Chapter 2 - Creating Your Strategy One Step at a Time

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Everyone thinks writers must know more about the inside of the human head, but that is wrong. They know less, that's why they write. Trying to find out what everyone else takes for granted.

Margaret Atwood, Canadian novelist, poet, critic. Dancing Girls, "Lives of the Poets", (1977).

Licensing is Simple

Simply put, your licensing strategy involves five steps. First, you must determine the needs of your museum's staff and researchers and possibly the general public. These needs include how the licensed content will be used by these persons. Second, you must understand the needs of the other party, whether that party is the content owner or user of content. Third, you must find a reasonable compromise between the needs of your museum and that of the other side. Fourth, you need to negotiate the best possible licence. Fifth, you want to start benefiting from the licence arrangement.

  • Define your role
  • Develop a licensing needs assessment
  • Confirm the deal
  • Negotiate the licence
  • Implement the arrangement

Step 1: Define your Role

In each potential licensing arrangement, your museum must first define its role as licensor, licensee, or both. Are you a licensor licensing the use of images on the cover of a corporation’s annual report? Or are you a licensee, obtaining rights to use an image database in your resource centre? In many situations, you will obtain access to use content, and that use (such as posting on YouTube) will allow others to also use the content, and possibly even manipulate it and/or use it in a collaborative work. In this latter situation, consider yourself a licensor who sublicences the rights you obtain. (The notion of sublicensing will become clearer as you develop your licensing agreement strategy and consider licensing terms and conditions that exist in licence agreements.)

Step 2: Develop a Licensing Needs Assessment

Your best friend in the licensing process is a blank piece of paper. Odd as it sounds, the way I recommend you enter into any new licensing relationship is to start with a blank piece of paper and a pen – or a blank screen on your computer – and begin jotting down all of the things you want out of this licensing arrangement. This will also help you take into account many “business” decisions a museum must make prior to getting to the licence agreement itself.

With the many and ever increasing amount of digital licensing opportunities, you should never begin a licensing relationship by drafting a licence to offer the other party or by reviewing a licence a content owner offers you. The licence agreement is a document which should summarize all of your discussions and negotiations and should never be your starting point. The agreement is often full of legal and technical terminology that may distract you from some of the essential and initial points of a licence which you need to consider.

Needs-Based Licensing

You should always know what you want to accomplish before beginning any new licence negotiation or drafting. To get you started in filling up your blank paper or screen, below is a list of questions or points you should consider. They should be seen as a way to guide your discussions with others in your museum so you are directed in your consultations. Consult with your colleagues in responding to these questions and make sure that your points include the many different perspectives of people in your museum. Negotiating a licence is a group effort within your institution and will have implications in various parts of your institution. Some people to be consulted are: museum director, senior management, museum board, curators, legal counsel, librarians, archivists, education department, purchasing department, marketing department, publications department, and your information systems and technology office.

If you are a licensee, it is a good idea to obtain feedback from your staff and researchers as to how the licensed material is to be used, including the format needed to make it most accessible and useable. One key point is whether the content will be used internally, for example for research purposes, or will be used in a manner that will allow its re-use. Re-use may include your museum licensing images for posting on a blog or on Facebook; such images may be “used” in copyright terms by the public, as-is, adapted, or in a collaborative project. You must be aware of all of these and other issues when licensing or posting content online, and verify whether or not you have the right to do so, or have the licences with the content owners that permit such re-uses.

It is best for one person to co-ordinate all of this internal consulting in order to ensure an organized approach to your licences. It is also ideal for one person to be the lead negotiator for purposes of consistency.

The points below are the key usage, practical and strategic points you will inevitably face when signing a licence as a licensor and licensee. On many issues, your museum, from either a licensor or a licensee perspective, has to ask itself the same questions in determining its licensing agreement strategy. On some issues, the questions for a licensor or licensee do differ. So start thinking about the various issues and put aside planning time to consider and formulate your responses. You will find that the time spent before you even have a licence will provide your museum with a solid basis for consistent licensing agreements that meet your needs in the short and longer term.

You may also find it helpful to continually be in the process of creating and amending a Licensing Agreement Policy which will refine the questions below and add other key questions. Licensing agreement policies are further discussed below.

