Copyright, Database Rights and Rights in Performances
Licensing Overview
Jane Lambert
5 May
2004
Last updated 26 March 2006
A copyright licence is permission to do one or more of the acts restricted to the copyright owner for the whole or part of the copyright term. Licences may be express, implied or arise by operation of law. They may be exclusive (that is to say, granted to the licensee to the exclusion of all others including the licensor), non-exclusive (available to more than one licensee) or sole (granted to the licensee but not to the exclusion of the licensor). The terms upon which licences are available are subject to EC and UK competition law as well as the provisions of chapter VII of the Copyright, Designs and Patents Act 1988 ("the CDPA") in respect of licensing schemes and so forth.
Formalities
No particular formalities are required for sole or non-exclusive
licences though in practice they are often quite complex instruments,
particularly where the licence is for software or pursuant to a
licensing scheme. Exclusive licences, however, have to be in writing and
signed by or on behalf of the copyright owner to comply with s.92 (1) of
the CDPA.
Statutory
Licences
There are a number of instances where the Secretary of State can grant
licences pursuant to statute. These include rental right and
reprographic licences for educational institutions. S.69 (1) of the CDPA
(as amended by reg. 11 (3) of The Copyright and Related Rights
Regulations 1996 (SI 1996 No. 2967) enables the Secretary of State to
make an order providing that, in specified cases. lending copies of
artistic, dramatic, literary or musical works sound recordings or films
shall be treated as licensed by the copyright owner subject only to the
payment of such reasonable royalty or other payment as may be agreed or
determined in default of agreement by the Copyright Tribunal. An
application to settle such royalty or other sum payable in pursuance of
s. 66 may be made by the copyright owner or the person claiming to be
treated as licensed (s. 142 of CDPA as amended by reg. 13 (2) of the
1996 regulations). The Tribunal wall consider the matter and make such
order as it may determine to be reasonable in the circumstances. Either
party may subsequently apply to the Tribunal to vary the order after 12
months or sooner with special leave.
EC and National
Competition Law
Because licences are agreements between undertakings which may affect
trade within the UK or the EC and may prevent, restrict or distort
competition in that they may fix purchase or selling prices or other
trading conditions, directly or indirectly, they may be caught by the
Chapter I prohibition of
the Competition Act 1998 or
art. 81 of the Treaty of
Rome. Further, licences may abuse a dominant position in the UK or EC
market within the meaning of
s.18 of the Competition
Act 1998 (Chapter II prohibitions) or
art. 82 of the Rome
Treaty. Both the Act and Treaty provide exemptions from those
prohibitions for agreements that improve production or distribution or
promote technical or economic progress (s.9
Competition Act 1998 and art. 81 (3) EEC).
Between 6 Feb 1962 and 30 April 2004 the basic rule was that applicants for exemptions from art 81 (1) had to notify the terms of their agreements to the Competition Directorate-General of the European Commission. To prevent the Commission from being overrun with applications the Council of Ministers adopted Regulation 19/65/EEC which allows the Commission to exempt whole categories of agreements from art 81 (1). An exemption from art 81 (1) EEC automatically extends to the Chapter I prohibition as a "parallel exemption" by virtue of s.10 of the Competition Act 1988.
On 27 April 2004, the Commission adopted the technology transfer block exemption (Commission Regulation (EC) No 772/2004 on the application of Article 81(3) of the Treaty to categories of technology transfer agreements) which exempts various types of technology transfer agreements, including software licence, from art 81 (1) EEC.
It is important to note that the technology transfer block exemption does not extend to all copyright works though some licences may be exempted by the vertical agreements block exemption (Commission Regulation (EC) No 2790/1999 of 22 December 1999 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices) or the research and development block exemption (Commission Regulation (EC) No 2659/2000 of 29 November 2000 on the application of Article 81(3) of the Treaty to categories of research and development agreements).
Licensing
Schemes
The CDPA provides machinery for regulating
licensing schemes under
Chapter VII which have already been mentioned and compulsory licensing
following a report by the Competition Commission which are discussed
below.
Competition
Commission Report
Where the Competition Commission reports that terms in licences or
refusals by copyright owners to grant licences on reasonable terms
operate, or have operated in the public interest, there is power under
s.144 (1) of the CDPA to cancel or modify the offending term or provide
that licences in respect of the relevant copyrights will be available as
of right. S.144 (3) requires the minister to be satisfied that any
exercise of those powers does not contravene any convention to which the
UK is party. The terms of any such licence are to be settled by the
Copyright Tribunal in default of agreement by the parties (s.144 (4)).
