Page 195 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 6 UGC Platforms’ Entitlement to UGCs
An Intermediary-oriented Approach

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breach of the licence. In the widely cited decision of BMS v. AB Agri, the UK High Court
concluded that a perpetual licence is of ‘indefinite duration’ as opposed to a licence with an
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‘unlimited period’, and thus it could be terminated. It appears that some UGC platforms
have adopted the ‘indefinite duration’ interpretation to allow users to terminate perpetual
licences. As for the irrevocable licence, some courts have found that an irrevocable licence
cannot be unilaterally terminated even if the other party has committed a material breach of
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it. This has mainly been based on the doctrine of equitable estoppel. Other courts have
supported the licensor’s termination of an irrevocable contract based on evidence of the
licensee’s failure to observe the conditions of the agreement. 175
Due to the uncertainty of judicial interpretations of perpetual and irrevocable contracts,
and the inability of many UGC creators to understand legal jargon, UGC platforms should
incorporate a termination clause into ToUs/ToSs. Through this termination clause, UGC
creators could reserve the right to terminate their licence, either by closing their account,
deleting all their content from the website or other means provided by the UGC platform.
This clause is a material provision of ToUs/ToSs, so UGC platforms should give notice of
the clause pursuant to Section 6.3.1. A UGC creator could exercise the right to terminate at
their absolute discretion. For example, if a UGC becomes popular, the UGC creator could
terminate the licence with the UGC platform, drive the UGC out of the royalty-free licence
in the ToU/ToS, and negotiate more favourable terms. Nevertheless, the UGC creator could
not revoke the licence or require the UGC platform to return all the profits it has earned from
the UGC. Revocation usually occurs when a minor’s guardian revokes a licence agreement
the minor signed before the contract went into effective, which is not substantially different
from the revocation rule under contract law.
In addition to introducing a termination clause, I suggest deleting the terms ‘perpetual’
and ‘irrevocable’ in describing the licence of UGC copyright. A permanent and irrevocable
licensing agreement is designed to protect the licensee’s uninterrupted use of the subject
matter. Such agreements are often found when the licence has critical value for the licensee

171 Webster v. Harris Corp. (In re NETtel Corp.), Case No. 00-0177 (Jointly Administered Cases), Adversary Proceeding No.
02-10128, 319 B.R. 2902004 Bankr. LEXIS 2177, (Bankr. D.D.C., Dec. 9,2005) (‘the [perpetual] license was subject to
termination in the event of a default’). The authoritative textbook Modern Licensing Law argues that the terms ‘irrevocable
or perpetual’ means that . . . ‘the license cannot be terminated by the licensor or otherwise ended except for breach by the
licensee’. (Raymond T. Nimmer & Jeff Dodd, Modern Licensing Law § 9:16 (2006)).
172 BMS Computer Solutions Limited v AB Agri Limited [2010] EWHC 464 (Ch), para 41. See also HR Tech., Inc. v. Imura Int’l
U.S.A., Inc., Case No. 08-2220-JWL, at *13-14 (D. Kan. December 1, 2010).
173 Merrill Stevens Dry Dock Co. v. G & J Inv. Corp., No. 86-1714, 506 So. 2d 30 (1987); Change Healthcare Operations, LLC
v WEBMD Health Corp., 651775/2017, Supreme Court of New York, New York County, 2017 N.Y. Misc. LEXIS 51852017
NY Slip Op 32725(U), December 22, 2017, [*15] (citing Dkt. 32 (Pl.'s Opp. Br.) at 12).
174 Curtis v. La Grande Water Co., 20 Ore. 34, 44 (23 P. 808, 810, 25 P. 378, 10 L.R.A. 484); McBroom v. Thompson, 25 Ore.
559, 566 (37 P. 57, 42 Am. St. Rep. 806); Shaw v. Proffitt, 57 Ore. 192, 212 (109 P. 584, 110 P. 1092, Ann. Cas. 1913A, 63);
Kelsey v. Bertram, 63 Ore. 563, 565 (127 P. 777).
175 Heisley v. Eastman, 102 Or. 137, 201 P. 872, 879 (1921).

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