Contracts are full of magic words, and two of my favorites words are ‘perpetual’ and ‘exclusive.’ In a grant of rights, ‘Perpetual’ speaks to how long that grant lasts. ‘Exclusive’ turns on whether anyone else, including the creator who made the work, can ever use that work again.

Each word does a lot more work than it first appears. When the two get stacked together in the same clause (which happens by default far more often than it should), the results go well beyond what either word would manage alone. Here’s how to think about the benefits and potential consequences of each.

Magic Words Aren’t Free

‘Perpetual’ and ‘exclusive’ both sound great from a studio’s side of the table. Sometimes that combination is exactly right: for example, a bespoke set of characters and related art is directly tied to the identity of the game, so if a studio isn’t getting a full transfer or assignment of rights, perpetual use and exclusivity are necessary and worth paying for.

Even non-identifying content often requires a perpetual license. Games get re-released, ported, added to subscription catalogs or kept on sale for far longer than anyone expects at signing, and nobody wants to renegotiate a license for a single piece of content after the game has already shipped. Paying for permanence is usually the right call.

Exclusivity is a separate question (and the more expensive one). A rightsholder that hands over every future licensing opportunity for a piece of music or art, exclusively and forever, is giving up considerably more than one granting a non-exclusive perpetual license that still lets the creator reuse or relicense that same work outside the specific game. A studio that only needs to guarantee its own continued use of the content rarely needs to pay for exclusivity on top of the perpetuity.

Studios should consider whether ‘perpetual and exclusive’ together are necessary for any piece of work as well as how far the grant extends. The scope is another, related, topic, but in general it’s both costly and unnecessary to extend the grant to each draft or version of a created piece or every iteration of a piece of audio.

Dangerous, but Not Deadly

As a creator, reading the words ‘perpetual’ and ‘exclusive’ (whether they’re together or separate) might set off warning bells. Sometimes it should. But treating both words as anathema may be counter to a creator’s interests, and neither of the words alone should be treated as a hex from which a creator can’t escape.

A perpetual license to created work can help a creator avoid mid-project scope creep. Perpetuity can also secure long-term royalty payments on a creator’s work. As noted, it’s very likely that the studio will need perpetual use simply because of the nature of the game itself, so if a creator’s license to a studio expires, the studio needs to either renegotiate for extended use or pull the content from distribution channels and never relaunch. That can implicate all sorts of third parties: the end users/players, anyone who recorded or streamed content, merchandisers, advertisers, and so on.

An exclusive license is something creators may want to offer only in limited situations. Design concepts – especially things like background art, sound effects, and underlying game systems – are valuable commodities, and offering to license those to a third party exclusively should come with a high cost. If a studio insists on exclusivity, a good way to handle those requests might be to carve out specific uses that the creator retains. Portfolio use is a common carve-out from exclusivity. A composer creating a score for a game may wish to retain the rights to perform the music or re-record another version. A developer creating an inventory management system may retain the right to reuse that base code for another game but license any IP-bearing content in that code to the studio.

Crafting Perpetuity and Exclusivity for the Deal

There’s no universally correct combination of these two words, so the key things to consider are whether the material being licensed is core to the identity of the game and whether the studio is genuinely willing (and able) to pay a premium for exclusivity. Treating the terms as separate magic spells creating different results helps the parties understand what’s necessary and what’s worth paying for as an added benefit or for peace of mind.

Key questions to ask are:

Does the studio need this piece of content for the entire life of the game, or is it a concept piece? If it’s a concept, maybe the license doesn’t need to be perpetual or exclusive (outside of the term for the pitched concept).

Will the licensed content fundamentally define a player’s understanding of and experience in the game? If not, maybe the license doesn’t need to be exclusive.

Even if some of the content should be both perpetually and exclusively licensed, chances are that some of the other content does not, so studios should consider where that balance of needs actually lies.

Getting this combination wrong at the time parties sign the deal means extra time spent renegotiating and amending once the parties realize they made a mistake, but the good news is that deals can be (and often are) amended for exactly these purposes.

How to Cast Your Spell

Practice safe casting! Get the help of a seasoned practitioner.

Odin Law and Media regularly helps parties on both sides of the table scope rights grants for created works, all the way from initial drafting through any needed renegotiations or reengagements.