject matter of the patents licensed to Mark IV. Because the ’946 patent had not issued at the time of TransCore’s settlement with Mark IV, it was not included in the settlement agreement. Mark IV argued, however, that it had an implied license under the ’946 patent. The Federal Circuit agreed, noting that the ’946 patent “was broader than, and necessary to practice, at least the ’082 patent that was included in the TransCore–Mark IV settlement agreement.”

[T]he district court properly concluded that in order for Mark IV to obtain the benefit of its bargain with TransCore, it must be permitted to practice the ’946 patent to the same extent it may practice the ’183, ’275 and ’082 patents. TransCore is, therefore, legally estopped from asserting the ’946 patent against Mark IV in derogation of the authorizations granted to Mark IV under the ’183, ’275 and ’082 patents. And Mark IV is, in turn, an implied licensee of the ’946 patent.

Why does the court find such an implied license? What injustice would be done if no implied license were recognized?

4. No implied rights clauses ? What if the parties to a licensing agreement, such as the ones in Mitsuboshi or TransCore , agreed to a contractual clause excluding any implied licenses? Can a court still recognize an implied license? The answer seems to be yes. In TransCore , the TransCore–Mark IV settlement agreement contained the following language: “No express or implied license or future release whatsoever is granted to MARK IV or to any third party,” 563 F.3d at 1272. In addition, the parties made sure, they thought, that the license granted under the three specified patents would not be expanded to include future patents, agreeing, “This Covenant Not To Sue shall not apply to any other patents issued as of the effective date of this Agreement or to be issued in the future.” So how did the court find an implied license that applied to a patent “issued in the future”? It reasoned that not recognizing an implied license to the ’946 patent would “permit TransCore to derogate from the rights it has expressly granted” – in effect selling a right, then taking back part of what it has sold.

The Federal Circuit cabined the reasoning of TransCore in Endo Pharms., Inc. v. Actavis, Inc ., 746 F.3d 1371 (Fed. Cir. 2014), another case involving a license and a later-issued patent. As in TransCore , the license agreement in Actavis contained a “No Implied Rights” clause. But this time the Federal Circuit gave more weight to the clause, as well as the fact that the newly issued patent in Endo was not a continuation of one of the licensed patents, as it was in TransCore . It held that “The lack of a continuation relationship between any of the asserted and licensed patents and explicit disclaimer of any other licenses not within the literal terms of the contract are dispositive,” 746 F.3d at 1378. What do you make of this distinction? Does it matter that the court in TransCore made little of the fact that the ’946 patent arose from a continuation application? Should this really be the dispositive factor in implied license cases?

5. Scope of implied license . Once an implied license is recognized, what is its scope? The court in TransCore held that “Mark IV’s rights under its implied license to the ’946 patent are necessarily coextensive with the rights it received in the TransCore–Mark IV license agreement,” 563 F.3d at 1279–80. Why is this scope appropriate? What happens to the implied license when the originally licensed patents expire?

Figure 4.7 The dispute in TransCore v. Elec. Transaction Consultants involved patents covering E-ZPass electronic tollbooth devices.

In the copyright cases discussed in Section 4.3 , Note 2, the result is less clear. Which approach is the better one? Should the basis on which an implied license is found affect the scope of the implied license ?

6. An implied license in oneself ? In recent years, celebrities, including Gigi Hadid and Khloe Kardashian, have been sued for copyright infringement when they have publicly posted photographs of themselves taken by paparazzi. In these suits, the paparazzi claim that the celebrities are infringing their (the paparazzi) copyrights in the photographs, as the copyright in a photograph is held by the photographer, even if it was taken without the permission of the celebrity. Professor Annemarie Bridy has argued that celebrities like Hadid should have a license implied in law to post photographs of themselves on social media:

Paparazzi photography is the product of a culture that worships and commoditizes glamour and celebrity. It is, at its base, a form of celebrity exploitation. The value of a paparazzi photo derives less from the photographer’s creative choices, which copyright is designed to protect, than from the celebrity of its subject, which is not copyright’s concern. In paparazzi photos, the photographer’s creative rights and the subject’s publicity rights are entangled. Equity suggests that the primary source of a paparazzi photo’s value, its famous subject, should be entitled to share in that value to some extent.

