(Revised 2019) 


Ivan Hoffman, B.A., J.D.

          Here is the situation: you are a rights owner (“Owner”) and are entering into an agreement (“The Agreement”) for the exploitation of some or all of the rights you own by another party (“Licensee”) in another territory.  What are some of the issues that are presented by this type of transaction? 

          I will limit this article to a discussion about such a transaction where “you” are a publisher of books (in any format).  However, these issues also apply in the instances where you have rights to other materials.   

Do You Even Own the Rights? 

          Initially, the concept of being a rights owner needs some preliminary discussion.  If you are not the sole creator of the work and instead have acquired some or all of the rights in the work from that creator, then of course you must actually own the respective rights before you can enter into The Agreement to have the Licensee use and exploit those rights.  Read “The Fundamental Principle Under the United States Copyright Law.”  This may seem self-evident but often parties believe they own rights but in fact they do not.  This error is often because there is either no written agreement transferring those rights exclusively to the Owner or the acquisition agreement is woefully deficient or vague and uncertain.  Also read the series of articles under the titles “Precise Contract Language.”   In the event that there is no sufficient written agreement between the creator and you, then you have a very legally uncertain situation, one that makes effective exploitation of the rights all but impossible.  Also read the series of articles under the titles “A Legal Nightmare: The Unwritten License.”   

          Without a transfer or ownership of exclusive rights, you are generally not in a legal position to exploit or allow others to exploit the rights for a number of reasons not the least of which is that The Agreement will generally require you to transfer or license exclusive rights.  Moreover, if you do not have a written and signed transfer of exclusive rights from the creator, you do not have the right to transfer and assign any rights to the Licensee. Read “The Right To Transfer Copyright Licenses.”  So the failure to have a valid, written and signed agreement generally makes the project unusable from your standpoint. 

          Thus, you have to examine the written agreement you have with the creator to make sure that you in fact and in law own the respective rights, exclusively, including the exclusive rights to market, sell and distribute the work in the territory in question and that you have the express right to transfer and assign your rights to another party.   

          But so that this article does not end here, let’s assume that you have these rights exclusively. 

The Territory Defined 

          The territory can be either a geographically defined territory or one defined by other factors, such as language or other parameters.  In the latter instance, the territory can be further geographically defined such as the right to sell and exploit a work in a given geographical region in a given language and thus the license of rights provisions in The Agreement would define limitation this as well.  So let’s say that you are licensing the right to translate a book into Spanish for sale somewhere.  The concept of territory has to be defined in terms of where the translated work can be sold.  If it is to be sold only in Spain, then that must be defined as the “territory.”  But in the European Union, the license must include the right to sell the translated work throughout the EU and thus that factor must be included within the definition of territory.  Thus, if the initial deal is for sale in Spanish in Spain, then it is in fact a deal for sale in Spanish throughout the EU. 

          There are additional issues that relate to “territory” in the above context.  Are the rights to sell in Spanish exclusive rights or do you have the right to make other Spanish language deals?  And if the rights to sell the work in Spanish are exclusive, are those rights exclusive only in Spain or throughout the EU?  Spanish is a very important language since there can be many, many different deals negotiated for exploitation in that language.  It can be a deal as above for the EU but it can also in Spanish in Latin America (as defined in The Agreement), in Spanish in the United States, worldwide Spanish and other variations.  Thus the concept of “territory” is very important especially when discussing exploitation in a language spoken in many parts of the world. 

          But what if the Licensee wants to sell the book within the geographic and language-territory but to a party who is intending to sell it outside the geographic territory?  In other words, the Licensee can claim that it is in fact selling the book in the language in the territory, although the intent of the parties is to prevent sales outside the territory.  As you can see, merely saying in The Agreement that the Licensee may only sell the book within the territory is not sufficient and creates a substantial lack of clarity.  An agreement should always solve more problems than it creates and in this instance, leaving it as indicated (or copying it from a form etc.) is likely to be the source of the problem.  Thus, the agreement must restrict the Licensee from exercising any rights to sublicense and preventing the Licensee from exporting from the territory to some place outside the territory. 

          Some agreements may talk about “open market” sales.  This generally refers to a situation in which, although the territory is defined and the rights licensed in that territory are stated to be exclusive, the Licensee is granted the further right to sell the book non-exclusively in the rest of the world, the so-called open market.  This is a potential legal nightmare from the Owner’s standpoint.  Not only does it license broad rights for what may amount to no additional fees, but significantly reduces the likelihood that Owner can make other deals in those “open market” territories since there may be a market for only one version of the book and if the Licensee is already in the market, the Licensee will likely control that market, leaving the Owner without the ability, as a practical matter, to make another deal.  Indeed, the mere fact that the Licensee has non-exclusive rights within that “open market” by definition will prevent the Owner from making any exclusive deals within the same “open market.” 

The Role of the Internet 

          Now along comes the technology complications presented by the Internet.  It is one thing to restrict sales within a geographic territory in the off line, printed version world.  But given that the “territory” online is everywhere, what provisions must be included in The Agreement in this regard?  If the book is going to be available online, The Agreement should provide that the download be geo-locked so that only site visitors from within the territory can view and download the book.  The Agreement can also restrict the sale/downloads by the Licensee online to only sales/downloads via specific sites, reserving the right of the Owner to sell and offer downloads via other sites.   


          Clearly the above issues represent only a small sample of the “territorial” issues presented by any sort of license or other agreement.  This article is certainly not intended to be exhaustive of all of the said issues or indeed of the many other issues presented by any sort of license or other agreement.  The point however is that what may seem self-evident is in fact and in law, not self-evident at all.  Any party, whether Owner or Licensee, contemplating getting into any form of such transaction should always be represented by an attorney experienced in these areas of the law.   

          Trying to save money by “doing-it-yourself” can turn out to be quite expensive if things go wrong.  Read “The Do It Yourself Publishing Lawyer.”

Copyright 2003, 2019 Ivan Hoffman.  All Rights Reserved. 


This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  You should not rely on this article in any manner whatsoever and you should not draw any conclusions of any sort from this article.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on United States laws but the laws of other countries may be different.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation. 


No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the author.



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