The owner of a copyright may grant an interest in any of the rights by licence to a third party, generally subject to agreed terms and conditions.
Unlike an assignment, there is no transfer of ownership. The owner remains the owner. What the licensee receives is permission to exercise specified rights.
What a licence agreement should cover
Among the terms that need addressing:
- Type and scope of the licence granted
- Term and territorial extent
- Consideration, being royalty, which may be a lump sum paid in advance or a running payment
- Revision terms, where the parties want the arrangement to adjust over time
- Extension and termination
Copyright is a bundle of rights, so scope deserves particular care. A licence to reproduce a work is not a licence to adapt it, and a licence to communicate a work to the public is not a licence to make a film of it. Silence on a right generally means the right was not licensed.
Types of licence
Exclusive licence
Granted exclusively to the licensee, to the exclusion of everyone including the licensor. Even the owner cannot exploit the work within the licensed scope.
Non-exclusive licence
The licensor may grant licences to any number of parties, with exclusivity to none.
Sole licence
Granted to one party to the exclusion of all others save the licensor. The owner retains the right to exploit the work themselves, but will not license anyone else.
The distinction between exclusive and sole is frequently blurred in drafting and frequently litigated afterwards. If the owner intends to keep exploiting the work, the licence is sole, not exclusive, and it should say so.
Compulsory licence
A licence granted for a work that is unavailable to the public. This typically arises where the owner deliberately withholds the work, or where the owner has died, cannot be found, or cannot be traced.
A third party applies for a licence to make the work available to the public. Where the work is being deliberately withheld, a complaint is made that the work is not being made available or republished by the owner.
Note on forum: these applications were formerly made to the Appellate Board. Following the Tribunals Reforms Act, 2021, the Appellate Board was abolished and this jurisdiction transferred to the Commercial Courts and High Courts. The Delhi High Court’s Intellectual Property Division is the most developed forum. See copyright registration for more on the appellate position.
Licensing through a copyright society
Where a work is used at scale by many licensees, individual licensing is impractical. Copyright societies administer rights collectively, issuing licences and collecting royalties on behalf of owners.
Only registered societies may carry on that business.
Author royalty rights
For literary and musical works incorporated into cinematograph films and sound recordings, the 2012 amendments strengthened the position of authors in relation to royalties.
Licensing arrangements touching film and music rights need drafting with this in mind, and the case law has been actively developing, including Vodafone Idea Ltd v IPRS before the Calcutta High Court.
Frequently asked questions
What is the difference between a licence and an assignment? A licence grants permission to use rights while ownership stays with the owner. An assignment transfers ownership.
What is the difference between an exclusive and a sole licence? Under an exclusive licence, even the owner is excluded from the licensed scope. Under a sole licence, the owner retains the right to exploit the work but will not license others.
Does a copyright licence have to be in writing? It should be. Oral arrangements create evidential difficulty about scope, term and territory, which is where disputes concentrate.
Who grants compulsory licences now? Following the abolition of the Appellate Board in 2021, these matters sit with the Commercial Courts and High Courts.
Can I license rights in a work not yet created? Arrangements covering future works are possible, but the drafting needs care about when rights arise and what happens if the work is never created.
Do the default rules on duration and territory apply to licences? The statutory defaults on unstated duration and territory are framed in the context of assignment. Regardless, a licence should state both expressly rather than leave them to argument.
Useful official resources
- Copyright Office, India
- Copyright Act, 1957 — Sections 30 to 32B
- Indian Performing Right Society
Negotiating a licence and unsure whether it is exclusive or sole? Talk to us. That distinction is worth settling before signature.