Unlike an agreement for the transfer of economic copyright (since moral rights cannot be transferred), under which the author transfers copyright in a work specified in the agreement and thereby relinquishes their economic rights, the Act on Copyright and Related Rights also regulates licence agreements.
Licence agreements under the Copyright Act
A licence agreement, also known as an agreement for the use of copyright, does not result in the other party acquiring economic copyright, but enables them to use the economic copyright belonging to the licensor. This authorisation to use economic copyright is limited by specifying the fields of exploitation explicitly listed in the agreement.
Types of licences
Under the Copyright and Related Rights Act, we can distinguish between exclusive and non-exclusive licences. Under an exclusive licence, the licensor undertakes not to grant further licences in the fields of exploitation covered by the agreement, and also not to exploit the work themselves in the explicitly specified fields of exploitation. However, if the licence agreement does not contain an exclusivity clause, both the creator and other persons authorised by them may use the same work at the same time (non-exclusive licence).
As provided for in Article 66(1) of the Act on Copyright and Related Rights, a licence agreement entitles the licensee to use the work for a period of five years within the territory of the state in which the licensee has its registered office, unless otherwise agreed in the agreement. Accordingly, the licence is generally valid for a period of five years, unless the parties specify a different period in the agreement or the licence is granted for an indefinite period.
Pursuant to Article 68(1) of the Act on Copyright and Related Rights, unless the agreement provides otherwise and the licence has been granted for an indefinite period, the licensor may terminate it in accordance with the contractual notice periods, or, in the absence thereof, with one year’s notice, at the end of the calendar year. This means that, in the case of a fixed-term agreement, neither party, as a rule, has the right to terminate it. However, where the agreement provides otherwise and the licence has been granted for an indefinite period or (for a period exceeding five years), the author may terminate it in accordance with the contractual notice periods, or, in the absence thereof, with one year’s notice, effective at the end of the calendar year.
The issue of restrictions on the termination of a licence agreement
In practice, this boils down to whether the phrase “unless the agreement provides otherwise” contained in Article 68(1) of the Copyright Act authorises the parties to a licence agreement to impose restrictions on the termination of the licence agreement. On the one hand, obligations of a continuing nature (which include contracts of indefinite duration) are characterised by the possibility of their termination under Article 3651 of the Civil Code. However, some legal scholars take the view that Article 68 of the Act on Copyright and Related Rights is of a dispositive nature, constituting lex specialis in relation to Article 3651 of the Civil Code, and therefore the conclusion of licence agreements for an indefinite period with a restriction on their terminability to valid grounds specified in the agreement should be recognised. Nevertheless, the question of the admissibility of concluding licence agreements without a right of termination depends on the type of licence granted. It should be noted that, as a rule, excluding the possibility of terminating the agreement will not be possible in the case of an exclusive licence agreement (due to the far-reaching consequences in restricting the exercise of the licensor’s rights), whereas it may be permitted in licence agreements under which a non-exclusive licence is granted. The latter allows – despite the conclusion of the agreement – the licensor or third parties to use the works.
This position was upheld by the Court of Appeal in Warsaw, which stated that “pursuant to Article 68(1) of the Copyright Act, the inclusion of a clause excluding the possibility of terminating a licence agreement is permitted in the case of licence agreements such as those concluded in this case — that is, non-exclusive licence agreements with remuneration set as a one-off fixed sum payable upon conclusion of the agreement, under which the continued use of the work within the scope of the licence granted does not impose any additional obligations on the licensor (see in particular: T. Targosz, in: Copyright and Related Rights. Commentary, LEX 2015, note 8 to Article 68)”. Following the position indicated by T. Targosz, it should also be noted that the grantor of a non-exclusive licence remains entitled to grant any number of identical licences, and it would be difficult to unequivocally conclude that their freedom of action would be threatened by the non-terminability of one of the licence agreements. However, the position in the case in question is not unequivocal, and the court’s ruling cited above was issued on the basis of the specific circumstances of the case.
Summary
This article analyses the issue of the terminability of licence agreements in the context of the Act on Copyright and Related Rights, focusing on the possibilities and limitations associated with the termination of such agreements. A significant difference between exclusive and non-exclusive licence agreements has been highlighted, emphasising that the possibility of terminating a licence agreement may be both limited and extended depending on its nature and the terms agreed by the parties.
To ensure clarity and avoid potential disputes, the parties to a licence agreement should precisely define the terms regarding terminability, the duration of the agreement, and the fields of exploitation for the use of copyright. Non-exclusive licence agreements offer greater flexibility primarily for the licensor, as they allow the work to be used by more than one licensee; however, they are riskier for the licensee, as the latter does not receive the work ‘on an exclusive basis’. Furthermore, when entering into licence agreements for an indefinite period, the parties should consider including termination provisions in the agreement, which may include a requirement to observe notice periods or the possibility of termination only for good cause. Given the inconsistent positions on this matter, court rulings should also be monitored as they may influence the interpretation of provisions concerning licence agreements and their terminability.
Judgment of the Court of Appeal in Warsaw of 17 December 2015, VI ACa 1735/14, LEX No. 1974097.
She specializes in civil, commercial and business law. In the corporate and energy department, her activities are mainly based on providing corporate services to companies, reviewing and preparing commercial contracts, drafting litigation and non-litigation pleadings and preparing analyses and legal opinions, particularly in the sphere of business law and energy law. She also has professional experience in administrative and civil proceedings, which she gained in Warsaw law firms. She supports the Firm's…
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