Legal Question in Intellectual Property in California

Re: What does it mean granting exclusive rights?

"Exclusive rights" usually refers to the right to use intellectual property ("IP") through a license agreement and the right by the one who purchased the licensed rights to exclude others from using the IP. The nature of exclusive rights is expressed in the license agreement, but the remedies for breaching the agreement need not be (although they can be). Those remedies are governed by general contract law and IP law that you would find in published cases and other sources. There are typically two categories of remedies common in IP (and most other) cases--legal and equitable. A party who was harmed by a breach of contract could sue for money damages (legal) or sue to stop the other party from misusing the IP (equitable). All these remedies, even if never mentioned in the agreement.

Re: What does it mean granting exclusive rights?

You are correct in your interpretation. By granting exclusive rights to someone, you are in essence, promising that they, and only they (and not you) may exercise those rights during the term of the agreement.

How would they enforce it? By suing you for breach of contract and(depending on how the license is written) possibly copyright infringement, seeking an injunction and damages.

Agreements don't usually SPECIFY this kind of thing, because it sets an adversarial tone to the relationship at its very outset.

Re: What does it mean granting exclusive rights?

Exclusive rights means you aren't going to grant the rights to other parties. Usually, it means you aren't going to be competing with the people you're granting exclusive rights to because they are paying you for that exclusivity. Sometimes, it can mean that you and they are the only parties with the right of use. It should be spelled out in the contract if you're intending to use the copyrighted materials for business purposes yourself. You're risking breach of contract. You asked what would happen. They can claim that any money you made was diverted from sales they would have otherwise made and sue you for those damages. There are also sometimes liquidated damages clauses in that type of contract that specify an amount of damages you would be liable for upon breach. If your use is non-competing, the other company may be completely agreeable with clarifying your rights of use. If you intend to retain rights you need to get this clarified in writing. An attorney can review the contract for a nominal fee and tell you exactly what it means (or if its ambiguous) and suggest revisions that accomplish your intentions.

Re: What does it mean granting exclusive rights?

Yes, "exclusive" means that anyone else (including you) is excluded from the right to copy, sell or promote the work. If this is an agency agreement, as to you--the work's owner--it usually means that if you sell the work on your own, they get whatever they would have received if they had sold it themselves. They do have the right to sue for copyright infringement or breach of contract, but would probably first ask you to just pay their share.

Re: What does it mean granting exclusive rights?

Yes you give up your right to the property. The law dictates the remedy which includes the profits plus statutory damages in excess of actual damages. Contact me directly.