Copyright Licensing

By Hank FasthoffJuly 4, 2026

Copyright licensing is how creators and businesses extract value from their works, and the difference between a well-drafted license and a poorly drafted one is often the difference between retaining control and losing it. A copyright owner who never licenses its works may not be maximizing its revenue. A copyright owner who grants a license without proper documentation may discover that a licensee claims broader rights than the owner intended to grant, that the license is unenforceable, or that the owner inadvertently transferred ownership instead of granting permission.

Exclusive Versus Nonexclusive Licenses

Copyright law recognizes two categories of licenses, and the distinction between them affects documentary requirements, the rights of the licensee, and the owner's ability to grant additional licenses.

An exclusive license grants to one licensee the exclusive right to exercise one or more of the copyright owner's exclusive rights under 17 U.S.C. § 106, to the exclusion of all others, including the copyright owner. An exclusive licensee is treated as an owner of the licensed rights for purposes of the Copyright Act, which means an exclusive licensee can bring an infringement suit in its own name. 17 U.S.C. §§ 201(d)(2), 501(b). The court retains discretion under § 501(b) to require the licensee to serve notice of the action on others claiming an interest in the copyright, and to require their joinder, so an exclusive licensee's right to sue doesn't always mean it will litigate alone.

A nonexclusive license grants permission to use the work but doesn't prevent the copyright owner from granting the same permission to others. A nonexclusive licensee can't bring an infringement suit, because it doesn't own any exclusive right.

Writing Is Required for Exclusive Licenses

Under 17 U.S.C. § 204(a), a transfer of copyright ownership isn't valid unless it's in writing and signed by the owner of the rights conveyed or the owner's authorized agent. Section 101 of the Copyright Act defines "transfer of copyright ownership" to include an assignment, mortgage, exclusive license, or any other conveyance of a copyright or of any exclusive right under a copyright, but it excludes nonexclusive licenses from that definition.

An exclusive license must be in writing. A verbal exclusive license isn't enforceable, regardless of what the parties agreed to or how much the licensee paid. As the Ninth Circuit stated in Effects Associates, Inc. v. Cohen, 908 F.2d 555, 557 (9th Cir. 1990), Section 204's writing requirement "is really quite simple: If the copyright holder agrees to transfer ownership to another party, that party must get the copyright holder to sign a piece of paper saying so."

A nonexclusive license doesn't require a writing. It can be granted verbally, by conduct, or by implication from the circumstances. In Effects Associates, the Ninth Circuit held that when a copyright owner creates a work at another's request, delivers it, and intends the requesting party to use it, a nonexclusive license may be implied even without any written or oral agreement. Nonexclusive licenses granted without consideration (payment or something of value in return), however, are revocable at will by the copyright owner, even if no revocation clause appears in the agreement. A nonexclusive license supported by consideration operates as a contract, and courts generally treat it as irrevocable for its stated term, so the owner who wants the ability to revoke should reserve that right in the agreement rather than assume it.

What Can Be Licensed

Under 17 U.S.C. § 106, the copyright owner holds six exclusive rights, and each can be licensed separately, in whole or in part, which include (i) the right to reproduction (the right to copy the work), (ii) distribution rights (the right to distribute copies to the public by sale, rental, lease, or lending), (iii) the right to prepare derivative works (the right to create new works based on the original), (iv) the right to publicly perform the work, (v) the right to publicly display the work and (vi), in the case of sound recordings, the right to perform the work publicly by means of a digital audio transmission.

A copyright owner can license any combination of these rights, for any territory, for any duration, and for any medium or format. For example, a photographer might grant an exclusive license to reproduce and distribute an image in print media in North America for two years, while retaining all other rights (including digital reproduction, derivative works, and display), or a software developer might grant a nonexclusive license to reproduce and distribute the code in compiled form, while retaining the right to the source code and to create derivative versions.

Key License Terms

Every copyright license should address the following terms, as every omission of these terms could create ambiguity that may be resolved against the owner:

