Assignment of Copyright through Terms of Use: Does E-Sign Make It OK? A Tool for B2B Sites Dealing with Unauthorized Access to Their Content?

3 02 2013

It is a common practice for Web site providers who accept submissions of user-generated content to include a license provision in their “Terms of Use” to obtain rights to use the content. Rather than relying on the uncertain scope of an implied license, the provider can clarify, and hopefully avoid disputes over, the scope of its right to use the user’s work. A typical copyright license conveys to the provider a broad, non-exclusive license to reproduce, edit, modify and otherwise use the user-generated content, while implicitly (and in some cases, explicitly) providing that the ownership of the copyright in such content is retained by the user.  The use of a “clickwrap” agreement to convey a non-exclusive license is generally well-accepted and non-controversial.

However, under Copyright Act Section 501, a non-exclusive licensee may not bring an action for copyright infringement. See, e.g.,  HyperQuest, Inc. v. N’Site Solutions, Inc., 632 F.3d 377 (7th Cir. Jan. 19, 2011). Accordingly, a Web site provider that seeks to litigate based on an improper use of user-generated content may need more. They may in fact need an exclusive license or an actual transfer of ownership in the underlying copyright.  The question is, can one obtain an exclusive license or assignment of copyright through online terms of use?


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