To use someone’s else’s copyright:
- as a property right, the copyright can also be transferred by contractual assignment or testamentary transfer of rights from the copyright holder to another party. An assignment or testamentary disposition does not have to apply to all the rights related to the copyright holder’s exclusive rights. It can be limited to certain acts. It can also be limited to a portion of the duration of the copyright term, or to a particular geographical region. Assignments or testamentary dispositions must be in writing and signed by all parties concerned; or
- a licence can be obtained from the copyright holder authorising the copyright user to reproduce the work, under the terms specified in the license agreement.
Licenses stipulate the terms and conditions under which a work can be used.
They can be either exclusive or non-exclusive. An exclusive license authorises the licensee to be the only copyright user of the work, to the exclusion of all other parties including the copyright holder for the area and duration of the license term while a non-exclusive license allows two or more copyright users to use a work simultaneously.
It is important to note that when a work is bought only the physical property is transferred from creator to buyer, the copyright holder (creator) retains the economic and moral rights afforded by copyright law to the work. Therefore, even when a work is bought an assignment agreement or licence is still required for the buyer or third party to reproduce the work.
If the copyright holder either cannot be identified, or if identified, they cannot be located or contacted, the work is known as an ‘orphan work’. The copyright holder is still protected in respect of orphan works and prior to using an orphan work the copyright user must be able to show that they conducted a diligent search for the copyright holder prior to using the work and that the resources used in the search are those available in the country of origin and first publication of the work.
Copyright users can obtain the following non-exclusive licenses from a CMO/DALRO:
- Blanket license: a blanket license gives the copyright user prior authorisation to reproduce any work in the CMO’s repertoire on the terms specified in the license which typically include the usage period, quantity restrictions, payment terms and reporting intervals. This license type is generally less administrative intense for bulk copyright users and is usually only available for published editions.
- Transactional license: A transactional license gives a copyright user authorisation to use specific works which are agreed prior to using the work, for a specific purpose and specific quantities.
Royalties paid by copyright users are determined with reference to several factors, which include:
- the rights to be used
- the type and extent of usage
- the duration of the usage
- the type of license sought by the copyright user (blanket or transactional).
Distributions made by the CMO to the copyright holder generally take into account the royalties paid by the copyright user, the commission or operating expenses of the CMO, any deductions made by the CMO in respect of educational, social and cultural reserves, and any taxes due.
CMOs make distributions in terms of the mandate or as required by law.
Reporting on usage is not a major consideration when it comes to transactional licenses and related distributions because copyright users are granted a specific license to use works in the prescribed manners.
Under blanket licensing, given that copyright users have access to a CMOs entire repertoire, reporting on usage is critical as it determines the accuracy of the royalties and gives a record of compliance with the terms of the licensing agreement. The licensing agreement stipulates the reporting intervals and the type of reporting. Reporting types and therefore distribution principles vary and can include:
- full reporting – copyright user details all usage
- sample based reporting – copyright user takes a sample of usage for a specified period and extrapolates the unreported usage.