Understanding The Importance Of Derivative Works

Originally published in E-Commerce Law & Strategy, March 2009

The right to create derivative works is one of the exclusive rights of a copyright holder.

This adaptation right is often referred to as the most powerful of all the exclusive rights in copyright, because the right to adapt and to modify permits the grantee the right to improve a copyrighted work, and creates new copyrights that vest in the developer of the derivative work, subject to the rights in the preexisting work.

This article attempts to provide a practical understanding of derivative works and their importance in structuring business — including e-commerce — transactions involving the right to create derivative works. It also discusses several strategic considerations relating to derivative works.