Digital Licensing Agreement Strategy Issues

The issues raised below are discussed in great detail in subsequent chapters of this book.

Content Issues

Why do you want to license this content? (On the licensor side, you may want to monetize certain content, or license it to promote your museum online. On the licensee side, you may want to license the content of others for use in museum research.)

What are the competitive products to the one you are licensing; and would you be interested in licensing these other ones if you cannot agree on suitable terms and conditions for the initial content you want to license? (As a licensor, you want to be aware of the content you are up against so you know how to market and price your own. As a licensee, you want to be aware of the alternative products so you can determine the value of the one at hand in comparison to similar products.)

What content are you licensing? Include title, ISBN or ISSN, and a brief description of the content. Do you have or require a sample of the content? (The more accurately you can describe the content, the less confusion there will be in the future when identifying that content.)

Do you already subscribe to this same product in print? If so, are there any financial or other advantages to be gained by this? (For example, this may apply to a text publication.) (This is a licensee question.)

In what format will the electronic content be provided? On DVD, through the content owner's server, via an intranet? (As a licensee, you need to know how you will be able to access that content. As a licensor, you have to consider additional choices such a free Web site or social networking venues.)

How often will there be updates to the electronic material? How will these updates be delivered? (Your museum wants the most up-to-date content and wants to be able to provide such content to others.)

Does the licensee require any archival rights after the termination of the licence? (As a licensee, you may already have the print version of the content, but if not, you may need to have ongoing access to a digital database, for example, after the expiration of the licence.)

"User" Issues

Who will be using this content? For example, will the users be library staff, other employees, patrons, members, faculty, students, alumni, visiting professors, or the public? How about museum staff? Will the use go beyond a closed/private network? (Scope of use may relate to pricing from a licensor or a licensee perspective.)

How will the content be used? Will it be printed, downloaded, stored electronically, emailed to others, etc.?

What uses will be made of this content? Internal, external, Web site, intranet, social networking sites, access through on-premises computers, included in an e-book or e-publication?

What sort of access is necessary? From a single machine, from a resource centre in a museum, library or educational institution, remote access on campus (or from a different corporate location), in the state/province, country or from other countries?

How many people must be able to access the content at any one time? How many simultaneous users need to access the content at the same time?

Licensee Issues

Will authentication of authorized users be necessary? Is the licensee easily and inexpensively able to do this? Will the content owner set this up?

What mechanisms does the licensee have in place to ensure user confidentiality?

If the content is to be used by your museum’s library, will the library have to make a copy for interlibrary loan? Email interlibrary loan or by print?

How can the licensee ensure the content is used according to the terms and conditions of the licence? Keep in mind that it will probably be impossible to police the use of the content by those accessing the content from the licensee's premises.

What is the licensee's budget for this content? A range may be more appropriate than an exact dollar amount. You may also want to break up the costs into setup cost, storage cost, maintenance cost, etc. Take into account your budget, and perhaps lawyers’ fees, related to licence negotiations.

Is any additional hardware or software required in order to be able to access the content, and who would be responsible for related additional costs for these?

What is your preference for payment schemes? Flat rate, pay-per-use, subscription basis, etc.

Will the content owner provide the museum with documentation and support for using the content?

Does the content owner warrant how it will address downtime when access to the content will not be possible? Or if some of the content is removed from the database?

Licensor Issues

Do you own the content outright? (If so, then your museum may use the content in any manner it wishes.)

Do you have a partial assignment of rights or a licence that allows certain re-licensing of the content? What are you permitted to re-license? Is your permission limited by media, time or geographical location? (If you own some rights, you may only need to obtain partial rights in your licence agreement. For example, you may have the right to digitally archive images that physically exist in your museum, but you need to obtain the rights to post those same images in MySpace or publish them in an e-book.)

Do you have a waiver of moral rights and is it necessary considering your particular situation in licensing the content?

Licence Issues

What duration of the licence would work best for you?

Would you want the licence to automatically renew?

Under what circumstances would you like to be able to terminate the licence?

What state/province and country's law should govern the licence?

Are there any special circumstances you need to include in the licence concerning this content? (for example, required clauses mandated by law or by internal policies.)

