Chapter 1 - What is a Digital Licensing Agreement Strategy?

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What we call luck is the inner man externalized.
We make things happen to us.

Robertson Davies, Canadian Author

We are now witnessing a revolution in how information is acquired, stored, displayed, accessed and shared.

In the pre-Internet and pre-electronic days, museums regularly purchased print copies of materials such as books or monographs for their staff, resource centres and researchers. Museums owned physical copies of these materials. These same print materials are now often acquired in a digital format, sometimes on physical medium like DVDs and other storage media, but increasingly through the Internet and online access. Museums are re-evaluating their acquisitions policies to reflect these new times.

Similarly, the rights and reproduction departments of many museums have expanded their roles. Where photographs and slides once occupied much of the time of rights and reproduction departments, most museums are now licensing these same works to others for various digital uses such as on DVDs and other storage media, on Web sites, in electronic books, and in electronic databases and archives.

Further, Canadian museums have an active online presence in Web 2.0, from flickr to MySpace, wiki’s and blogs.

Additionally, museums “self-publish” content they own and license through creating iPod content for museum visitors, publishing e-books, developing image banks and setting up online exhibits.

The public and creators are using museum content in various new ways. This includes use of museum content for education, corporate use, and the creation of new works such as remixes.

With this revolution comes a new set of administrative and legal issues museums must face. No longer are museums solely concerned about copyright law issues like photdm-tocopying in their resource centres or publicly performing a film or video in their auditorium. Curators and other museum staff often plan their exhibits, projects, online presence and even marketing and promotion based on rights to content they own and may acquire. As such, curators and other museum staff have become negotiators and interpreters of legal agreements, in order to open the door to a wide variety of electronic content for their use and the use of researchers. It also allows the general public access to a vast variety of content to which only limited access was previously available to them. As such, licensing electronic content is now an expected and necessary part of collections management and the Intellectual Property (IP) policies of museums. This will continue to increase as more and more collections budgets are dedicated to serials available only in a digital format, and as museums look towards their intellectual property as a way to increase their revenues and to expose, share and promote the cultural assets in their collections.

Licensing electronic content involves understanding and interpreting licence agreements. Behind every good licence agreement is a well thought-out strategy. Your strategy will guide you through the myriad questions you will be facing, such as: when do you need a written licence; how does the process begin; which content can legally be posted online, what terms and conditions are in the best interests of your museum; and, what do these terms and conditions mean?

What is a Digital Licensing Agreement Strategy?

A digital licensing agreement strategy is a blueprint or plan that guides your museum as a whole through the digital licensing maze. Taking into account the unique position of museums, the strategy must examine licensing from both the perspectives of owners, and consumers, of digital content. From the owner perspective, your strategy need not repeat but should reflect your museum's IP Policy. Whereas your IP Policy will help you audit and determine your copyright assets, your digital licensing agreement strategy will take you to the next stage of granting rights to the use of those intangible assets to others and financially and otherwise benefiting from exploiting those rights.

The strategy will provide all museum staff with a single consistent approach to providing permission to use your digital content, or to obtaining permission to use the content of others. An ideal licensing strategy would cover all aspects of licensing from determining and defining the relevant content, to understanding what uses will be made of that content, to putting a monetary value on that content, to negotiating the rights that work for you, to guidelines for educating your staff and visitors re what uses of that content are permitted, to monitoring such uses, to including means to continually update that strategy to ensure it meets your technological and legal needs. Detailed strategies may include licensing fees, sample clauses, preferred clauses, and educational material about copyright and licensing.

There are all sorts of shapes, forms and sizes of digital licensing agreement strategies. While this book attempts to provide information on creating a comprehensive strategy, each individual museum will have different needs. When reading this book, think of the sorts of things that your strategy should contain. And remember, a strategy is not a static document, but similar to your online presence, it may need to be constantly updated and revised to remain effective and useful.

