Does a Breach of License Equal a Copyright Infringement?

By David Carnes

A copyright license is an arrangement between a copyright holder and a user, allowing the user limited use of the copyrighted material. In most cases, the user is required to pay royalties to the copyright holder. Copyright infringement refers to the use of copyrighted material without the copyright holder's consent. Copyright infringement is based on federal copyright law, while breach of a copyright license agreement is based on state contract law.

Copyright Infringement

A copyright is essentially a legal monopoly on the right to perform, publicly display, distribute, reproduce and adapt a copyrighted work. Normally, a copyright is held by the author of the work, although he may assign or license his copyright to another party. Infringement occurs when a third party uses copyrighted material in such a way that it violates the previously mentioned rights, without the permission of the copyright holder. Even the author of a work can be sued for copyright infringement if he assigns his copyright to someone else, such as a publishing company, and then proceeds to use the work without the publisher's permission.

Copyright License Agreements

A copyright license agreement is a bargained-for agreement between a copyright holder and a party seeking to use copyrighted material. Such agreements often strictly limit the use of the material in question; for example, the user may be prohibited from adapting the material or distributing it. The copyright holder may demand a percentage of the user's sales revenue or a flat fee if the work is non-commercial. The license agreement may also stipulate other limitations on how the copyrighted material may be used.

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Breaches and Infringement

Whether breach of a copyright license agreement constitutes copyright infringement depends on the nature of the breach. If the user defaults on the payment of royalties, for example, the copyright holder is entitled to cancel the agreement and sue for damages under contract law. Use of the copyrighted material within the scope of the agreement does not constitute infringement until after the copyright holder notifies the user that the agreement has been canceled. On the other hand, if the user utilizes the copyrighted work in a manner not authorized by the licensing agreement – such as adapting the work by translating it into another language – this use breaches the agreement and also constitutes copyright infringement. If the copyright holder registered his work with the U.S. Copyright Office prior to the infringing act or within three months of first publication, he can sue the user for statutory damages of up to $150,000 per act, and no proof of actual damages is required.

Free Copyright Licenses

A free copyright license is not a binding contract because it does not require the user to provide the copyright holder with anything of value in exchange for the use of the copyrighted material. Since the license is not a contract, any use of the copyrighted material outside the scope of the license agreement constitutes copyright infringement.

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Indemnity Clause for Copyright Assignment

A copyright assignment places the person who assumes the rights in the shoes of the creator of the work. The assignment entitles the assignee to benefit from all or a portion of the rights to the work but also makes him responsible for any legal deficiencies. Consequently, the assignee typically wants some kind of guarantee or warranty written into the agreement that requires the creator to assume some liability if subsequent issues arise.

Copyright Vs. EULA

End-user license agreements or EULAs protect the creators of computer software. While copyright law also protects the creators of software from infringement or pirating of their work, there are important differences between a copyright and an EULA, which is a legally binding contract between the software maker and the user. Before agreeing to a EULA and downloading new software, you should be aware of how the agreement works and how it legally protects the manufacturer.

Types of Copyright Law

Originally, copyright law in the United States was protected by common law that originated in England. Later the U.S. Congress passed the Copyright Act -- found in Title 17 of the U.S. Code -- and amended it several times. The Copyright Act modified but did not repeal common law. In addition, the U.S. has signed copyright treaties with other nations. This legal background has given rise to several different types of copyright law.

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