• Grant of rights: Identify which of the six exclusive rights are licensed, and whether the license is exclusive or nonexclusive. An exclusive license should state that the grant is exclusive and identify the specific rights, territories, and media covered.
• Territory: Specify the geographic territory in which the licensee may exercise the licensed rights. A license without a territorial limitation is presumed to cover all territories, which may be broader than the owner intended.
• Duration: Specify the term of the license, including the start date and the end date or the conditions under which the license expires or may be terminated. A license without a stated duration may be interpreted as perpetual (for exclusive licenses granted in exchange for consideration) or revocable at will (for nonexclusive licenses without consideration).
• Media and format: Specify the media and formats in which the licensee may exercise the licensed rights. A license granted for "print" publication may not cover digital distribution, and a license limited to media existing at the time of the grant won't reach formats developed later unless the agreement says otherwise.
• Sublicensing: State whether the licensee may sublicense the rights to third parties. If sublicensing is permitted, specify whether the owner's consent is required, whether the sublicense terms must mirror the license terms, and whether the sublicensee's rights terminate when the license terminates.
• Compensation: Specify the payment structure, whether a flat fee, a royalty based on revenue or units, a minimum guarantee against royalties, or some combination. For royalty-based licenses, define the royalty base (gross revenue, net revenue, units sold), the royalty rate, the accounting period, the payment schedule, and the right to audit the licensee's records.
• Reversion: Include a reversion clause that returns the licensed rights to the owner upon expiration, termination, or breach of the license. Without a reversion clause, the disposition of rights after the license ends may be ambiguous.

Assignments Versus Licenses

An assignment transfers ownership of the copyright itself, in whole or in part, whereas a license merely grants permission to use the work without transferring ownership. An assignment always requires a writing under 17 U.S.C. § 204(a), because an assignment is by definition a transfer of copyright ownership, and an exclusive license requires one for the same reason. Both can be recorded with the Copyright Office. 17 U.S.C. § 205.

For the grantor, the most consequential difference is termination. Under 17 U.S.C. § 203, an author who assigned or licensed a copyright (other than a work made for hire) on or after January 1, 1978, may terminate the grant during a five-year window that opens 35 years after the grant was executed. If the grant covers the right of publication, the window opens at the earlier of 35 years from publication or 40 years from execution. Termination isn't automatic. The author or the author's statutory heirs must serve advance written notice on the grantee, not less than two nor more than 10 years before the effective date of termination, and must record a copy of that notice with the Copyright Office before the effective date. If nobody serves a timely notice, § 203(b)(6) provides that the grant continues for the full term of the copyright.

The right can't be waived. Section 203(a)(5) provides that termination may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant, so a contract clause purporting to surrender the termination right won't survive a challenge.

For businesses acquiring rights in copyrighted works, the termination right means an assignment carries a recapture risk starting in year 35, though the rights revert only if the author or the author's heirs navigate the notice requirements correctly and on time. A work-for-hire arrangement, by contrast, vests ownership in the employer or commissioning party for the full copyright term and isn't subject to termination at all. When permanent control is essential, structuring the relationship as work for hire (where the statutory requirements can be satisfied) is preferable to an assignment.

Recordation and Priority

Under 17 U.S.C. § 205, a transfer of copyright ownership or other document pertaining to a copyright may be recorded in the Copyright Office. Recordation isn't required to make a transfer valid between the parties, but it provides constructive notice of the facts stated in the recorded document (so long as the document specifically identifies the work and the work has been registered) and establishes priority when conflicting transfers exist.

Under Section 205(d), the transfer executed first prevails if it was recorded within one month of execution in the United States (or within two months if executed abroad), or at any time before the competing transfer was recorded. Otherwise, the later transfer prevails if it was recorded first and was taken in good faith, for valuable consideration, and without notice of the earlier transfer. Under Section 205(e), a nonexclusive license, whether recorded or not, prevails over a conflicting transfer of copyright ownership if the license is evidenced by a signed writing and was either taken before the transfer or taken in good faith before recordation of the transfer and without notice of it.

For exclusive licensees, recording the license with the Copyright Office protects against subsequent conflicting transfers by the copyright owner. For copyright owners granting licenses, recording establishes a public record of the grant that can prevent disputes about what rights were conveyed and when.

Drafting Recommendations

Specify the rights licensed, not just the permitted use. A license to "use" a photograph leaves the licensee (and a court) guessing whether it may reproduce, distribute, display, or create derivative versions. Name the specific exclusive rights under Section 106 that are included, and state that all rights not granted are reserved by the owner.

Include a termination clause that covers breach, expiration, and bankruptcy of the licensee. Specify what happens to sublicenses when the primary license terminates. Require the licensee to cease all use and return or destroy copies within a defined period after termination.

You should address future media and technology, because a license covering "all media now known or hereafter developed" is broader than one limited to "print and digital." If the owner wants to retain rights in future formats, the license should state that rights in media not specified are reserved.

It's best to register the underlying copyright before granting a license. An exclusive licensee who needs to enforce the licensed rights through litigation will need a registered copyright to file suit. An exclusive licensee may file the application, but the registration must name the author or an owner of all rights as the claimant, because the Copyright Office won't accept a claimant who holds less than the full bundle of exclusive rights. Registration by the owner before the license is granted simplifies enforcement for both parties.

It's also best practice to record exclusive licenses with the Copyright Office, because recordation provides constructive notice and protects the licensee's priority against subsequent conflicting transfers.