Hadid’s contributions to the photo’s aesthetic and commercial value seem on par with – if they don’t actually exceed – the photographer’s own contributions in this particular case. Yet the photographer sought to extract damages from Hadid for her limited use of the photo on her own Instagram account. To deny Hadid a limited implied license to use the photo at issue in the suit would arguably be unjust, considering both the significance of her contribution to its value and the fundamentally exploitive nature of paparazzi photography. Footnote 11

Do you agree with Professor Bridy’s theory? How are unauthorized celebrity photographs similar to McCoy’s shrimp peelers ?

1 Raymond T. Nimmer & Jeff Dodd , Modern Licensing Law § 10.02 ( Thomson Reuters , 2016 –17) .

2 IBM, Terms of Use, August 15, 2015, www.ibm.com/legal (visited August 17, 2020).

3 Echostar, Unsolicited Ideas Policy Statement and Agreement.

4 Take the example of Robert Kosberg, known as Hollywood’s “Mr. Pitch.” Each year, Kosberg pitches twenty to fifty ideas for new films to major motion picture studios, of which he sells about eight. He sold New Line Cinema an idea for a horror film about a rampaging dog that he described as “Jaws on Paws.” The film became Man’s Best Friend . In one case, a grandmother from Ozark, Arizona, sent Kosberg a 3" × 5" card suggesting a story about a man who lives in the Statue of Liberty. He fleshed out the story and sold it to Polygram as “Keeper of the Flame.” Kosberg paid the originator of the idea about $100,000. See Anna Muoio , Meet Hollywood’s Mr. Pitch , Fast Company, October 1999 , p. 124 .

5 A “treatment” is a short (usually 1–3 pages) summary of the major characters and plot elements of a story intended for film or television.

6 www.wgawregistry.org/regfaqs.html#quest2 (accessed August 21, 2018).

7 See, e.g., Sara Randazzo , Ruling in Johnny Depp Lawsuit Threatens Hollywood Lawyers’ Handshake Culture , Wall St. J., August 29, 2018 .

8 Justice Story is famous for introducing moralistic elements into his patent law decisions, most notably the “moral utility” doctrine. See Bedford v. Hunt , 3 F. Cas. 37, 37 (C.C.D. Mass. 1817) (Story, J.) (the utility requirement of patent law “simply requires, that [an invention] shall be capable of use, and that the use is such as sound morals and policy do not discountenance or prohibit”).

9 Annemarie Bridy , A Novel Theory o f Implied Copyright License i n Paparazzi Pics, Law360, August 6, 2010 .

10 Footnote Id.

11 Footnote Id.

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Implied Licenses and Unwritten Transactions
Jorge L. Contreras , University of Utah
Book: Intellectual Property Licensing and Transactions
Online publication: 21 June 2022
Chapter DOI: https://doi.org/10.1017/9781009049436.005

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Implied assignments - not so innocent

In November last year, Deepend Fresh Recovery Limited, the successor in title to the design firm that created the 'halo' logo as used by the smoothie maker Innocent, was successful in its bid to cancel two Community Trade Mark registrations owned by Fresh Trading Limited (which owns the Innocent business). This case is yet another example of how strictly the law can operate against brand owners where the ownership of intellectual property has not been properly dealt with at the outset.

The case was heard in the Cancellation Division of the Office for Harmonization in the Internal Market (OHIM), which oversees Community Trade Marks. OHIM made it clear that copyright subsisted in the 'halo' logo. There was no evidence of any written agreement between the parties, and so no evidence of any assignment of the copyright in the 'halo' logo to Fresh Trading. As such, OHIM ruled that Deepend Fresh Recovery was the legal owner of that copyright work.

Deepend Fresh Recovery relied on Art. 53(2)(c) of Council Regulation (EC) No 207/2009 (CTMR) 'a community trade mark shall be declared invalid on application to the Office where the use of such trade mark may be prohibited pursuant to a copyright under national law governing its protection' . Successfully arguing that use of the 'halo' logo could be prohibited in the UK on the basis of its copyright in the original 'halo' design. OHIM held that both marks infringed the 'halo' design prima facie.

The interesting part of this case relates to Fresh Trading's defence. Fresh Trading tried to rely on the UK case, Griggs v Ross Evans (the 'Doc Martens Case') where the court of appeal was happy to impose an implied term within an existing commissioning agreement, requiring assignment of the copyright in the DR MARTENS AIRWAIR logo from the designer to Griggs. It was held that this was necessary to give commercial effect to the original agreement to design a corporate logo for Griggs. Perhaps surprisingly, OHIM did not follow this approach and did not imply an assignment from Deepend to Fresh Trading.

