by Attorney Richard Stim

Whether or not your rights will revert to you is the main difference between licenses and assignments.

Think of an assignment like the sale of a house and a license like a rental. In an assignment, you usually give up all ownership rights to your art. In a license, you temporarily transfer your rights but you retain ownership of the art.

If you are negotiating a deal for your art, you may have to decipher the proposed agreement to determine whether you are being asked to license or assign your work. Nowadays, companies who acquire rights from artists and designers have blurred the line between assignments and licenses. The challenge for you is sorting out what the agreement is trying to do and then deciding if it's right for you. Here are a few tips:

Will You Get the Rights Back?

Don't let the title of an agreement fool you. Some assignment agreements are mistakenly titled "licenses" and some "exclusive licenses" have the same effect as an assignment. What you need to sort out -- regardless of the title -- is whether you get the rights back once the agreement is over. This return of ownership is usually referred to as a "reversion" or "reversionary rights." If you get the rights back, you are most likely dealing with a license.

Reversions in License Agreements

Reversionary rights are common in most license agreements -- especially if the license has a fixed term of several years. Look for provisions entitled "Termination," "Term," "Reversion," "Grant of Rights," "Exploitation," or "Commercialization" to find reversionary rules. But be careful if a license agreement says it is "perpetual" or lasts "for the life of the copyright" or has similar language. There may not be any reversionary language and the agreement may not deal with the issue at all. This type of agreement would probably amount to an assignment of your rights.

If you locate language in a license agreement that describes a reversion, you need to determine the circumstances in which your rights would revert to you -- in other words, what has to happen in order for you to get the rights back. Ideally, you would want the rights to revert in the event that (1) the agreement terminates, (2) the company stops selling your work for a fixed period of time, (3) the company doesn't start selling your product by a certain date, or (4) the company materially breaches the agreement. (There's no sense asking for reversion in the event that the company goes bankrupt -- federal laws usually prevent that from happening.)