When to License

Licensing becomes an issue when you want to use electronic or digital content such as an online database or periodical, or when someone wants to use content owned by your museum, or when you wish to post images on a social networking site, or publish an e-book. It may be self-initiated or begin with a telephone call, an email, a snail mail letter, an order form, or you may be offered a written licence agreement.

When are you a Content Owner or Licensor?

As a content owner, you require a licence agreement whenever someone else "uses" your content. Content that a museum might own includes art work, brochures, posters, promotional materials, exhibition catalogues, presentations, Web sites, compilations, photographs, images, image banks, slides, reports, letters, business documents, books, manuscripts, podcasts, audio recordings, and audiovisual works. This content may be in analogue or traditional media, or in digital media. Under Canadian copyright law, all content created by museum employees during the course of their duties is owned by the museum.

Your museum may also own content that it acquired through an assignment of copyright. If the full rights in certain content has been assigned to you, then you have the right to license this content to others, to post it on a Web site or a social networking site, or to create a virtual exhibit.

It is likely that your museum owns much more IP than it realizes, and this may be the opportune time to undertake or to update your museum's IP audit in order to determine your IP assets.Footnote 1 The more IP assets you own, the more you have to license to others and hopefully benefit economically and otherwise from this licensing.

As an owner of content, you may be involved in some of these possible scenarios:

  • licensing a handful of works to be used in association with works by other creators. For instance, licensing three photographs from your museum's collection for use in a Web site with other photographs, text, animation, etc.
  • licensing content owned by your museum which would constitute all of the works to appear in a new “third-party” product. For example, a museum might license digital rights to its early Canadian collection for use by a developer on a DVD who would then create a DVD solely based on this collection. Similarly, you may license rights to certain museum content to a print or e-book publisher.
  • licensing works for "re-licensing" purposes. For instance, you might license the rights to digitize your museum's newsletter to one company which will then re-license these rights to DVD producers, Web site owners, educational institutions, corporations and others.
  • posting content on social networking sites (e.g. blogs, MySpace, flickr, YouTube or Facebook).
  • curation of virtual exhibits.

When are you a Consumer or Licensee?

As a consumer of content, you need a licence agreement whenever you "use" the content of others. For example, you want to use someone else's photograph or video clip on your Web site, or you want to access an online database or periodical. Use in this context includes many different concepts or rights that are set out in copyright laws and treaties. Among these rights are the right to reproduce or publish in digital or print form, transmit over the Internet, communicate by telecommunication, and perform the work in public. It also refers to content that is protected by copyright and is not in the public domain. It also refers to uses in which permission is required under the copyright statute where the work is being used and that an exception or fair dealing does not apply to that particular use.

As a museum or consumer of copyright materials, you may be involved in a number of situations in which you need to license content. You may need to license:

  • An online subscription to a journal or database
  • Content compiled by an aggregator such as Lexis-Nexis
  • An encyclopedia or other collections of content
  • Financial information, stdm-tock market sources and news feeds
  • Computer software, CD-ROMs, DVDs and other storage media
  • Non-digital content which you digitize yourself (including text, still and moving images and video)
  • Web site content
  • Intranet content

Museums are Both Licensors and Licensees

Museums are both licensors and licensees and must look at each licensing arrangement from the perspective they are facing in that particular arrangement. Given the unique position of museums, and their sensitivity to both sides of licensing, they should be the perfect negotiators! Understanding the perspective of the other side in a licensing arrangement is a key step to negotiating a licence that meets the needs of both sides.

Sometimes museums act as licensees by licensing the content of others, then act as licensors by re-licensing content they have licensed. For example, a museum may obtain a licence to use photographs, then re-license the use of those photographs for use by others either directly or perhaps through a site such as flickr. Subsequent chapters in this book guide museums through the process of licensing as licensors, licensees, and also when they may be both with respect to the same content.