However comparing the facts of the cases perhaps this is not so surprising. In this case OHIM would need to have inferred an implied contract between the parties, as well as a term to assign the copyright, unlike in the Doc Martens Case where there was a written agreement. Also, Deepend had not received any remuneration for its work, which was a factor that was emphasised in the Doc Martens Case, where the designer had been paid for his work.

The moral of this story is that, when commissioning a designer or any other services provider, do not rely on the courts implying an assignment to you. Make sure you obtain an express assignment of the copyright in that work. This applies not just to logos but to anything designed or created by a third party for your business including website development, articles, brochures and magazines

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Implied Assignments

by Julia House | Apr 22, 2013

Rights in intellectual property allow for creativity and innovation to be owned in the same manner as physical property. However, in contrast to the ownership of physical property which is often clear cut, it is often more difficult to determine who is the owner of an idea. This is particularly true of ‘logo’ (figurative) trademarks. Often the trademark owner may differ from the company or person that is deemed to be the owner of any copyright in a logo. For example, if a trademark has been created by a design company, there may be a possibility that copyright resides in the design company. In this situation, an assignment may be required to transfer the copyright. As illustrated by the case below, the Courts are unwilling to imply assignments.

The design company Deepend Fresh Recovery Limited (Deepend) was approached by Fresh Trading Limited (Fresh) to create a brand for its smoothie products (the well-known Innocent brand). In 1998, the two companies had drawn up Heads of Terms whereby it was stated that Deepend would be remunerated for its work by receiving shares in Fresh. There is some dispute between the parties as to whether a binding agreement was concluded.

When Deepend went into liquidation in 2001, it received no payment for the design work for Fresh Trading nor did it receive any shares in the said company. Under an assignment dated 10/10/2007, the copyright in “halo” logo was assigned from Deepend to Mr Andrew Chappell, who in 2009 validly assigned the copyright to Deepend. Deepend applied to cancel two of Fresh’s CTM Registrations for the “halo” logo on the grounds that they had copyright in the original design and therefore use of the trademarks could be forbidden.

OHIM’s decision

The case was heard in OHIM’s Cancellation Division. OHIM found that copyright subsisted in the “halo” logo and that since it was created by an employee of Deepend, without any agreement to the contrary, the first ownership of the copyright belonged to Deepend. Although the issue of assignment was addressed in the ‘Heads of Term”, the document was never signed, hence, assignment of copyright was not effective.

Deepend relied on Art. 53 (2)(c) of Council Regulation (EC) No 207/2009 (CTMR) “A Community trademark shall also be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings where the use of such trademark may be prohibited pursuant to a copyright under the Community legislation or national law governing its protection.” OHIM held that both Fresh’s trademarks therefore infringed the “halo” design prima facie.

In its defence, Fresh, tried to rely on the case Griggs v Ross Evans where the Court of Appeal was willing to impose an implied term within the existing commissioning agreement, requiring assignment of the copyright in the DR MARTENS AIRWAIR logo from the designer to Griggs. The Court held that the implied term was essential in order to give commercial effect to the original agreement to design a logo for Griggs.

This approach was not followed by the Cancellation Division. The court found that unlike Griggs, there was no written agreement and therefore they would need to infer an implied contract between the parties containing a term to assign the copyright to Fresh. Furthermore, a factor highlighted by the Court of Appeal in Griggs was that the designer had been remunerated for his work whereas Deepend had not been paid for its work.

From the above case it can be seen that if a trademark is the product of a design company, and copyright resides in the work, it is imperative to obtain an express assignment of the copyright in that work. Failure to do so, may result in cancellation of your trademark should the proprietor of the copyright work raise objections to use/registration of your trademark.

For more information on assignments and ownership issues… Why not contact Albright IP and let us help you?

The trademark attorneys at Albright IP can advise you on how best to protect your brand and the likelihood of encountering an objection or challenge post filing. Simply fill out the contact form on the left hand side of this page. Alternatively, give us a call.

Julia is a very experienced practitioner and a Trademark Partner. She is able to call upon a wealth of knowledge acquired in-house and in private practice; making her well-placed to provide informed, commercial advice in relation to the issues at hand. Julia qualified as a British and European Trademark Attorney in 1991.

The Difference Between Copyright Assignments and Licenses

The Difference Between Copyright Assignments And Licenses

There are two ways that a copyright owner can transfer some or all of his or her copyright rights: through a license or an assignment.

In an assignment of copyright rights, the owner sells his or her ownership rights to another party and has no control over how the third party uses those rights. A copyright assignment is sometimes referred to as a sales agreement for copyright.