Administrative Issues

Who will be negotiating the licence? Or will it be a team of negotiators (in which case, who is your primary negotiator)? (Did you do your research on the negotiators on the other side?)

Who will be responsible for ensuring the terms and conditions in the licence agreement are met during the duration of the licence?

How will you keep track of this licence and manage your other licences?

Who will sign the licence (e.g. legal counsel, accounting representative, museum director or other person)?

Step 3: Confirm the Deal

Once the blank page is filled up, the next step for the licensor is to offer the licensee a written agreement.

As a licensee, your next step is to read the licence agreement offered to you (assuming one is offered to you.) To determine what is being offered to you, you may need to carefully re-read various chapters of this book. If you are a licensee, always ask the content owner about clauses you do not understand - the content owner can be your most valuable source in understanding what is being offered to you.

Reviewing the Licence

Once you are comfortable in understanding what is being offered to you, you should make notes comparing your initial blank page notes and what is set out in the licence. Identify sections of the licence that work for you, and ones that require editing. Make a list of items that are missing from the licence which you would like to see added to it. These additions may later fit into existing sections of the agreement, or may require new sections to be added to the licence. Be organized in your approach to reviewing the licence.

Step 4: Negotiate the Licence

Step 4 involves discussing with the other side how to find a compromise between what works for you and what is being offered to you. Chapter 4 provides helpful tips to guide you through this stage of negotiation. Always keep in mind throughout your discussions that there is no such thing as a "correct" licence. The best agreement is one with which both the licensor and licensee are satisfied.

Negotiating a licence may be an art and skill within itself. It may be helpful for you to consult resources on negotiation as well as brush up your skills with a course in this area.

Step 5: Implement the Arrangement

Once you have a signed agreement, you want to benefit as much as possible from the newly licensed content. As a licensor, you want to efficiently provide the licensee with the content and ensure it is in a format which allows immediate use. You also want to keep track of any payments due to you, and you want to have some sort of system to ensure that the content is being used as agreed upon. As a licensee, you want to obtain the content, use it (in your resource centre, online, etc.) and notify any authorized user that you now have the right to use that content. You also want to notify users of the terms and conditions relating to the use of the content. As a licensor or a licensee, you want to keep track of your agreements including their termination dates so that you can take steps to renew them (if applicable) at the appropriate time.

Considering a Digital Licensing Agreement Policy

A Digital Licensing Agreement Policy can be a valuable tool for digital collections management. It can make licensing much easier in your institution by providing a more consistent licensing process. A good policy ensures that your museum has examined relevant licensing issues before entering into any new licensing arrangements. It also ensures that one person's memory is not be at the root of your museum's licensing strategy and acquisition of, or licensing of, your electronic content. Your policy is also a summary of your museum’s approved approach to licensing and can accelerate the licensing process and make it easier for all. Your licensing agreement policy is a written document that is the basis for all licences entered into by your museum.

Your Digital Licensing Agreement Policy may be a stand-along document or it may be part of other museum policies such as your overall Intellectual Property Policy.

Developing a Digital Licensing Agreement Policy

Your Digital Licensing Agreement Policy should set out the minimum requirements in any licence agreements you enter into. When licensing content, you will have to decide based on the circumstances what is the appropriate type of arrangement and how you should set this out in your agreement. At one extreme is a simple document identifying the parties, the works being used, the purpose of their use, length of use, payment, the rights being licensed, a warranty that states the works are in fact owned by the party who is licensing them, and signatures of both parties. At the other extreme may be a 20-page agreement full of legal terminology. In any licensing situation, you must examine your own perspectives and goals, as well as take into account the other party's, and tailor your negotiations and agreements to match your particular circumstances.

Ask Questions

When developing your Digital Licensing Agreement Policy, you may want to start with addressing the minimum requirements and issues of a basic licence agreement:

  • Who are the parties to the agreement
  • What content is being licensed
  • Who owns the original content
  • If the museum is digitizing the content, who owns the digital version of the content
  • How will the content be used
  • How long will the content be used
  • In what format(s) will the content be used
  • How much will the content cost
  • What rights are being licensed (i.e., what uses will be made of the content)
  • Warranties from the content provider

It may be easiest to address these complex issues by responding to the questions set out above in the Licence Issues section of this chapter.

