Don’t Give Away Your IP Unless You Mean To - Avoiding Licenses without Agreements
This guide discusses when implied licenses of intellectual property (patents, copyrights, and rights of publicity) arise, the contours of such licenses, and how and why creators can avoid them.
AN IMPLIED LICENSE ARISES SOLELY FROM THE ACTIONS OF PARTIESAn implied license does not require any actual agreement*it arises solely from conduct and serves to allow others to use your intellectual property (*IP*). There is no requirement that even a verbal understanding was reached. Rather, an implied license is a legal concept that is created solely by the actions of parties and does not require any intention to allow such use.
The implied license originated as a concept in patent law, and was then adopted in copyright cases. It is now also applicable to the right of publicity.
Generally, an implied license will be found where the following occurred:
1. At the request of a client
2. An author creates a work
3. Knowing the intended use by the client
4. And provides the work to the client
AN IMPLIED LICENSE MAY ARISE EVEN WITHOUT PAYMENTFor singers, producers, songwriters, and artists, an implied license will allow others to use your most valuable IP, copyrights and rights to publicity (e.g., voice, image, likeness), without any compensation, or without further compensation. Moreover, if a payment is found to have been made, the license will be nonrevocable.
Not only can you license your IP without any agreement, unless you explicitly limit the extent to which your IP is licensed, a Court will find the contours of the license to be as broad as reasonably possible. In other words, unless there is evidence demonstrating that you limited the extent to which your IP may be used, an implied license will cover all uses reasonably anticipated, and without geographic limitation.
AVOIDING IMPLIED LICENSES OF IPIt is critical that creators understand the situations under which you may be found to have transferred rights, and to avoid the implied licensing of your work by having thorough, written agreements in place. Without a written agreement, you may be giving your rights away without compensation, without adequate compensation, and without knowing the parameters of the license that you have given.
There may be situations where it makes sense to work for a low amount or even for free*e.g., in order to build a reputation, make connections, learn and develop skills*but, this should not be done without careful consideration of the pros and cons of doing so in the context of your career, and you should never give away your IP without knowing that you*re doing so. Do it because you want and intend to, and because you are being fairly compensated in return (whether that compensation is monetary or otherwise). And always, know what your rights are, and what you can expect for allowing other to use them, whether that is a one-time *buy-out* payment, or it includes residual payments based on the performance of the product, or is an alternative arrangement.