3 Key Types of Licensing Agreements Every Creator Must Master for Successful Deals (+ Practical Examples)
Want to know which types of licensing agreements to use for your deals? I’m sharing exactly which ones you must know about to choose the best one for each type of deal.
Whether you’re working with brands, licensing out existing content, or using content from someone else, if you’re anything like me, you want to ensure you have the types of licensing agreements for each situation to get the most out of your deals. As a lawyer myself who creates contracts for creators like you, I am sharing key things you need about the different types of licensing agreements to maximise your income potential and protect your creativity.
You will learn all about which types of licensing agreements to use for different situations, including different licensing examples, and how to use these types of licensing in international business as a global creator.
After learning about the key types of licensing agreements, you will get the most out of your deals, maximising income potential while protecting your creativity as a creator!
This post is all about the three most important types of licensing agreements you must master to choose the best one for each unique situation.
Key Types of Licensing Agreements
What are the 3 types of licensing agreements
There are 3 types of licensing agreements. What are the 3 types of licensing agreements? These are the licensing agreements you must know:
Exclusive licensing agreement
Sole licensing agreement
Non-exclusive licensing agreement
Let me explain what each of these types of licenses are in more detail.
But first, you need to understand what a licensor and a licensee are:
A licensor is a person giving a license to certain intellectual property (IP) rights. This person may be an individual or a company. Usually, the licensor is also the owner of the IP rights. However, that does not have to be the case. That person can also have a license to the IP rights and, in turn, licenses those same rights to someone else. This is referred to as sublicensing. Remember this for the examples I will use later in this blog post. But for now, remember that if you, as the creator, are licensing out your content to another person, you are the licensor.
A licensee is a person (which may also be an individual or a company) receiving a license to certain IP rights from the licensor. This person may also be an individual or a company.
Now that you know what a licensor and a licensee are, we can get into the types of licensing agreements.
Exclusive licensing agreement
An exclusive licensing agreement is one of the types of licensing agreements by which the licensor (the person giving the license) gives the licensee an exclusive license to use certain intellectual property (IP) rights specified in the license agreement to the exclusion of everyone else, including the licensor.
This is the most important part of the license definition: Only the licensee gets to use those rights specified in the licensing agreement. The licensor can not give a license to those same IP rights to anyone else. The licensor, the one giving the license, can also not use those IP rights.
I emphasise this because this is a major mistake I’ve seen made in license agreements. A lot of creators think that if they give an exclusive license to a brand or another creator, they still get to use those same IP rights themselves because they remain the owner of those rights. That is not true.
It is true that the licensor remains the owner of those IP rights licensed out to the licensee. It is also true that the exclusive licensing agreement can stipulate that the licensor can also use those same rights under specific circumstances that must be clearly specified in the agreement.
However, the licensor can not use those IP rights in any other case.
What a lot of creators mean to grant to the licensee when they want to use those same IP rights themselves is a sole license agreement.
Sole licensing agreement
The sole license agreement is one of the types of licensing agreements by which both the licensee and the licensor get to use those IP rights that are licensed. But no one else gets to use those same IP rights. The licensor does not get to license those same IP rights to anyone else.
However, the licensor has complete freedom to use those IP rights licensed to the licensee.
This is what most creators mean to grant to brands and other creators when licensing IP for collaborations: The brand or other creator gets the benefit of using the IP to the exclusion of third parties, while the creator gets to use that IP too for whatever they want.
Non-exclusive licensing agreement
On the other end of the spectrum of these types of licensing agreements is the non-exclusive license agreement.
With a non-exclusive license, the licensor grants the licensee a right to use certain IP rights, while the licensor can use those same IP rights, too, and the licensor gets to license those same IP rights to anyone else.
So, anyone you grant a non-exclusive license can use those IP rights.
This license may not be the ideal one of these types of licensing agreements for brand deals and collaboration. However, this is the license creators will want to use for digital products like eBooks and guides, or online courses they sell, which we’ll get into in more depth when I explain the different licensing examples for creators.
The 4th type of license
To give you a complete view of all types of licensing agreements that are out there, I do want to inform you about the 4th type of license you probably won’t use as a creator.
It’s an open license.
An open license is a license that allows anyone to use that license freely.
