Copyright Licensing

By Hank FasthoffJuly 4, 2026

A copyright owner may license some rights while retaining others. The parties may divide those rights by territory, duration, medium, format, or field of use. Whether the license is exclusive or nonexclusive determines what ownership changes hands, whether the license requires a signed writing, and who may sue for infringement.

Parties often dispute imprecise grants. A reference to the right to "use" a work may not establish whether the licensee may reproduce it, distribute it, modify it, display it, perform it, or authorize others to do so. The agreement should identify the licensed rights and the limits on each grant.

Exclusive and Nonexclusive Licenses

An exclusive license transfers ownership of one or more exclusive rights within the scope of the grant. Under 17 U.S.C. § 201(d)(2), each exclusive right and any subdivision of that right may be transferred and owned separately.

A photographer might grant one publisher the exclusive right to reproduce an image in North American print magazines for two years while retaining digital, advertising, and foreign rights. Within that defined scope, the licensee owns the exclusive right and the copyright owner may not exercise or license the same right unless the agreement reserves that authority.

Under 17 U.S.C. § 501(b), the legal or beneficial owner of an exclusive right may sue for infringement of that right committed while the party owns it. The court may require notice to other persons claiming an interest and may require their joinder.

A nonexclusive license permits the licensee to use the work without transferring copyright ownership. The owner remains free to grant the same permission to other licensees. Because a nonexclusive licensee owns no exclusive right, the licensee ordinarily may not bring an infringement action in its own name under Section 501(b).

Exclusive Licenses Require a Signed Writing

Under 17 U.S.C. § 204(a), a transfer of copyright ownership isn't valid unless a written instrument, note, or memorandum documents the transfer and bears the signature of the owner or the owner's authorized agent.

Section 101 defines a transfer of copyright ownership to include an assignment, mortgage, exclusive license, or another conveyance of a copyright or exclusive right. The definition excludes a nonexclusive license.

An oral grant alone doesn't establish a valid exclusive license under Section 204(a). The signed document doesn't need to contain every term of the parties' relationship, but it must identify the transfer. In Effects Associates, Inc. v. Cohen, 908 F.2d 555, 557 (9th Cir. 1990), the Ninth Circuit explained that even a brief signed memorandum may satisfy the writing requirement.

A transaction shouldn't depend on obtaining that memorandum after performance begins. A contemporaneous agreement provides a better record of the rights transferred, the consideration, and the restrictions governing the license.

Nonexclusive and Implied Licenses

The Copyright Act doesn't require a nonexclusive license to be in writing. A nonexclusive license may arise from an oral agreement or from the parties' conduct. State contract law and other applicable statutes may impose separate requirements, so the absence of a federal writing requirement doesn't end the analysis.

In Effects Associates, a filmmaker requested special effects footage, the creator produced and delivered it, and both sides understood that the filmmaker intended to incorporate it into a motion picture. The Ninth Circuit found an implied nonexclusive license to use the footage in that film. The decision didn't transfer ownership or authorize every possible use of the footage.

Payment also affects revocability. In Lulirama Ltd., Inc. v. Axcess Broadcast Services, Inc., 128 F.3d 872, 882 (5th Cir. 1997), the Fifth Circuit treated a nonexclusive license supported by consideration as a contract. Because the record contained no indication that the parties intended the license to be terminable at will, the copyright owner didn't revoke it merely by filing an infringement lawsuit.

The agreement should state when either party may terminate and what events permit termination. Those provisions should address breach, notice, cure rights, expiration, and any uses permitted after termination.

Rights That May Be Licensed

Section 106 identifies the exclusive rights protected by copyright. The applicable rights depend on the category of work and the statutory limitations governing it. Those rights include reproduction, distribution, preparation of derivative works, public performance, public display, and public performance of a sound recording through digital audio transmission.

The parties may license an applicable right in whole or in part. A software developer might grant a nonexclusive right to reproduce and distribute compiled code while retaining the source code and the right to prepare derivative versions. A music publisher might license the synchronization of a composition in one motion picture without authorizing a sequel, soundtrack album, advertisement, or video game. The grant should identify the rights covered by the license rather than rely on a general reference to "use."

Key License Terms

A copyright license should address the following subjects.