The buyer (assignee) can then use the copyrighted work or do whatever he or she wants with it. He or she all of the assigned rights that the original owner had.

A valid assignment of copyright must be in writing and signed by, or on behalf of, the copyright owner/assignor. The subject of the assignment must be clear as to what copyright is being assigned in which work(s).

In a license of copyright rights, the owner maintains his or her copyright ownership rights, but allows another party (the licensee) to exercise some of those rights without the licensee’s actions being considered copyright infringement. A license is often preferred over an assignment when the copyright holder wishes to maintain and exercise some ownership control over the rights and how the licensee uses the copyright holder’s rights.

For example, a typical software license agreement is a copyright license agreement. The software copyright owner grants the user/licensee the right to use the software in a specified, restricted manner. In return, the user/licensee may agree to limit his or her use of the software in various ways and to pay the copyright owner a license fee.

Unlike a copyright assignment, a copyright license does not have to be in a signed writing. A license can be oral or arise by implication when considering all of the facts and circumstances surrounding the transaction between the copyright owner and the purported licensee.

If you own a copyright in a work that you are thinking about assigning, you should consider whether to license your copyright instead, thus allowing you to retain ownership, and license only certain rights to the other party.

For additional information about the difference between copyright assignments and license, please contact us .

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Beware of copyright when considering existing planning permission

02 March 2017

The recent judgment in Signature Realty Ltd v Fortis Developments Ltd & Anor is an excellent example of the application of copyright in a planning and building context.

Originality, infringement, planning ahead.

This decision is a useful reminder to:

a) Architects, as it demonstrates how they can enforce their rights in circumstances where a new developer takes over a project and wants to use a different architect. Architects should always include copyright notices on their drawings and keep an eye out for developments using planning permission they worked on and where the ownership of the land in question changes hands;

b) Buyers of land with the benefit of planning, to ensure they take an assignment of the copyright or, more commonly, obtain a licence to use relevant drawings; and

c) Those seeking planning permission, to secure a copyright licence that is capable of assignment or grant of sub-licence.

Destruction of the building was not sought in this case, however, it will be of comfort to landowners that it was accepted that injunctive relief in these circumstances should not interfere with the continued use of the building. The judge refused to grant an injunction at all as there was no legitimate interest to protect, despite the fact that historic infringements remained on the internet.

