Whenever two entities interact, such as writer and publisher or influencer and brand, there is often some sort of licensing that goes on between the parties and involves those parties’ copyrights or trademarks. In order for this transaction to succeed, one or both parties need to allow the other to use their copyright or trademarks. It is important therefore to limit the use of these licenses to ensure that one party doesn’t end up abusing your rights.
What is a license?
A license is a right to use something. For example, your driver’s license allows you to operate your vehicle on public roads. When it comes to copyright and trademark, a license allows one party to use, and not be sued, the other party’s property. For example, when a company like McDonalds offers Marvel toys in their meals, both Marvel is giving McDonalds a limited license to use their brand and copyright, and McDonalds is licensing Marvel to use its trademark for advertisement.
How are licenses limited?
Specifically, a license to use copyright or trademark in a collaboration is limited in time, usage, and location. A time limitation usually lasts the duration of the collaboration such as a three-month duration for promoting a brand. Usage limitations limit the copyright and trademark to certain mediums or impose certain royalties. For example, when a publisher agrees to publish your book, they usually ask for a limited license to both publish your writing in book form and potential movie rights that go along with it. Limitation in location is usually found in franchising agreements. When you open your own McDonalds, they give you a limited license to their trademark and brand within a one-mile radius of your store location.
A final but important limitation on licenses is revocability. In any contract where your brand or name is being used by a third party, you should always bargain for a right to revoke that license should that third party take actions that damage your reputation. This adds an extra layer of subjective protection to your brand or copyright that can be enforced reasonably at will and can prevent things from going south fast. For instance, if an influencer uses your product and doesn’t understand it or doesn’t review it justly, you want to be able to revoke their license to use your trademark in connection with the video, forcing them to remove it from public view.