You may have heard of Creative Commons licenses, which are granted for creative works like text, images, and videos. Or, in the case of coding and software, you may have heard of the term ‘open source’, which also refers to open licenses.
However, as this license is not really relevant to you, we won’t go deeper into this type of license.
Licensing agreement examples
As a creator, there are multiple situations in which you may grant a license to a brand or another creator or even receive a license from another creator.
There are several common licensing agreement examples for which you’ll need to grant or receive a license, which are the following:
Brand sponsorship deal: In the case of a brand sponsorship deal, the brand is paying you to create content to post on your platform for the brand. In that case, you may provide the brand with a license to use that sponsored content for promotion on its own platform. What type of license do you give the brand? Or perhaps the brand wants you to assign full ownership of that sponsored content to the brand. What do you do in that situation?
User-generated content (UGC): A brand may also pay you to create content for the brand to use on the brand’s platforms. What kind of license do you give the brand? Do you ask for a one-off payment for an exclusive license with an indefinite term? Or do you ask for monthly royalty payments for a sole license?
Licensing existing content to a brand: A brand may also approach you for a license to content you’ve already posted. For example, maybe you are a fitfluencer, and you have posted a recipe for a healthy smoothie using almond milk from a certain brand. That brand in almond milk may ask you if they may use your content to promote their almond milk, sharing your recipe with their audience. What type of license do you give that brand?
Licensing existing content to a creator: Maybe you’ve posted a beautiful photo of the skyline of Atlanta, and a blogger in Atlanta would like to use your photo for one of their blog posts. Do you grant that blogger a non-exclusive license free of charge and only require them to include a link to your Instagram or website (because they are a small blogger)? Or do you grant a license in exchange for a license to one of their own photos?
Using existing content from another creator: What if it’s the other way around? What if you see a cool video or photo created by another creator that you would like to use for your own platform? What kind of license do you ask for? What do you offer that creator? Also, make sure to read my blog post on the 7+ (Legal) Essentials You Need in Your Copyright Permission Request Email (+ Free Email Template).
Guesting on another creator’s podcast or YouTube channel: What if you are a guest on someone’s podcast or YouTube channel? What kind of license do you give them? You also want to ensure you are not misrepresented on another’s platform. And what if you’re not paid, but they may want to use their recording of you for their advertising? What kind of restrictions or limits do you put on that license?
Having a guest on your platform: What if you have a guest on your platform? What kind of license will you ask them to grant you? What if they want to use parts of your recording on their own platforms? Or maybe you want them to promote your podcast episode or YouTube video on their platforms. What kind of license do you grant them?
To get the answers to what types of licensing agreements you need for each of these situations to maximise your income and protect your IP and creativity, read my next blog post!
Using the 3 types of licensing in international business
As a creator, your business is not limited to borders. You’re doing business with brands and creators in different states and countries where licenses may be interpreted differently (especially in countries where English is not the first language). This makes all the different types of licensing in international business a bit more tricky.
It’s crucial for you to have the proper wording in all types of licensing agreements you use. In all the different contracts with different licenses I sell in my contract shop, I have included the proper wording to make it crystal clear what types of licenses are granted or received, what rights are attached to each type of license and what limitations the use of that license has.
By using my contracts, which include all 3 types of licensing agreements discussed in this blog post, you’ll have clarity on how and when each party may use the license. Check out my contract shop!
This post was all about the ultimate types of licensing agreements creators must know about to create the best opportunities in each situation.
Want to learn about the key basics of a license agreement? Read this blog post on What Is a Content License Agreement | The Ultimate Guide (Including 11 Key Essentials).
Want to learn more about the crucial terms you need in a license agreement for all 3 types of licensing agreements? Read this blog post on the 11 Must-Haves for Every Content License Agreement.
Are you requesting a license to someone else’s content? You must read this blog post on the 7+ (Legal) Essentials You Need in Your Copyright Permission Request Email (+ Free Email Template).
Need a license agreement to grant or receive a license with all 3 licensing options? Get your license agreement on this page of my contract shop!
Are you a creator who creates content for brands to use on their platforms? Get your content creator agreement on this page of my contract shop!
Are you being sponsored by a brand to create and post something for the brand on your platforms? Get your brand sponsorship agreement on this page of my contract shop!
