Music Law: Licenses vs. Assignments

The big day comes! You've worked hard for years, and finally, finally, someone with some money and some power is paying attention to you, your work, your ideas.

They want to help you, they want to promote you, they want to be your agent, your manager, your friend. It all sounds too good to be true, doesn't it?  Maybe and maybe not.

This event does happen, and even further, it can happen for you. When it does, make sure that you know what exactly it is you are getting into, and what exactly it is that you are giving up.

What am I talking about?  Well, I am talking about signing a contract - with distributors, promoters, record companies, publishing houses, co-authors, etc.(basically any organization or person).

As an artist, your value is your work. Anything you create on your own (without taking it from some one else's work, except if it is in the public domain), and put in a tangible medium, is your "intellectual property".

In our society, and around the world, property is everything! The law is built around the notion of protecting property; property is power. Therefore, as an artist, you have a vested interest in protecting your intellectual property power.

(This power gives you the right to decide how your work will be used in the future, who has access to your work, how your work can be exploited, etc...)

Without this power, it is as if you were merely a vessel for someone else's profit. When contracting, you want to make sure that you retain as much of your power and your property. It is therefore extremely important to understand the language in the agreement (which is why lawyers, believe it or not, are actually quite helpful).

This article is going to explore three key distinctions which are beneficial for you to know, so as to best equip you with the ability to protect yourself.

These three distinctions are the differences between:

1. "exclusive licenses"
2. "non-exclusive licenses" and
3. "assignments"

Substantial and detrimental differences exist between the words "license" and "assign".

Of course, the logistical aspects of creating legally binding licenses and/or assignments are more technical than this article provides space for. However, the following precursory discussion can help you start to understand the nature of your agreement.

There are two forms of licenses':  exclusive and non-exclusive.

Exclusive License

An exclusive license allows one person (or organization), and NO ONE ELSE, to use or do the work or action licensed.

For example, if you write a book, then you have the full copyrights to that book. As such, you can grant a company (the "Money-Makers") an exclusive license to create ALL derivative works from your book. This means that the "Money-Makers", and no one else, including yourself, can create works from your book (i.e. the "Money-Makers" get to create the audio tapes/CDs, screen play, etc.).

Alternatively, you could grant the "Money Makers" an exclusive license in the book to create a play, and you could grant another company, ("MGM") an exclusive license in the book to create a screenplay.

But if you grant one organization or person an exclusive license in the broad term "derivative works", then they have the broad rights to create whatever works they want from your book. The point is that whenever exclusive licenses are granted, only the beneficiary of that license, and not the artist, has the ability to engage in the right licensed.

Non-Exclusive License

On the other hand, a non-exclusive license allows the recipient to utilize the right granted, but also, it allows you to give that right to other parties, and to engage in the activity yourself.

For example, if "Money-Makers" has a non-exclusive license to create a derivative work, let's say an audio CD, then they can create the audio CD version of your book, but also you could create an audio CD version of your book, and you can have "MGM" create an audio CD version.

Assignment

An assignment however, severely impairs your ability to utilize your intellectual property. Assignments are used when the copyright owner (the artist) transfers all of their rights to another person.  This is different from a license, where you are simply giving another person permission to use or exploit the work for a specific purpose.

Remember:

• assignment = outright transfer of all rights
• license = permission to exploit particular rights

 

For example, if you assigned you rights to the "Money-Makers", then the "Money-Makers" would be the only party who could copy your book, who could create derivative works, who could perform any plays based upon your book, as well as a variety of other rights listed in the Copyright Act of 1976.

Moreover, the "Money-Makers" would be, to all the world, the owners of your work. It is as if they had created the book themselves; as such they now have the right to decide the future of how, when and where your work gets used. You, the artist are no longer involved in the use and exploitation of your work (except as described in the contract).

In summary, while the excitement of the BIG DAY might blur your vision of the words and concepts, you should make sure that you know what you are getting yourself into, and make sure that whatever rights you choose to give away, they reflect your true intentions.

by Sheri Lyn Falco

edited by Howie Cockrill, Esq.