Developing a website comes with a lot of pros and cons. While developing it, you would want to include lots of information, and you can either do it yourself or hire professional writers to do it for you. You would often see content in line with what your brand or website is about on other sites and would want to put it on your website. The right to do this is known as a website content license agreement. This gives you the chance to use content owned by another person or a third party on your website. A licensing agreement will provide you with essential provisions and rights to liaise with other content developers to use their content.
Licensing your product, idea, or service is a passive and lucrative way of making more income. It is a fast way to become a millionaire. In any case, every business aims at making profits. The beauty of licensing a deal is in its passiveness.
This article will explore what a website content license agreement is, the differences between a licensee and a licensor, the components of a license agreement, and the types of licensing agreement.
- What is a Content License Agreement?
- Differences Between a Licensee and Licensor
- What are the Six Components of A License Agreement?
- Types of Licensing Agreement
What is a Website Content License Agreement?
A website content license agreement is a legal contract that enables companies to republish contents that other companies initially published on their website. It is otherwise known as a copyright license that holds the legal ownership and usage of intellectual content. This agreement legally binds the participants to use properties like images, text or documents, data, software, audio, and video. All these forms of media that you will have access to will help you grow your brand.
With a content license agreement, the licensee can use something owned by the licensor, without which it would be legally prohibited to use such property. The licensee agrees that the licensor owns all rights, titles, and interests. This agreement will determine the basis of all operations by the licensee or licensor as the basis of the deal is the permission the licensor grants to the licensee.
The licensee is the party that receives license to use an intellectual property. On the other hand, the licensor is the party that gives the right to use intellectual property. Typically, the rights granted to the licensee are limited. This is due to the authority the licensor still has over the content. This, in order words, means that the licensee will only be able to do the things that the licensor agrees on.
Licensing comes with some benefits as well, and they are the following:
- The ability to generate income without taking heavy production, promotion, and packaging costs
- Accessible entrance into the foreign market
- Diffusion of profits by ensuring both parties make profits
- Better marketing
As a licensor, however, you tend to lose partial or complete control over your property or invention. This will make you rely on the licensee’s capability to commercialize your property effectively. You are also at risk if your licensee cannot effectively strategize and execute your invention for successful production, which might further damage your brand’s or products’ reputation.
The Content License Agreement is so that you might take proper steps before granting a license over your content to a licensee. You would get to know the other party’s brand and determine if you would want to risk partnering with them or not. Whatever the deal would eventually be, the licensor and licensee would have seen that they would both make reasonable profits from the contract between them.
What are the Six Components of A Website Content License Agreement?
This component of a license agreement dictates how a licensee will use the license. It could be exclusively or restrictively, depending on the agreement between the licensee and licensor. The licensor might determine that the licensee would only be able to use the license within a limited geographical area. It might also be the case that the licensee would have no limits in using the right.
This is another component that licensees usually look for in a website content license agreement. Exclusiveness means that the licensee is the only party that can use the licensed intellectual property. Thus, there is a restriction on the licensor, who cannot grant the intellectual property to another person. The exclusive type of licensing agreement is usually the most expensive because of this fact. In non-exclusive licensing, the licensor has the right to grant access to use intellectual property to other companies or businesses.
Content licensing agreements can also be restricted based on territory, and parties must clarify where the license would be used during the contract term. The licensor might, for example, grant access to the licensee to use a property within a particular region, state, country, or continent.
All agreements must have a term of usage. This has to do with the deal’s time frame. Whatever time frame the two parties would set must be realistic. This ensures that both parties can achieve their goals for adequate production or manufacturing, distribution, and marketing. The wise thing to do while setting a time frame is to consider what period would earn maximized returns from the partnership.
The licensing party has to pay an amount of money for the period they would use the license. There are several methods of compensation:
- A one-time payment
- An earned royalty fee with an annual minimum
- A combination of (1) and (2)
This has to do with the circumstances in which the agreement may be terminated. The termination comes in after the expiry of the contract and the exhaustion of all renewal periods. Licensors and licensees should always agree on why and how the contract may be terminated. The point of termination may be with or without cause. Licensors may decide to terminate the contract if a licensee :
- Refuses to pay a royalty
- Doesn’t uphold the licensor’s level of quality control
- Files for bankruptcy
Licensees often don’t have enough rights to terminate the contract since it depends on performing well and upholding the agreement.
Types of Licensing Agreement for Website Content
This covers science, technology, and innovation as a patent owner can allow another person to use their patent by licensing it for production, distribution, and marketing purposes for a specific period. This licensing agreement is the most challenging type because there is a lot involved in maintaining a patent.
This licensing allows owners of trademarks to grant access to others who want to use their IP. Trademark owners give access to their brands for commercial purposes or goods such as clothing, iPhone cases, or food products.
This licensing covers works of visual art like paintings, movies, and songs. It also applies to movie characters, and such agreements are used for consumer goods, distributorships, musical projects, and films.
This type of licensing is unique because they are not registered with the government. Patent, trademark, and copyright licensing can only be worth it when licensed or registered with the government—the uniqueness of trade secret licensing lies in secrecy.
Coca-Cola and KFC Kitchen are two top examples of trade secret licensing. The recipe for KFC Kitchen and the formula for Coca-Cola is unknown due to the secrecy of their trade.
These sorts of licensing are done with non-disclosure agreements (NDAs) because they are strictly confidential and cannot be disclosed to other people.
It is between the Licensee and Licensor to determine if they want their website content license agreement to be exclusive or not. An exclusive agreement creates a stronger relationship between the licensee and the licensor because both parties agree and acknowledge that the licensee has certain rights to a content or property. This, however, typically costs more but has higher returns than the non-exclusive agreement.
It is also expedient that you decide on the duration of the license, whether it would be perpetual or term-based.