The Licensing Corner

• Jurisdiction: United States,Federal
• Author: Sean Hogle
• Publication year: 2019
• Citation: Vol. 44 No. 3

The Licensing Corner

Sean Hogle

Rooney Nimmo PC

A copyright license is not a "contract not to sue:" drafting and negotiating copyright license grants as quasi-property deeds

In A License is Not a "Contract Not to Sue:" Disentangling Property and Contract in the Law of Copyright Licenses, Iowa L. Rev. (March 2013), Prof. Christopher Newman presents a useful and compelling case for the treatment of copyright licenses as the conveyance of real property-like interests, akin to rights of way, licenses and easements in real property law, and explains how this treatment finds explicit support in the US Copyright Act. Existing copyright law enables the creation and validity of copyright "deeds," or unilaterally executed written instruments of conveyance—even those unsupported by consideration, similar to the way that a conveyance of a real property interest can be manifested by deed.

Professor Newman's articulation of how property and contract law interact is instructive of how IP transactions counsel may wish to approach the drafting and negotiation of copyright license grant clauses. This article presents this articulation of the copyright-contract interface, and proposes specific work product in the form of license grant legal text that endeavors to take full advantage of this framework.

Emphasizing that a license does not require a meeting of the minds or mutual consideration to be enforceable, Professor Newman demonstrates that a license agreement should be viewed as a contract in which one side's consideration is the grant of a license—that is, a conveyance of a property interest. A license creates a privilege, one that may be granted unilaterally, and one that can be conditioned or revoked, quite similar to privileges and licenses in real estate. Open source licenses neatly fall into this categorization.

Professor Newman ably reveals the fallacy in the oft-repeated claim that copyright licenses are nothing more than "contracts not to sue governed by ordinary principles of contract law." If copyright licenses are nothing more than contracts not to sue for infringement, then consider the following scenarios (all taken from the article):

• Anne, demanding nothing in return, orally consents to allowing her friend Larry to stage a production of Anne's copyrighted play. The first week's run was a great success, after which Anne decides to revoke her consent and claim copyright infringement for the past week's performances. A license is just a contract not to sue, Anne argues, and the lack of consideration supporting Anne's forbearance of suit means no contract ever came into being.
• Anne and Larry enter into a written five-year deal requiring annual license fees that Larry has faithfully paid. Three years in, Anne sells her copyright to the play to Brenda. Brenda sues Larry for infringement for the entire three years the play has been in production. Larry raises the written license as a defense, but a license is just a contract not to sue, and Brenda has never entered into a contract with Larry. The civil copyright infringement...