OWNERSHIP OF LICENSED PROPERTIES
Persons seeking to start a merchandise licensing program typically assume that they own the rights in the properties to be licensed. However, as illustrated below, this may not always be the case.
Previously Licensed Works
If the licensor has previously granted a license for the property or for a work from which the property will be derived, the licensee under that previously granted license may also control the merchandise rights in the property. For example, under most book publishing agreements, the author is required to grant certain subsidiary rights, including commercial and merchandising rights, to the publisher, and the publisher controls the licensing of those rights.
If one or more other persons contributed to artwork to be used in a licensing program, that artwork may qualify as a joint work. If the artwork qualifies as a joint work, the licensor and the other contributor or contributors will be equal co-owners of the copyright in the artwork. All of the contributors will have to join in any exclusive license for the use of the artwork, and each contributor will be entitled to an equal share of the proceeds from any such license.
Works Created By Others
In some cases, the person seeking to license artwork will not be the creator of that artwork, but will instead claim to have acquired ownership from another person, such as a deceased parent or grandparent. Claims of acquired ownership give rise to two questions:
(1) Are the works in question protected by copyright? If the works were created prior to January 1, 1978, it is possible that some or all of the works may have fallen into the public domain.
(2) Did the would-be licensor actually acquire sole ownership of the copyrights in the works? The answer to this question will usually depend on the provisions of the deceased creator(s will, or, if the creator died without a will, on the intestate succession statutes of the state in which the creator last resided. It may be necessary to obtain copies of probate court records to verify the licensor(s claims of ownership.
Merely coming up with a word, logo or other element to use as the basis for a licensing program does not guaranty that the would-be licensor will own trademark rights in that word, logo or other element. If the mark selected by the licensor is likely to be confused with another trademark that is already in use (whether registered or not), the licensor will be prevented from using the selected mark.
Tips for Dealing With Ownership Issues
If you are a licensor, you should confirm that you have sole ownership of the rights in the property to be licensed, and that the property can be protected from infringement by others. This may include reviewing existing contracts for the property to determine if merchandising rights have already been granted to another licensee, obtaining assignments of rights from others who may have contributed to the property, and reviewing probate records to determine if title to the property has clearly been passed to you. In addition, you may need to investigate to determine if the property has fallen into the public domain, or, in the case of a trademark, if the same or a confusingly similar mark is already in use.
If you are a licensee or a licensing agent, you should confirm to your satisfaction that the licensor holds the merchandising rights in the property, and that the property can be protected.