Review Existing Licences

Once you have started with the basic requirements and issues of a licence agreement, you may then wish to examine various licences to which you have entered. Review past licences and create a list of the consistent points from licence to licence. Then consider tracking all the terms and conditions that vary from licence to licence. It may be helpful to examine what clauses you liked and did not like in other agreements. It is also worth noting clauses you found were not workable once a licence was signed, or clauses that limited your access to the content in any manner. You might include in your Policy circumstances under which you need to deviate from the Policy's minimum requirements, as well as provide a list of circumstances in which you are flexible and may be open to various negotiable clauses.

A helpful part of your Digital Licensing Agreement Policy will set out how new licences or proposed licence arrangements are reviewed and approved within your institution. It should also set out who is involved in which stage(s) of the licensing process.

A Digital Licensing Agreement Policy is not developed overnight. It takes time to create, and may require review or amendment after new licences are signed, or when technology, law or corporate policies change. Amendments to the Policy may be required on a regular basis, and therefore be subject to a regular (e.g. quarterly or yearly) review. If you do not have continual access to a copyright lawyer to help you prepare and update your Policy, it may be a good idea to have a lawyer review it periodically both for legal issues and for licensing and negotiation strategies. Also, you may wish to set up a review committee to periodically review and suggest amendments to your Digital Licensing Agreement Policy.

The following is an example of a draft digital licensing agreement policy for a fictional museum, the Arts and Crafts Museum. This is a very simple policy and is a good starting point. Yours, however, may be more detailed especially after it has been revised a number of times to take into account new licences to which you have entered. Yours may also include the list of questions set out in the section in this chapter under Digital Licensing Strategy Issues. These questions are a helpful checklist when reviewing any new licences.

Digital Licensing Agreement Policy for the Arts and Crafts Museum

  1. Purpose of Policy

    The purpose of this policy is to educate Arts and Crafts Museum staff about licensing basics and to provide a consistent procedure for licensing content for the museum. It is not intended to act as a substitute for legal advice and proper legal advice should be obtained when necessary.

  2. What is a Licence Agreement?

    A licence agreement is a written contract between a user and a content owner that sets out the terms and conditions under which a user can use content. It summarizes the negotiated licensing arrangement. As a content owner, we require a licence agreement whenever someone else wants to use our content. As a user of content, we need a licence agreement whenever we use the content of others. For example, if the Arts and Crafts Museum wishes to use a piece of artwork or a photograph on its Web site, the Museum must enter into a licence agreement with the artist to do so. A licence agreement will be necessary for accessing online journals and electronic databases. The Arts and Crafts Museum is both an owner of digital content and an organization which uses the digital content of others. As such, it may need to look at each licence agreement from the Museum's perspective in that particular situation.

    Posting content on a social networking site such as flickr or YouTube involves licensing issues. First, the Museum must have the right to post the photographs, video or other content. And second, the Museum may need to put a licence on that content relating to how others who access that content may legally use it. For example, in flickr, a Museum may choose one of the Creative Commons licences for its posted content.

  3. A Primer on Digital Licence Agreements

    As licence agreements are legal contracts, it is important to understand the basics of contract law. A contract sets out the relationship between two parties and can help avoid future conflict. It sets out the rights and obligations of each party as agreed upon by those parties.

    Contract basics

    A valid contract has the following three components:

    • An offer to do something or refrain from doing something (for example, to purchase a book or license software or an electronic database);
    • Acceptance of the offer;
    • Consideration. Consideration is of some value in the eyes of the law. Money is a common example of consideration. However, a promise to perform a service or supply goods is another.

