What Is a Content License Agreement?

First of all, what is content licensing? Well, it simply refers to a mechanism that allows a publisher to expand by using content across several channels for content consumption. In commercial terms, it is the transfer of intellectual property by a publisher to third parties in return for payment or traffic referrals. Though content purchase and content licensing are easily comparable to one another, it is not the same thing. Purchasing content isn’t the same as licensing it. Purchasing content is prohibitively expensive, costing around 10 times as much as licensing it from another source.

What is a content license agreement? It is a legal document that allows businesses to repurpose or republish content. It’s a versatile option for businesses that want to distribute previously published goods. It’s also known as a copyright license. Also known as a copyright license, the legal ownership and use of the intellectual property is addressed in a content license agreement. Entering into a licensing arrangement would benefit the licensee since they would have faster and more efficient market access because they would be using the established intellectual property. Additionally, another advantage of this type of agreement is that a business entering it would have access to different kinds of media that can help them grow as a brand.

What’s Inside a Content License Agreement?

Content licensing essentially forces both parties into an agreement or a contract that outlines the rights and terms for usage of specific intellectual property. In order for the agreement to be effective, it needs to have the following elements:

Definition of Terms. Typically, this is one of the main parts that need to be included in a content license agreement or any kind of agreement. This part usually defines all the main keywords of the agreement whether they are simple or complex. This is included to help with familiarity and also so that the readers of the agreement will actually understand the terms in the way that the writer of the agreement wants them to understand.Term. The term clause specifies the length of the agreement. This is a standard clause that can be found in all typical contracts. This part will usually specify the time for which the license for the material will remain and will expire in the content license agreement. The licensor may include an auto-renewal provision, which states that once the period of the agreement expires, the agreement will be renewed and will enter into force again automatically. If there is a renewal option, the parties must enter negotiations and decide whether or not to renew the agreement.Identification of Licensed Content. The type of material licensed to the licensee must be specified in this part of the content license agreement. This section of the contract must clarify any form of intellectual property, whether it is a blog, video, photograph, or any other form of intellectual property. To guarantee that the property is appropriately recognized, precise terminology is necessary.Trademark Usage. The licensor provides the licensee a restricted, non-exclusive, royalty-free license to their intellectual property throughout the life of the agreement under this section of this type of license agreement. This license is only provided in relation to the licensee’s rights and duties under this agreement. It should also clarify that any such use of the intellectual property must be in accordance with the written trademark rules issued by the licensor to the licensee on a regular basis.License Limitations. In this section of the content license agreement, the licensee acknowledges that the use of the intellectual property will not represent or imply that the licensee is associated with, approved or sponsored by, or generated in affiliation with the licensor, unless as agreed upon. This section should also state that the licensee recognizes that the licensor owns all rights, titles, and interests in and to their respective intellectual property.Content Ownership. This section of the content license agreement indicates that the licensee recognizes and accepts that the licensor owns all rights, titles, and interests in their content and corresponding intellectual property and that no licenses are provided by either party except as specifically stated in this agreement. It also indicates that the licensor recognizes and accepts that the licensee owns all derivative works made by them from the licensor’s material, as long as such derivative works are separable from the licensor’s content.Content Selection. This section of the content license agreement states that, with regard to the material of the licensor, the licensee reserves the right to determine, in its reasonable discretion, the kind of licensor content it chooses to adapt for use on their corresponding platform at any time; provided, however, that the licensee shall clearly acknowledge every kind of licensor content that is used on licensee platform to the licensor.Obligations. This section is highly important and is a key provision in this agreement. It should indicate that the licensor must ensure that the content is not infringing on any third-party claims or breaching any intellectual property rights while licensing it and that if rights are breached, who will be held accountable and what remedies are available. Also, this clause must address whether the licensee can alter or modify the material and if the licensee may sub-license it.Payment. This section of the content license agreement specifies the fee that the licensee must pay in order to utilize the material. This might be a one-time payment or a pay-per-use mechanism. Other payment terms, such as the manner of payment and penalties for late payment, may be specified. With regards to taxes, this part should also state that the licensee is responsible for paying any form of applicable taxes, customs, and duties that are imposed on them by the jurisdiction as a result of the agreement.Severability Clause. This section of the content license agreement indicates that if any of the provisions of this agreement are found to be unlawful or otherwise unenforceable by a court of competent jurisdiction, such terms will be declared null and invalid and would be considered removed from this agreement. All other conditions of this agreement, however, will continue in full force and effect. It should also say that when the value of this agreement is considered compromised, either party may dissolve the entire agreement by providing writing notice to the other.Termination Clause. The termination clause of the content license agreement will specify the circumstances under which the agreement may be ended, as well as who has the authority to do so. Unresolved contract breaches and bankruptcy are two of the most typical reasons for termination. In addition, the implications of termination should be prepared after specifying the circumstances for termination and the rights. Confidential material, for example, should be deleted or must remain protected even after the agreement is concluded.Force Majeure. With the exception of the obligation to pay funds due and owing, this section of the content license agreement specifies that neither party shall be responsible for any interruption or failure in performance caused by factors beyond the defaulting party’s reasonable control. This section further specifies that the excused party’s duties and rights will be extended on a daily basis for the duration of the excusable delay.Subsidiaries. This is the component of the content license agreement that allows the licensee to enable others to use the licensed work may allow the licensee to allow others to use the licensed work, but only if it is set within specified legal bounds. Formal language is quite beneficial in dealing with these difficult circumstances.

