The Foundations of Transferring Copyright and the Role of the Contract
For any enterprise that creates or uses intellectual products, the central legal question is who holds the copyright and how it may be transferred. The law establishes that copyright is transferred by operation of law, by will through inheritance, or by contract. Each route leads to a different result: law and will operate within the term of the copyright and concern only the special rights of use, while a contract determines, by agreement of the parties, precisely who uses the work, in what manner and on which territory. That is why the principal instrument of licensing relationships at enterprise level is the written contract.
The distinction between personal and proprietary rights is fundamental. The rights of authorship, of the name and of the inviolability of the work are not transferred by inheritance — heirs only receive the capacity to protect those personal rights, and that capacity is not limited in time. Proprietary rights, meaning the ability to use the work, are fully transferable: an author or another holder of copyright may transfer all proprietary rights or a part of them to a successor. An author may also designate a person who will protect those personal rights until the author’s death; where heirs do not exist or do not properly exercise the right of protection, it is exercised by the National Intellectual Property Centre Sakpatent.
The Exclusive Licence and Its Practical Significance
For an enterprise, the exclusive licence agreement is the most interesting instrument, because under it the author or another rightsholder grants only to the licensee the exclusive right to use the work in the manner and within the limits defined by the contract, and also confers on the licensee the right to prohibit such use by other persons, including the author. This means that a competitor cannot lawfully enter the market with the same content, and the licensee defends its position with a legal instrument rather than only with arguments. If the licensee does not exercise the right of prohibition, the author may exercise it. An exclusive licence differs from a full assignment in that the scope of the right is limited by the contract and the remaining scope stays with the author.
The Essential Conditions of a Licence Agreement
The law imposes requirements on the content of a licence agreement. It must provide for an exact description of the work to be used — its title, volume and genre; the specific manner of use of the work; the term and the territory of the agreement; the procedure for determining the royalty, or the amount of the royalty for each manner of use, together with the procedure and terms of payment; as well as other conditions which the parties regard as material.
Special attention attaches to rights the contract does not mention expressly. Every manner of using the work that is not directly provided for in the licence agreement belongs to the author or the other rightsholder. Where the specific manner of use is not indicated, the agreement is considered concluded for such use as may be deemed necessary for the fulfilment of the intention the parties had when concluding it. Rights granted under the agreement may be passed on to other persons, wholly or in part, only if this is directly provided for in the contract. And where the royalty for reproduction of the work is determined as a fixed sum, the licence agreement must set the maximum print run of the work — a norm that shields the author from unbounded exploitation in exchange for a one-off payment.
Term and Territory: The Consequences of Silent Terms
If the licence agreement does not specify its term, the author or the other rightsholder may cancel the agreement after 3 years from its conclusion, and the licensee must be notified in writing 6 months before the cancellation. Where the territory is not provided for, the agreement operates only on the territory of Georgia.
Frequently Asked Questions on Enterprise Licence Agreements
What is the difference between an exclusive licence and a full transfer of proprietary rights?
Under an exclusive licence the licensee receives the right to use the work only in the manner and within the limits defined by the contract, and its exclusivity includes the right to prohibit use by others, including the author. Under a full transfer, all proprietary rights or a part of them pass to the successor. The choice depends on whether you wish to retain control over the remaining manners of use.
What happens if the agreement does not mention a term or a territory?
Without a term, the author or the other rightsholder may cancel the agreement after 3 years, notifying the licensee in writing 6 months before cancellation. Without a territory, the agreement operates only on the territory of Georgia.
May a licence be passed on to sub-licensees?
Only where this is directly provided for in the agreement. Otherwise the transfer of the granted rights to other persons will be treated as a breach of the licence agreement.
Why must a maximum print run be established?
Where the royalty for reproduction of a work is determined as a fixed sum, the licence agreement must set the maximum print run of the work. This protects the author from a scenario in which, in exchange for a one-off payment, the use of the work grows to a scale the parties never priced in.
How We Help on Legal.ge
A licence agreement belongs to those documents whose single precise formulation protects an enterprise’s entire business model. The Legal.ge team will help you design the structure of the agreement: we will define the rights to be granted, fix the term, the territory and the royalty model, and represent you in negotiations. Contact us for a structure that matches your business plan.