    Common clauses in digital licence agreements

    It is important to note that licence agreements are open to considerable creativity by the parties involved. However, it is important that a licence agreement contain the following basic clauses:

    • Parties to the contract. A licence agreement should state the legal names and address of the parties who are subject to the agreement.
    • Purpose of the contract. The purpose of the licence agreement should be set forth. For example, to license software, photographs or artwork.
    • Rights and obligations of each party. The rights and obligations of each party should be set out in the licence agreement. For example, the artist is to provide the Arts and Crafts Museum with a picture on DVD for the Museum to include on its Web site, while the Museum must only post that picture for a maximum period of 90 days from the signing of the licence.
    • Usage of content. The licence agreement should set forth how content can be used and how long it can be used. For example, a photograph may only be used on the Museum's Web site for a period of 1 year, or an online journal may be accessed for 1 year, on the premises of the Museum or through the Museum’s server from anywhere in the world.
    • Compensation. This clause sets out how much compensation will be provided to the content owner for use of the digital content.
    • Copyright ownership. The agreement should discuss ownership of copyright. For example, an author/consultant retains ownership in software but licenses it to the Museum for usage.
    • Warranties. Warranties in a licence agreement set out promises that parties have made. For example, the content owner warrants that it is the owner of the content he is licensing to the other party.

    The licence agreement may have a number of general provisions relating to such things as applicable law, arbitration, etc. The Museum's lawyer will be of assistance in ensuring that these general provisions protect the interests of the Museum and comply with any other institutional policies.

  4. Procedure for Licensing Digital Content

    Below is an overview on how content is generally licensed at the Arts and Crafts Museum. Consult Mary South, marysouth@artsandcraftsmuseum.ca, tel. 613.xxx.xxxx, prior to obligating the Arts and Crafts Museum to any licence. Ms. South has a list of Museum employees who are authorized to sign licence agreements.

    If you wish to use content that the Arts and Crafts Museum does not own, or if another party wishes to use content that the Museum owns, a licence agreement must be negotiated. If you are provided with a licence for the use of digital content that seems to be complete and not subject to negotiation, the first question you must ask the supplier of that content is whether the license is negotiable. Even if the content owner says that the licence is not negotiable, if there are terms and conditions in the licence which do not work for the Museum, try to amend these clauses. Often, even apparently non-negotiable licences are negotiable.

    Before negotiating a licence agreement, it is important to first determine whether the Arts and Crafts Museum has ever entered into a similar licence agreement. This can be done by looking at the Arts and Crafts Museum Licensing Binder (or electronic database) which categorizes all of our agreements by subject area (i.e., Web site, software, journals, periodicals, database, etc.), as well as by name of the publisher/content owner or licensee. It is also worth checking to ensure that the licence does not conflict or overlap with existing licences.

    If you find similar content has been licensed in a previous contract, examine the clauses in that other agreement, and find out if any of the clauses were problematic for the parties involved. For example, did the Museum run into problems with usage restrictions imposed by the content owner that prevented staff and researchers from accessing material? If similar content was not covered in a previous contract, then look at other agreements in the binder or database to see if the arrangements between the parties are similar to the type of arrangement you wish to have. Determine how this new situation differs from previous arrangements and if there were any problems in the past that you can avoid. Write down the basics that you wish to have covered by your new licence agreement. Review the “Common Clauses” in section III of this Policy to ensure essential issues are addressed in the licence.

    It is important to remember that licence agreements will be different and will need to be adapted to meet the changing needs of the Museum. Before signing a licence agreement, review its wording carefully to ensure that you know what it means and ask questions internally and to the other party to the agreement until you understand everything clearly and are comfortable with the language and terms and conditions set out in the licence. Remember that you may not be authorized to sign an agreement on our Museum’s behalf and you may need to ask the authorized person to do so.

  5. FAQs

    The frequently asked question section of the Policy should set out questions that arise from each digital licensing arrangement. Chapter 7 provides a number of questions and answers that would be useful to add here, however continue to update this section with questions that arise in your museum.

Are You Ready?

They say a little knowledge is a dangerous thing. In terms of digital licensing, you should not let that scare you off. In fact, I often say that negotiating a licensing agreement is like the "blind leading the blind" since we are all relatively new to this process. Learning about digital licensing is a lengthy process. You may read about licensing, take a course on this topic, discuss it with colleagues, and even negotiate and interpret a few licences and still feel that you have much to learn. You may take some comfort in the fact that not all that long ago, we were all new to licensing. We are already great students in licensing content through our experiences in working on licences as content owners and as licensees. We can look forward to learning more about digital licensing over the next several years while establishing licences that meet all of our needs.

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