Steps in Making a Content License Agreement

Many agreements can be difficult or time-consuming to create. Such is the case of a content license agreement. Since it is complex to create, it needs to be accurate enough and must possess the ability to be customizable by either party during the negotiation phase. With that being said, here are the steps to guide you when making a content license agreement. Take note that legal expertise may be required after drafting this document to go over the finer details of the agreement.

  • 1. Identification of the Parties Involved

    The first step in creating a content licensing agreement is to determine the parties involved in the document. In a content licensing agreement, the parties involved are the content licensor and the licensee. The main responsibilities and obligations of the licensee are to agree to comply with all the legal necessities with regards to using the licensor’s content and shall not use the said content for the purpose of violating the terms of the agreement. The main responsibilities and obligations of the licensor in this agreement are to provide any kind of reasonable assistance to the licensee concerning the usage of their content as well as provide support to any kind of issues that may arise following the usage of their content.

  • 2. Identification of the License

    After identifying the parties involved in the agreement, this step will follow. During this step, the type of license that is to be agreed upon by the parties involved must be determined. The most common licenses are copyright licenses that outline the right to make copies and sell legally protected material, trademark licenses that grant legal authorization to use a company’s trademark, patent licenses that grant the right to use, sell, manufacture, and share a patented product, and trade secret licenses that outline how and when you are given permission to use a company’s trade secrets.

  • 3. Drafting of the Main Terms

    After the type of licensing to be used in the agreement has been identified, proceed to this step. In this step, the main terms of the content licensing agreement must be drafted. Some of the main terms include the term of the agreement which specifies how long the license for the material will remain and when it will expire, the trademark usage clause which allows the licensor to provide the licensee a restricted, royalty-free license to use their content, the obligations clause which states in clear wording the obligations of all the parties involved in the agreement, the content ownership clause which states that the licensee owns all derivative works made by them from the licensor’s material as long as they are separable from the main content, and so on.

  • 4. Define the Terms of Payment

    After the main terms of the content license agreement have been drafted, this step will then follow. In this step, provide and define the terms in which the payment is going to be provided. You may state here that the payment will be done in a one-time payment method or that the payment may be done only when the licensed content is being used. In this step, you may also write that the licensee is responsible for payment of any form of taxes and duties that are deemed applicable by the jurisdiction because of the agreement.

  • 5. Draft the Boilerplate Clauses

    After defining the main terms and the payment term of the agreement, this step will then follow. Boilerplate clauses are clauses that can be found at the end of the majority of legal documents. Some examples of these are the severability clause which states that an unenforceable part of the agreement can be determined to be null and void without affecting any other parts of the agreement that are enforceable, the force majeure clause which states that neither party should be held responsible for any interruption or performance failure due to circumstances beyond their control, and the termination clause which states the circumstances in which the content license agreement may be ended along with its implications.


When is a content license agreement needed?

When you wish to use intellectual property developed by a person or corporation, a content license agreement is required because it specifies how the material will be used and under what contractual conditions. When the licensor grants permission, a corporation can immediately upload the content to their website, promotional materials, social networking websites or profiles, television advertisements, radio adverts, and print advertisements.

What is the disadvantage of entering a licensing agreement?

One disadvantage of having a licensing agreement is the possibility of entering into a deal with the wrong party. It suggests that a licensor may be locked into a long-term contract with a corporation whose values may not coincide with its own. The same logic should apply to the licensee, particularly when it believes a new product or brand would do well in a particular market without conducting adequate research. When this occurs, both parties run the danger of losing brand strength and/or reputation.

Does a royalty-free license signify that a product is free for commercial use?

A product with a royalty-free license is not always free for commercial use, which includes any usage that might lead to the purchase or sale of goods. You may need specific permission to use the picture in resale items, such as a product or digital download.

Having an effective content license agreement is essential since it protects the intellectual property of the licensor from abuse, misuse, or damage by the licensee throughout the agreement. It is also essential on the licensee’s behalf since it enables them to be in a position where they are able to generate much-needed revenue out of someone’s intellectual property, provided with permission of course. In this article, different sample templates of this kind of agreement exist for you to have a look and use as a sample when making one.