On the Envato Marketplaces we don’t sell items, we sell licenses for those items. This is an important distinction and highlights how important those licenses are. They determine what rights authors grant and what buyers purchase.

Since we’ve had some interesting licensing questions come up recently, particularly around extended licenses, we’re rolling out a few changes to the license texts to make them more clear. This is part of an ongoing process to improve our licenses, so there will be more improvements to come. For any and all changes we’ll make sure everything is thoroughly explained for both authors and buyers.

Today’s changes are mostly for the Extended Licenses, so all authors, and particularly those considering whether to opt-in or out, will find this article useful. We think the changes mean good news for authors who previously opted out of extended licenses, as you might now find them more suitable and be able to opt back in to them.  If you’re a buyer, we hope you’ll also be interested in the changes!

So what’s actually changed in the extended license?

Our previous extended license was not clear about when an item could be purchased, modified, and then resold on a stand-alone basis (rather than being incorporated into a larger project). For example, whether a flash photo gallery could be converted into a JavaScript photo gallery, or whether a website theme in one format could be converted to another format and then re-sold.  One reading of the license allowed these examples. This didn’t happen as often on ThemeForest as we have long had a house rule that didn’t allow authors to ‘re-purpose’ someone else’s theme and then sell it as their own.  And we generally find that our ThemeForest authors don’t want to do this anyway.

Some authors in other marketplaces, however, found that they had to opt out of all extended licenses if they didn’t want their items to be modified and re-sold on a stand-alone basis. The extended license now clarifies that this can only happen in a certain way, as I’ll explain below.

What hasn’t changed under the extended license?

The more usual uses of an extended license are either re-using the item in a larger project (which might be a template), or re-selling the end project not as a template but as a final end product. Those more common uses of extended licenses have not been impacted by the changes, but the license wording has been made more clear.

Examples of what could be done under the old license, and still can:

• A button graphic can be incorporated into a website.
• A sound effect can be utilized in a game and that finished game product can be sold to end consumers.
• A magazine template can be used to create a finished magazine that is sold.
• A game starter pack can be used to create the final game sold to consumers.
• An illustration could be used on the cover of a book that is sold.

Here are some more examples of acceptable and unacceptable uses.

If I purchase an extended license of an item, can I include it in a project that I will sell?

The answer is, yes … in 3 cases. These are the 3 categories in which it’s acceptable, and they’re now clarified in the extended license wording:

1. When you include the item in a larger project
   The larger project is usually not a template or stock item. Meaning, what you’re selling is meant for the end user, not something the buyer would modify and use in another project. For example, you could sell a final product like an app, shirt, movie, or printed material. Occasionally, the larger project is a template item. For example, you could use a button graphic in a WordPress theme you sell. (On the other hand, you could not convert an HTML template to WordPress, as this is not a larger project.)  Here are more examples of what is considered a “larger” project.
2. When you modify a template or software app to create an end product
   This means customising a template or software app item, to create and re-sell an end product on a stand alone basis, but not as a stock item. For example, you can use a magazine template to create and sell the final printed magazine to consumers.  More examples here.
   
3. When you modify the item to create a similar item, get permission from the author, and only sell on the Envato marketplaces
   This means not putting the item into a larger project, but modifying it in some way and re-selling it as a template or stock item. For example, using an HTML template and converting it to a WordPress theme to sell on ThemeForest. This is called a ‘Limited Repurposing’ in the updated extended license, and can only happen with the permission of the original author and then only if your item is sold on an Envato marketplace. More examples here.
   If you’re the author of an item and another author asks you for permission to modify or convert it and re-sell it as a stock item, it is entirely up to you whether to agree.  Think about whether you’re planning to sell the proposed modification yourself or if you’re happy for another author to do and re-sell the work. Your incentive would be your share on the extended license fee. If you, as an author, do decide to give permission, you should keep track of what permissions you’ve given out.  Of course, you wouldn’t want to give out overlapping permissions on the same item, which would result in duplicate items being uploaded to the Envato marketplaces.

The following examples are never acceptable:

1. You may not resell the item as is.
2. You may not buy multiple items to sell as a bundle.
3. You may not break out parts of a file and sell them individually (ex: Buy an HTML template and sell the button graphics on GraphicRiver).

Hopefully, these changes will make authors more comfortable about offering extended licenses on their items, because you can automatically allow the more usual uses under an extended license, but control stand-alone re-purposing for re-sale on a marketplace.

Note: This is a 2 part article. See part 2 here.

How do I make sure I’m opted into the extended license?

1. Log in to any of the Envato marketplaces
2. Roll over your username and click Settings
3. Click Item Licenses
4. Make sure Extended License is checked
5. Click Save

Questions?

I’m sure there will be plenty of questions, as well as feedback. That’s why we’ve created this dedicated thread where we can discuss it all in one place.