In the process of exploiting copyright, a work licensing agreement is an important legal basis for the user to legally exploit the value of the work. However, when one party violates obligations, uses the work outside the agreed scope, or infringes on the author’s rights, terminating the agreement may become a necessary solution to protect legitimate rights and interests. So, when can a work licensing agreement be terminated, and what should be noted to ensure compliance with legal regulations?
What is work licensing agreement termination?
Work licensing agreement termination is the termination of the validity of a legally concluded contract between the author (or copyright owner) and the work user, when the user commits a serious breach of obligations that prevents the purpose of the contract from being achieved.
Essentially, this is a penalty for breach of contract applied according to the provisions of the 2015 Civil Code or by agreement of the parties, aimed at protecting the legitimate rights and interests of the author and copyright owner.
According to Article 423 of the 2015 Civil Code: “One party has the right to cancel the contract and is not required to compensate for damages when the other party seriously violates its obligations in the contract.”
When a contract for the use of a work is canceled, the contract becomes invalid from the time of conclusion. The parties must return to each other what they have received, and the party at fault must compensate for damages (if any). At the same time, the user must immediately cease exploiting the work to avoid further copyright infringement. In the field of copyright, a contract for the use of a work is an agreement allowing the user to exploit one or more property rights to the work (copying, distribution, transmission, performance, adaptation, etc.) within a specific scope, timeframe, and purpose. Therefore, when a violation occurs that distorts the nature of the agreement, the author or copyright owner can terminate the contract to prevent continued unauthorized exploitation.
In what cases can a work licensing agreement be canceled?
The termination of a work use contract cannot be done arbitrarily but must be based on clear legal grounds and the severity of the violation. Below are common cases in practice:
Case 1: The user of the work violates the obligation to pay royalties and fees.
Paying royalties, fees, and copyright is a core obligation of the user. If the user commits the following acts, these are considered serious violations, undermining the purpose of the contract with the author.
- Failure to pay as agreed
- Repeatedly late payments
- Deliberately evading obligations
Case 2: Using the work outside the agreed scope and purpose
Contracts for the use of works usually clearly stipulate:
- Scope of use (printing, publishing, communication, etc.)
- Duration of use
- Territory of use
- Purpose of use
If the user commits the following acts, this constitutes a serious violation of the author’s property rights:
- Arbitrarily expanding the scope of exploitation
- Using for commercial purposes without permission
- Transferring the right to use to a third party contrary to agreement
According to Article 28 of the Intellectual Property Law, the act of using a work without the permission of the copyright owner is an infringement of copyright.
Case 3: Infringement of the Author’s Moral Rights
The author’s moral rights are protected indefinitely under Article 19 of the Intellectual Property Law, including:
- The right to name the work
- The right to use one’s real name or pseudonym
- The right to protect the integrity of the work
If the user engages in the following actions, the author has the full right to terminate the contract to protect their moral rights.
- Unauthorized modification or alteration of content
- Failure to credit the author
- Distortion of the work’s content, affecting the author’s honor and reputation
Case 4: Failure to perform or improper performance of contractual obligations
Some other obligations, while not directly related to money, significantly affect the exploitative value of the work, such as:
Examples:
- Failure to release the work as planned
- Failure to fulfill promotional obligations as committed
- Failure to maintain confidentiality of the work’s content
These violations can diminish the commercial value and meaning of the permission to use the work, providing sufficient grounds for contract termination.
Case 5: Force majeure making the contract unenforceable
According to Article 156 of the 2015 Civil Code, force majeure is an objective event that is unforeseeable and unavoidable.
If this event makes it impossible to continue exploiting the work (e.g., a publishing ban, a natural disaster disrupting operations, etc.), the parties may agree to terminate the contract.
Important notes before deciding to cancel a work licensing agreement
Terminating a contract has many legal consequences, so the author or owner should carefully consider the following:
- There must be clear grounds for breach: Cancellation cannot be granted simply because of “dissatisfaction.” Proof of breach of obligation, a serious breach, and damage or risk of damage must be demonstrated.
- Notification of contract cancellation is required: According to the Civil Code, the canceling party must notify the other party. Failure to notify and causing damage will result in compensation.
- Legal consequences after cancellation: According to Article 427 of the 2015 Civil Code: The contract is invalid from the time of conclusion; the parties must return to each other what they have received, and the party at fault must compensate for damages. This means the user must immediately cease exploiting the work and may have to pay compensation if damage has been caused.
- Distinction from unilateral termination of contract: Many people confuse the two concepts of contract cancellation and unilateral termination of contract. Contract cancellation means the contract is considered as if it never existed, with the return of what has been received, and applies only in cases of serious breach. Unilateral termination of a contract means the contract ends at the time of termination, without requiring refunds if the work has been completed. This can be applied when there is an agreement to do so.
- A clear written contract cancellation is recommended: The document should clearly state the legal basis, the violation, the cancellation date, the refund request, and compensation (if any). This helps protect your rights in case of disputes.
The above is an article titled “In what cases can a work licensing agreement be canceled?”. Contract cancellation cannot be done arbitrarily but must be based on serious violations and in accordance with the law. Authors and copyright owners need to understand their rights to protect their works in a timely manner, avoid illegal exploitation, and minimize legal risks during the process of cooperating in exploiting their works.
Sincerely,
Yes. 1. If the user fails to pay, repeatedly delays payment, or intentionally evades payment obligations, this is considered a serious breach of contract. The author or copyright owner has the right to terminate the contract in accordance with the law.
No. When a contract is terminated, it becomes invalid from the time of its conclusion, according to Article 427 of the 2015 Civil Code. The user must immediately cease exploiting the work, return what has been received, and compensate for damages (if any).