Other Agreements

There are other agreements you may need in the digital world including the following:

  • Web site terms and conditions of use
  • Privacy policy
  • Web site, blog, etc. development agreement
  • List serv, blog, wiki or twitter agreement with employees and others who post messages and comments
  • Clickthrough, Clickwrap or Webwrap agreement
  • Linking agreement
  • Domain name assignment agreement
  • Licensing other IP such as trade marks and patents

Are there Industry Standards in Licenses?

There is no industry standard for licensing content by museums. Digital licence agreements, in general, were initially a hybrid of computer software, book publishing and film agreements. However, they are now a "breed within themselves" and we are beginning to see common issues and trends emerge, many of which are discussed throughout this book.

Although there are some consistencies between licence agreements, most are distinct and unique from one another, and from licensed content to licensed content. Each license must be examined and evaluated on its own, according to its own unique circumstances. There may be similarities in structure, definitions and terms and conditions addressed in various licenses. As licenses become even more commonplace, it is possible that some standards will emerge but it is impossible to predict when this might occur and to what degree there may be industry standards in museum licence agreements, whether from the perspective of the museum as licensor or as licensee.

One reason that there is no industry standard in this area is that licensing digital content is relatively new, technology itself is constantly changing and so is the manner in which we use digital content. Various content owners are experimenting with business models that best protect digital content and allow maximum benefits from it. We have witnessed the music industry struggle with this for years and seen the move from unauthorized peer-to-peer sharing of music to the Recording Industry Association of America (RIAA) suing individuals for unauthorized uses, and the creation of newer more effective business models for the use of digital music. The music industry continues to struggle with price setting and permitted uses – especially with the number and variety of vehicles an individual may now use to listen to their personal music collection. We have seen online newspapers charge for their content, allow free access to their current and archived content, and in 2011 we will see a move back to sharing for certain content in certain circumstances for certain uses. Industry standards need stabilization on many fronts. Museums can benefit from the experience in other sectors, but need to experiment with their own licensing arrangements before standards emerge.

Industry standards must take into account the fact that every museum, even two similar museums, may in fact have different needs and therefore may require different licence agreements. In addition, each licensed content may require a different arrangement of licensing terms and conditions. This is all due to the needs of curators, researchers and sub-licensees, different available technologies, as well as business and legal reasons (i.e., different lawyers may have different opinions, and different museums may have different copyright, IP and privacy policies.)

Model Agreements

As museums increasingly license digital content, the question arises whether the process would be simplified by using model licences or standard agreements that provide uniform licensing conditions. These have been more popular with respect to libraries licensing digital content than in the museum context. Although helpful, one must always keep in mind that each situation is unique and that one agreement may not fit the needs of another agreement and situation. Such models and agreements are best used as checklists of issues to be examined in your own particular circumstances, as well as educational tools.

If you come across interesting agreements (whether in the museum sector or in other sectors), use them as an educational tool. Examine the clauses in the model licences and the principles that best fit your needs. Then examine each term and condition to determine whether it is applicable to your situation. Consider what other clauses you would like in your agreement to fit your particular needs. Read the agreement from start to finish. Ensure that the additions and deletions from the model agreement or licensing principles result in a comprehensive logical agreement that fits your needs.

Collective Societies and Digital Licensing

In copyright parlance, a collective society is a group of copyright holders who band together to provide one-stop rights clearances for users of copyright protected materials. The rights may allow such uses as reproducing one article from a periodical or reproducing 10% or less of a book. There are collectives around the world representing rights holders of musical works, print works, artistic works and other copyright material. Most collectives around the world are currently licensing some digital rights to the works in their repertoires. The Copyright Board of Canada has a list of Canadian copyright collectives and their contact information.

However, with the growth of e-commerce and digital rights management technology, individuals and organizations have more options to easily and directly license their works. Museums want to follow and perhaps experiment with some of these licensing options.

