This article is part of a series on drafting tips for contract clauses. 

A "rights granted" clause defines the rights granted to a licensee to use or deal with certain property. It can be very broad (eg all rights in a work) or very narrow (eg television broadcast rights in a particular territory for a particular duration).

This article focuses on rights granted clauses for intellectual property ("IP"). The legal rights granted may be in one area of IP law, or in a combination.

The rights granted may be a right of copyright in a work, a registered trade mark right, a right to patented technology, a right over a registered design, a right over a plant variety or consent regarding use of confidential information.

Legislation and Common Law

Depending on the type of IP being sold, bought or licensed the following laws may apply:

• Copyright Act 1968 (Cth)
• Trade Mark Act 1995 (Cth)
• Designs Act 2003 (Cth)
• Patents Act 1990 (Cth)
• Plant Breeder's Rights Act 1994 (Cth)
• Circuit Layouts Rights 1989 (Cth)
• Confidential information

Drafting Tips

As a first step, to sketch out the matrix for a proposed deal or contract it is useful to ask these three questions:

1. Who are the stakeholders (ie relevant entities)?

2. What are the assets and interests related to the product and the stakeholders?

3. What are each of the stakeholder's present and future roles and associated rights?

As a second step, assess and specify the parameters regarding the following subjects:

• parties to the transaction(s);
• duration of the grant, eg term of copyright or 10 years;
• territory of the grant, eg Sydney Metropolitan Area, Australia, EU;
• type of right, eg licence or assignment;
• degree of exclusivity, eg exclusive, non-exclusive, exclusive for some things or territories but not others, exclusive for say seven years or exclusive for two years but extending to the term of copyright if the rights are sublicensed;
• languages of the grant, eg English, French, Java, HTML;
• licensed subject matter, eg the work at present titled "Contracting With Finesse";
• versions included, eg all editions, adaptations for special purposes, electronic, abridged;
• formats included, eg volume rights, hardback, paperback, DVD, audio CD; and
• media included, eg print, electronic, free to air broadcasting.

The last bullet point is particulary important given the proliferation of digital media and the subsequent uncertainty that can arise regarding the grant of such rights. This topic is something we have written about previously.

Sample Clause

1.1            (Rights Granted)  The Owner grants to the Licensee a sole and exclusive copyright licence in all languages, countries and territories to produce, distribute and use the Work during the term of copyright in the Work in all mobile phone devices.

1.2            (Rights Reserved)  The Owner reserves all other rights, title and interest in the Work. In particular, as regards each part of the Work, the Licensee may not sublicense it, or adapt it to produce a derivative work.

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Further reading:

Contract Drafting Tips Series: Service Level Agreement Clause

Contract Drafting Tips Series: Confidential Information Clause

Contract Drafting Tips Series: Dispute Resolution Clause

Contract Drafting Tips Series: Rights Granted Clause

Contract Drafting Tips Series: Restraint of Trade Clause