Copyright and licences – nature and recent changes to the law

• Essence
• When is a copyright licence required
• Licence and copyright purchase - are they the same thing
• What determines the price
• What are the latest changes to the law

A copyright licence is a legal agreement (contract) by which the author or rights holder grants another person (licensee) the right to use the created work under strictly defined conditions, without permanently transferring the authorship itself. 

In the modern digital environment, the correct licensing framework is the primary mechanism for the legal monetisation of intellectual labour and the protection of business from the unlawful use of third-party content.

For a copyright licence to be clear, robust and legally sound, it must always include the following key emphases:

• Precise definition of the rights being assigned - for example, the right of reproduction, distribution, broadcasting, translation, or adaptation;

• Type of licence - exclusive or non-exclusive. In the case of an exclusive licence, only the licensee has the right to use the work (even the author themselves does not have the right to assign it to third parties), whereas with a non-exclusive licence, the author may grant the same rights to other partners as well;

• Clear definition of the period of time for which the rights are granted and for which countries or regions the licence is valid;

• Financial terms - a fixed amount, a percentage of sales, or a combination of both, as well as the periodic provision of reports on usage;

• Termination conditions - rules and consequences in the event of a breach of obligations by either party to the contract.

When is a copyright licence required

A copyright licence is mandatory whenever an individual or business intends to use someone else's intellectual property for commercial or public purposes. 

Every time a work, whether software, music, text, photography, video or a design object, is reproduced, distributed, publicly displayed or modified by a person other than its creator, the law requires the explicit consent of the author in the form of a licence agreement.

What does a commercial purpose mean and what does a public purpose mean?

A commercial purpose exists whenever the work is used directly or indirectly to generate profit, financial gain or to support a business activity. 

• This includes embedding foreign images or music in paid advertisements, selling products with copyrighted designs, using paid software solutions for business purposes or playing background music in commercial establishments (bars, shops, hotels) in order to improve the customer experience. 

• Even if the content is offered free of charge to end users, if it serves to attract customers, close deals or promote a business, it is classified as commercial use.

A public purpose exists when a work is performed, distributed or made available to a wide, unlimited circle of people outside the usual circle of family or friends. The main difference here is that a financial motive is not necessarily required.

• In this case, the focus is the very fact of publicity—for example, broadcasting a film or music at a public event, publishing materials in open online environments, or using works in educational, cultural, or informational initiatives with wide access. 

• Since public dissemination directly affects the author's exclusive rights to control access to their work, the law requires a licence to ensure that public use is authorised in advance. 

Licence and copyright purchase - are they the same thing

No, licensing and purchasing (transferring) copyright are not the same thing and the concepts are not interchangeable. The main difference lies in the ownership of the right.

Upon purchase (final transfer), the buyer becomes the new full owner of the property rights in the work, and the author loses the ability to use it or sell it to other persons.

During licensing, the author retains ownership but grants temporary permission (rental) to another person to use their work under specifically agreed conditions. A licence is always granted for a set period, whereas a purchase transfers the rights to the buyer permanently.

Also, the author can grant a non-exclusive licence to dozens of companies simultaneously, whereas the copyright in the work can be transferred (sold) only once.

What determines the price? 

The price of the copyright licence is not a fixed amount, but is determined through individual negotiation based on the actual value that the work brings to the user. The sum depends directly on the ratio between the revenue-generating potential of the content and the degree of restriction that the author accepts on their own rights.

What are the factors that have the strongest impact on the final price?

• Licence type (exclusivity). Exclusive licences are significantly more expensive, as the author loses the right to grant the work to other clients for the relevant period.

• Territorial and linguistic scope - a single-country usage licence has a much lower value than a geographically extensive permission for multi-language distribution.

• The duration of the contract also directly determines the price - short-term rights are cheaper, while long-term or open-ended ones require a higher investment.

• Manner and scale of use – the purpose for which the work is used (e.g. a national TV commercial versus a small local website) and the expected print run, number of users, or audience.

• And last but not least: the author's popularity and reputation. The recognisability and proven success of the work on the market automatically increase its licensing value.

What are the latest changes to the law

The latest major reform of the Copyright and Neighbouring Rights Act (CNRA), adopted in November 2023 and entering into force at the end of 2023 and in 2024, transposed key European directives on the digital single market. With these amendments, the legislature aimed to provide a modern and fair environment in the digital age, ensuring greater transparency in the relations between users and creators, as well as enhanced control over online platforms. 

Transparency obligation in licensing (Art. 37 of the Copyright and Neighbouring Rights Act)

With the amendments to the Copyright and Neighbouring Rights Act, every user or licensee is now obliged at least once a year to provide the author with comprehensive, up-to-date and comparable reporting on the use of the work.

The report must include data on usage methods, all generated revenues (direct and indirect profit generated) and the remuneration due. This step eliminates practices where authors had no clarity on the real financial success of their works in the hands of licensees.

Right to additional (fair) remuneration

In the event that the initially agreed remuneration proves to be disproportionately low compared to all subsequent revenues generated from the use of the work, the author now has the legal right to request a modification of the contract. 

This rule ensures that in the event of unexpected commercial success or mass distribution, the creator will receive a fair share of the generated profit, regardless of the initial terms in the licence.

Scrapping of the 10-year licence restrictionGo

With the reform, the previous rigid legal obstacle, according to which agreements for the assignment of rights (barring certain exceptions) could not be concluded for a term longer than 10 years, was removed. 

The removal of this limit provides significantly greater contractual freedom and opens the door to the free application of standard, public and open licences (such as those for open-source software or open data) without unnecessary administrative barriers.

New responsibility for online sharing platforms

The legislator regulates direct liability for large content-sharing platforms (such as YouTube and similar VOD environments). These platforms are now considered entities that perform public communication, which is why they are obliged to make best efforts to obtain permission (a licence) from rightsholders or to take down unauthorised uploaded copyright-protected materials.

Copyright in safe hands

Arranging intellectual property licensing rights is essential for the security of any business and for the fair protection of creative work. 

The adoption of the recent regulatory changes makes the legal framework more modern, but also requires precision when drafting and renegotiating contracts. 

To guarantee full legal protection of your intellectual assets and to avoid the risks of fines or disputes, you can rely on professional assistance from the experts at IPfabrika.