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exclusive. Exclusive means that the content will be licensed only to the Licensee. Non-
exclusive means that the content will be licensed to multiple Licensees. Generally, the
cost of licensing content on an exclusive basis is much higher because the Licensor will
only have one Licensee versus multiple Licensees when the content is licensed on a non-
exclusive basis. The scope of the license also includes the permitted uses and restrictions
on the product. Again, using our website operator and content producer example, the
Licensor will want to restrict the Licensee from being able to reproduce the content and
sell it to third parties and may want to restrict the Licensee to publishing the content on
a defined number of websites.
It is essential that the license agreement be as detailed as possible when dealing with
the scope of the license because this is one of the highest areas of litigation involving
license agreements. Everyone involved needs to know exactly what the product can and
cannot be used for.
Identify the Licensed Product
What good is a license agreement without indicating what intellectual property is being
licensed? Still using our website operator and content producer example, it is essential
that whatever content is being licensed be described with as much particularity as
possible. Nowadays, the content involved in a licensing scenario is usually transferred by
the Licensor to the Licensee electronically (example, FTP). Frequently, the file name of
a particular image or video contains a series of letters, numbers and special characters
(example, tori%01234567). I have always recommended that the following information
be included in every license agreement when identifying the product: the type of
content (image or video), actual file name, file size, and file description. In this digital
age, it is very easy to see how misunderstandings can occur but by providing the most
possible descriptive information at the time of entering into a license agreement could
prove to save you a lot of legal costs in the future should a dispute about what product
was actually licensed arise.
Consideration
Consideration is what the Licensor will receive in exchange for providing a license to the
product to the Licensee. The most common form of consideration is money. While
most license agreements include a one-time fee (usually paid at the time of purchase),
other arrangements are quite common, including recurring payments such as royalties or
monthly payments. Whatever the consideration is in your particular case, the license
agreement must spell out exactly what it is, when it is, and how it is going to take place.
A frequently neglected issue when defining consideration in the form of money is the
currency. Don’t assume that the United States dollar is going to apply. One of the parties
may not be on the same page. Always list the specific currency being used in a license
agreement—or for any other contract, for that matter.
Other important subjects contained in a license agreement include the term (length
of the agreement), the right to modify or combine with other products, prohibited uses,
the right to transfer or sublicense, warranties, limitations on the Licensor’s liability,
nondisclosure of confidential information, enforcement of remedies, and termination
(what constitutes a breach of the license agreement).
In the last few years, the adult industry has been plagued with intellectual property
disputes. We have seen multimillion-dollar verdicts, sites being seized, and countless
businesses ceasing operations. It is indisputable that copyright and license holders must
do everything in their power to protect their valuable intellectual property. As noted
above, license agreements do not have to be long and complex but they do need to
include very important information that is tailored to your needs. If you are a Licensor,
it is essential that have an agreement in place that will protect you against a Licensee
that abuses the license being granted. If you are a Licensee, you need to make sure that
you get and understand the rights associated with the license that you purchasing. The
license agreement is the most important and essential part in the process of obtaining a
license and should be given the time and energy that it deserves.
I hope to see you all in Las Vegas on January 15.
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