Copyright Infringement vs License Infringement: Key Differences

Have you ever wondered what the terms “copyright infringement” and “license infringement” actually mean?

Are we referring to the same thing?

In fact, the terms copyright infringement and license infringement are often used interchangeably, but they are actually quite different.?

Companies and individuals creating or dealing with original works should have a good understanding of the nuances between “copyright” and “license” infringement to better protect and enforce their rights.?

So, if you create, distribute, or use creative works, software solutions, or other proprietary assets, you should read this.

In this article, I will look at the meaning of copyright infringement and license infringement, their legal and practical implications, and the ways in which they intersect and diverge.

Let’s get started!

Copyright Infringement

The Copyright Act in Canada establishes the concept of “copyright” and outlines the extent of the owner's rights and legal remedies for any infringement.?

Section 3(1) of the Act defines “copyright” in relation to a work as “the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever, to perform the work or any substantial part thereof in public or, if the work is unpublished, to publish the work or any substantial part thereof”.

In essence, the notion of “copyright” is grounded in statute.

To infringe on someone’s copyright, the infringement must violate any of the exclusive rights of the copyright holder, as provided under the law, without the copyright holder’s permission.?

For example, if you copy someone’s copyrighted work without permission, that can be qualified as a copyright infringement under the Copyright Act.

If someone is found to have infringed a copyright holder’s rights under the Copyright Act, then the copyright holder can claim remedies that are offered under the law, such as statutory damages, accounts, delivery up, or seek injunctive relief.

Now, what does “license infringement” mean?

License Infringement?

A “license” refers to the legal permission granted by the owner of a right or property to another person to use that right or property in a certain way.

Typically, a license agreement is used to outline the specific terms and conditions based on which the licensee is authorized to use the owner’s right or property.

For example, the license agreement can include restrictions on the license duration, scope, or location of the license, as well as limitations on the licensee's ability to transfer or sublicense the right to use the asset to others.

A person or company can grant a license on a wide range of things, such as the right to use a patented invention, copyrighted work, trademark, software solution, or other.

In essence, a license agreement is a contractual agreement between the copyright owner and the licensee that specifies the terms under which the work may be used.?

So, what does license infringement mean?

In essence, when a licensee violates the terms of a license agreement, you will have a case of license infringement.?

License infringement can occur in a variety of ways, such as when the licensee exceeds the scope of the license, uses the work in a manner that was prohibited by the license agreement, goes beyond the license term, or fails to pay the agreed-upon fees for use of the work.?

As such, when a licensee is found to violate the terms of a license agreement, legal consequences can include a claim for breach of contract, award of damages, or the termination of the license agreement.?

Now that we have covered the meaning of copyright infringement and license infringement, let’s look at their key differences.

Copyright Infringement vs License Infringement

There are many that may use the terms copyright infringement and license infringement interchangeably.

While both copyright infringement and license infringement involve the unauthorized use of copyrighted works, from a legal perspective, they do not necessarily mean the same thing.

There are important differences between “copyright infringement” and “license infringement” that you should know about.

Let’s look at some of the key differences.

Difference In Legal Basis

Fundamentally, copyright infringement is a violation of any of the exclusive rights granted to the copyright owner under the Copyright Act.?

As such, the legal basis of copyright infringement is statutory.

In the case Harmony Consulting Ltd. v. G.A. Foss Transport Ltd., 2011 F.C. 340,? the court stated that “it is necessary to find a basis in the Copyright Act for subsistence of copyright in a work, for ownership, and for infringement.”

On the other hand, license infringement is a breach of the license agreement.?

For license infringement to take place, you must have a license agreement between the copyright owner and the licensee.

Thus, the legal basis for license infringement is a contractual one.

Although a violation of license terms and conditions can qualify as copyright infringement at the same time; however, the violation, in and of itself, does not always result in an infringement of copyright.

Any copyright infringement must be based on the Copyright Act relating to “a work in which copyright subsists, any copy, including any colourable imitation, made, or dealt with in contravention of this Act” (Section 2 Copyright Act).

Difference In Scope

Since “copyright infringement” is based on the Copyright Act, a person may be infringing a copyright holder’s rights even in the absence of a license agreement.

For instance, if a person copies a copyrighted work without permission for commercial purposes, that person may be liable for copyright infringement even without the existence of a license agreement with the copyright owner.

In contrast, license infringement can only take place when there is a license agreement in place between the copyright owner and the licensee.?

For example, a licensee uses a software solution exceeding the number of users authorized under the license agreement.

In that case, if the licensee violates the terms of the license agreement, that person may be liable to the licensor for damages under contract law.?

Difference In Consequences

The legal consequences of “copyright” or “license” infringement can also differ significantly.

In cases of copyright infringement, the consequences can include the copyright holder filing for injunctive relief to put an end to the infringement, seeking damages, accounts, delivery up, and the award of statutory damages.

For example, the Copyright Act provides a copyright holder the right to elect for statutory damages ranging from $500 to $20,000 per work infringed, depending on the circumstances.?

Take note that the statutory damages are only available to the extent the infringement relates to any of the exclusive rights granted to copyright holders under the Copyright Act.

For example, merely exceeding the number of authorized users under a license agreement is not, by itself, an infringement of copyright under the Copyright Act, attracting statutory damages.

On the other hand, in cases of license infringement, the consequences typically involve liability claims under contract law.?

For example, if a licensee violates the terms of the license agreement, it may be liable for damages resulting from the infringement, as well as any other damages specified in the agreement.?

With a license contract in place, the copyright holder can also choose to terminate the license agreement thereby preventing the license from using the copyrighted works in the future.?

Difference In Legal Defenses

There are also important differences in the nature of defenses that a person can raise against claims of copyright or license infringement.?

If a person is sued for copyright infringement, a possible defense under the Canadian Copyright Act is a “fair dealing” use.

Fair dealing allows for the use of copyrighted works without the permission of the copyright holder in certain specific cases, such as research, private study, education, parody, satire, criticism, review, or news reporting.?

On the other hand, in the case of license infringement, a licensee may have a defense of "implied license" if the copyright owner's conduct led the licensee to believe that certain uses were permitted.?

For example, if the copyright owner had previously allowed the licensee to use the work in a particular way without objection, the licensee may raise the “implied license” as a defense against a license infringement.??

Takeaways

As you can see, there are important differences between copyright infringement and license infringement.

In today's digital age, infringement cases are becoming increasingly common and complex, as new technologies and business models emerge and blur the lines between ownership, access, and use of copyrighted material.?

Creators, licensors, and licensees alike should be aware of their rights and obligations under the law so they can better protect their rights but also be mindful of their obligations.?

In this article, my goal was to provide you with a general overview of the key differences between copyright infringement and license infringement so you are better informed.

Every infringement case is different and the factual circumstances are key in determining whether or not a person has infringed copyrights or license terms and conditions.

If you have questions on this topic or are dealing with an infringement matter, you should consult with a qualified attorney.?

Good luck!