Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Navigating the Potential Traps in Licensing Content for Online Uses

By Christian L. Castle
October 29, 2007

Copyright owners who are considering licensing their content for online exploitations must understand that they are venturing into still largely uncharted waters with few reliable partners. It's better than it was in 2000 ' or even 2003 ' but it's still not an entirely stable environment with dangerous shoals along the route. Don't assume that words you have seen in contracts for decades have the same meaning to your online licensee as they would to a court.

Licensing content to many online distributors or retailers is much the same decision as licensing to unscrupulous distributors in small third-world countries. Experienced licensors will likely try to get the biggest advance they can, on the assumption that they will be robbed blind on actual sales by licensees. Many such licensees go into their deals with the intent to deceive ' like so many other aspects of the Internet culture the business question is often not what's right, but what you can get away with. There are some bright spots in the market, such as iTunes Music Store, MusicNet and others, but they are few and far between.

A good example of this is a deal I did a few years ago with a large online company. I pointed out in the negotiation that there was no audit provision in the contract that would have applied to the online company. I was told that the reason there would be no audit clause is that the company had decided that being audited was not an efficient use of its resources.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

Legal Possession: What Does It Mean? Image

Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.

The Anti-Assignment Override Provisions Image

UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?