• The grant should identify each licensed right and state whether the license is exclusive or nonexclusive.
• The territory should identify where the licensee may exercise the rights. Federal copyright law doesn't establish one territorial scope for every license.
• The duration should identify the starting date, ending date, renewal terms, and events that permit earlier termination.
• The media and formats should identify whether the grant covers print, broadcast, streaming, applications, social media, physical products, or technologies developed after execution.
• The field of use should identify the authorized industries, products, audiences, or commercial purposes.
• The sublicensing provision should state whether the licensee may grant sublicenses. If so, the parties should address consent, required terms, reporting, and what happens to sublicenses when the primary license ends.
• The compensation provision should define the fee or royalty, the calculation base, permitted deductions, accounting periods, payment dates, statements, and audit rights.
• The provisions governing expiration and termination should address existing copies, inventory, customer access, accrued royalties, sublicenses, and the return or destruction of protected material.

Language covering all media now known or later developed grants broader rights than language limited to identified uses. If the copyright owner intends to retain rights in unspecified formats, the agreement should reserve them.

Assignments and Exclusive Licenses

An assignment and an exclusive license both constitute transfers of copyright ownership under the Copyright Act. The distinction depends on the rights conveyed.

An assignment may transfer the entire copyright or specified rights. An exclusive license transfers ownership only within its defined scope. A nonexclusive license grants permission without transferring ownership.

Assignments and exclusive licenses require a signed writing under Section 204(a). Either may be recorded with the Copyright Office under 17 U.S.C. § 205.

Termination Rights

An eligible grant executed by the author on or after January 1, 1978 may be subject to statutory termination under 17 U.S.C. § 203. Assignments, exclusive licenses, and nonexclusive licenses may qualify. Grants made by will and grants involving works made for hire are excluded.

Termination ordinarily becomes effective during a period of five years beginning 35 years after execution. A different calculation applies when the grant includes publication rights. The author or statutory successors must serve advance notice and record it with the Copyright Office before the effective date.

Contract language can't eliminate a qualifying Section 203 right. The detailed timing, ownership, signature, and notice rules are discussed in the Section 203 termination article.

Recordation and Priority

A transfer or another document concerning copyright may be recorded with the Copyright Office under Section 205. Recordation isn't required to make a transfer valid between the parties, but it may affect constructive notice and priority. A recorded document provides constructive notice only if it specifically identifies the work so that a reasonable search would reveal it and the work has been registered.

When two transfers conflict, Section 205(d) generally favors the transfer executed first if it was recorded within one month after execution in the United States, within two months after execution abroad, or before the competing transfer was recorded. Otherwise, the later transfer may prevail if it was recorded first and was taken in good faith, for valuable consideration, and without notice of the earlier transfer.

Section 205(e) contains a separate rule for nonexclusive licenses. A nonexclusive license evidenced by a signed writing may prevail over a conflicting transfer if the license was taken before the transfer or was taken in good faith before recordation of the transfer and without notice of it.

Recordation alone doesn't resolve every conflicting claim. The result depends on registration, the document's description of the work, execution dates, recordation dates, consideration, notice, and good faith.

Bankruptcy

Bankruptcy requires separate treatment in the license agreement. Under 11 U.S.C. § 365(e), a provision in an executory contract generally may not terminate or modify the agreement solely because of insolvency, the commencement of a bankruptcy case, or the appointment of a custodian. The statute contains exceptions, so the effect of a particular provision depends on the agreement and the bankruptcy circumstances.

When the debtor is the licensor and rejects an executory intellectual property agreement, Section 365(n) permits the licensee to elect to retain specified rights, including contractual exclusivity, for the duration of the agreement and any extension available as of right. A licensee making that election must continue paying the required royalties and is subject to the statutory limitations on that election.

The parties should address ownership of copies, access to source materials, escrow arrangements, continuing obligations, royalty payments, and the effect of rejection.

Registration and Enforcement

For a United States work, Section 411(a) ordinarily requires preregistration, registration, or a registration refusal before an infringement action may begin. The same statutory prerequisite doesn't apply to a qualifying foreign work.

A party that owns all rights initially belonging to the author may be identified as the copyright claimant. A party that owns fewer than all exclusive rights may certify and submit an application in the author's name but may not identify itself as the claimant solely because it owns one exclusive right. The Copyright Office explains that distinction in Compendium Sections 619.8 through 619.10.

A nonexclusive licensee ordinarily may not submit an application unless acting as an authorized agent for the author, claimant, or owner of an exclusive right.

Registration before licensing often makes later enforcement easier. The agreement should identify who is responsible for registration, recordation, infringement monitoring, enforcement decisions, litigation costs, recoveries, and cooperation.

Documenting the Scope

A copyright license should identify the rights granted, the rights retained, and the conditions governing each party's performance. The drafting should address exclusivity, territory, duration, media, sublicensing, compensation, termination, registration, recordation, enforcement, and bankruptcy.

The agreement's label doesn't determine its legal effect. The rights described in the grant determine whether the transaction transfers copyright ownership or only permits specified uses.