Creative Commons

Creative Commons is a non-profit organization that allows content owners to protect their creative work by choosing from six different licensing options when publishing their work. The licences, which are free for use by content owners, range from only requiring attribution to the original creator of the work, to disallowing commercial uses of the work and the creation of derivatives of the work. CC has licences specifically based on Canadian law at: http://wiki.creativecommons.org/Canada.

As an owner of content, you can select the CC licence that works for you. There is a wizard on the CC site to guide you towards selecting the best licence. However, as a licensee of content, your museum should not be placing any sort of licence, including a CC license, on content that you have permission to use (for example on your blog or on flickr) without specific permission from the copyright owner for relicensing that content to others.

Note that seeing a CC licence on a digital work is not a licence to use that work without permission or attribution. You need to review the terms of the particular CC licence to see what is permitted under that licence.

Misconceptions about Digital Licensing

With the newness of digital licensing and the new opportunities for licensing content (including on social networking sites), there are a number of misconceptions already developing. Discussing and clearing up these misconceptions will help clear the path to an easier negotiating road and to better written licences. These misconceptions are important licensing issues that are discussed in further detail in other parts of this book.

Misconception #1: Not all licences are negotiable. Almost every licence is negotiable, but often you have to ask the other side if they are willing to negotiate so that you will have a licence that meets you need. Always remember to only accept a licence and arrangement that works for you in your particular circumstances.

Misconception #2: Licences must be in "heretherewithto" language. It is best for everyone to use plain English in your licences and not technical or legal language. Say what you mean and put that in writing. If the language is unclear, ask the other side what things mean. Define terms in the licence that are unclear.

Misconception #3: I need a lawyer. Often content owners and users know more about digital licensing than lawyers. Do not be intimidated by not having continuous access to a lawyer. Do your homework and ask questions so you are comfortable with the arrangement into which you are entering.

Misconception #4: Renegotiating every year is mandatory. Nothing is mandatory! Negotiating is time-consuming and costly. At the same time, technology is changing rapidly and so is the way we all use digital content. Lengthy durations for licence agreements may not be appropriate, so consider an automatic renewal clause, provided that both parties are satisfied with how the licence is working out for them and provided each side has an opportunity to positively opt-in to the renewal.

Misconception #5: You can control your users. The licence agreement you sign is between you and either an owner or user of content. Your licence only contractually obligates you and that owner or user. As such, you cannot agree, or expect the other party, to police subsequent users of that content. However, you may wish to educate staff and researchers about legally using licensed content, and obligate any user licensing your content to do the same.

Misconception #6: You may restrict fair use or fair dealing. Parties to a licence may agree to limit fair use or fair dealing between the parties subject to the agreement. However, any other persons are not bound by that agreement. These persons may apply the relevant copyright law to their use, which means that fair use (if the work is being used in the U.S.), or fair dealing (if the work is being used in Canada), would apply to that licensed content.

Misconception #7: Standard licences are the answer. Each situation is unique. Although model or standard licences may seem like the answer to avoid costly and time-draining negotiations, you must always look at your own particular situation and find an arrangement that is suitable to your needs.

Misconception #8: One side always loses in negotiations. In the ideal world, negotiations should be "win-win." In other words, both parties should be satisfied with the end result. This, of course, is not always possible. By being prepared before entering into negotiations and by understanding your needs as well as the needs of the other party, you will be taking the right steps to finding an agreement satisfactory to both sides.

Your Next Step

You should now understand the concept of digital licensing, how it fits in with your overall Intellectual Property Policy and general management of copyright issues in your museum, and why it is important to develop a written Digital Licensing Agreement Strategy that fits the particular needs of your museum. Your next step is to begin creating your written strategy.

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This resource was published by the Canadian Heritage Information Network (CHIN). For comments or questions regarding this content, please contact CHIN directly. To find other online resources for museum professionals, visit the CHIN homepage or the Museology and conservation topic page on Canada.ca.

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