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Copyright Licenses and Assignments (BitLaw)
An assignment of copyright rights is like the sale of personal property. The original owner sells its rights to a third party, and can no longer exercise control over how the third party uses those rights. ... Implied Licenses. An implied copyright license is a license created by law in the absence of an actual agreement between the parties ...
Assignment of Copyrights & Legal Implications
Assignments can be used for many different purposes, such as security for debt, as an asset passed to heirs, or as part of the distribution of assets after a bankruptcy proceeding. Once you assign your rights to somebody else, however, you are permanently giving away your right to control the work. That means if you try to exercise any of the ...
PDF Copyright Assignment & Guidelines
Identifies the document as a copyright assignment. Write in the date on which the document is effective (usually the date that it is signed). Identify the parties and, if applicable, what type of organization(s) they are. Note that each party is given a name (e.g., "Assignor") that will be used throughout the agreement.
Put it in writing: copyright licences and implied terms
Where alternative terms are possible, the choice between them must favour the least that is necessary in the circumstances. In the context of a copyright licence, this will mean implying a bare licence; failing that, an exclusive licence may be implied and in unusual circumstances (Griggs, for example), an assignment of the copyright may be ...
What Is Assignment and Licensing under Copyright Law?
With a license, the copyright owner retains their ownership of any right that is transferred. An assignment, on the other hand, transfers all exclusive rights and is comparable to a sale. The original copyright owner basically sells their rights to another person or entity who then essentially owns them. When an owner assigns their rights to ...
Assignment of Copyright
The term "copyright assignment" describes the transfer of ownership or rights in a work that has been granted copyright from the original copyright holder (the "assignor") to a different party (the "assignee"). Through a legal procedure, the assignor gives up their ownership of the work and gives the assignee the only authority to ...
Understanding an assignment of copyright agreement
This document usually contains only limited details of the work you're assigning, including the copyright number (if applicable), the signatures of both parties, the signature of a witness if desired, and the date of the assignment.
PDF "What Exactly Are You Implying?": the Elusive Nature of The Implied
nto his film, a process that presumably involved the making of copies that reproduced it. The making of such copies is an act. hat falls within the exclusive right accorded to copyright owners by 17 U.S.C. § 106(1). Cohen then gave copies of the film to New World Entertain. ent for distribution, thus tre. ding withi.
Implied Licenses in Copyright Law
An implied license, if it exists, must, by definition, be non-exclusive because U.S. copyright law requires exclusive licenses to be in writing. Courts have differed in the tests they use for implying a copyright license. Some courts use a three-step test that largely developed out of situations where the parties had an express agreement in ...
Implied license doctrine in copyright law: A typological framework
Traditionally, the implied copyright license doctrine falls under contract law, ... even in the absence of an assignment or exclusive licensing instrument. The court stated that an implied license is much like an implied-in-fact contract. Without a term in the contract granting such use, the footage that Cohen commissioned would be "of ...
Chapter 2. Copyright Ownership and Transfer
— In the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination under the following conditions:
Understanding the Key Elements of a Copyright Assignment Agreements
Outline the key terms in a copyright assignment agreement. Explain the concept of the "work made for hire". Describe the rights the assignee will receive. Explain the duration of the copyright. Outline the rights retained by the assignor. Describe the potential risks involved in a copyright assignment.
Copyright Assignment Agreement: Definition & Sample
A copyright assignment agreement is a legal document transferring the ownership and rights of a specific creative work or works. A copyright assignment agreement protects the rights of parties involved by clarifying and providing a record of ownership of a work, especially in the event of a transfer. Notarization of a copyright assignment ...
Understanding Assignment of Copyright
An assignment is, in spirit, a transfer of ownership, even if it is partial. The copyright owner in an existing work or the future owner of the copyright in a further work may assign to any person the copyright either wholly or partially, either generally or subject to limitation, either for the whole of copyright or any part thereof.
Copyright Assignments
For any third party to own or enforce a copyright, a properly executed copyright assignment must be made. The basics for copyright ownership and enforcement include: Document a copyright assignment to clearly define rights and ownership; Obtain a registration of the copyright to be able to litigate against infringement and record the copyright ...
Copyright Assignment (Transfer Ownership of a Copyright)
A copyright assignment is the transfer of one's ownership of a copyrighted work to another person or entity. The prior owner (assignor) gives up all rights to the work to the new owner (assignee).
4
Implied license theories crop up in other chapters of this book, including those relating to scope of the license (Section 6.1), first sale and exhaustion (), and the licensing of technical standards ().The common theme among the cases dealing with implied licenses, if any exists, is that implied licenses may be recognized by a court in order to achieve some just end when express contractual ...
Implied assignments
In this case OHIM would need to have inferred an implied contract between the parties, as well as a term to assign the copyright, unlike in the Doc Martens Case where there was a written agreement.
Implied Assignments
Implied Assignments. Rights in intellectual property allow for creativity and innovation to be owned in the same manner as physical property. However, in contrast to the ownership of physical property which is often clear cut, it is often more difficult to determine who is the owner of an idea. This is particularly true of 'logo ...
The Difference Between Copyright Assignments and Licenses
A license is often preferred over an assignment when the copyright holder wishes to maintain and exercise some ownership control over the rights and how the licensee uses the copyright holder's rights. For example, a typical software license agreement is a copyright license agreement. The software copyright owner grants the user/licensee the ...
Assignment/Transfer of Copyright Ownership
Are copyrights transferable? Yes. Like any other property, all or part of the rights in a work may be transferred by the owner to another. See Circular 1, Copyright ...
Can I Assign or License Copyright in Australia?
You should write and draft these agreements carefully to give you as much control as you would like. If you have any questions or need assistance drafting an assignment or license agreement, contact LegalVision's IP lawyers on 1300 544 755 or fill out the form on this page. Frequently Asked Questions.
Beware of copyright when considering existing planning permission
Architects should always include copyright notices on their drawings and keep an eye out for developments using planning permission they worked on and where the ownership of the land in question changes hands; b) Buyers of land with the benefit of planning, to ensure they take an assignment of the copyright or, more commonly, obtain a licence ...

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Understanding an assignment of copyright agreement

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Book contents

4 - Implied Licenses and Unwritten Transactions

Summary Contents

4.1 Statutes of Frauds

4.2 Pitches and Idea Submissions

Nadel v. Play-By-Play Toys & Novelties, Inc.

Nadel’s Claims

Submission-of-Idea Cases under New York Law

Nadel’s Misappropriation Claim

Nadel’s Contract Claims