artOf_Licensing_Agreements

Art Of: Licensing Agreements

Probably one of the biggest mistakes I made early on was not implementing licensing agreements into my professional work. It’s natural to feel a bit squeamish when having to hash out the details of payments, kill fees, and usage rights but it must be done or else you’ll wind up getting walked all over by clients like the scope creeper.

But where to start? 

I learned the majority of the typical clauses in Licensing Agreements from a class in college called “Art and Law”. If you’re not fortunate enough to have a similar class in your curriculum, I highly suggest purchasing Graphic Artists Guild book of Pricing and Ethical Guidelines. I’ve preached about this book a lot, and it truly is a bible of sorts for creative professionals. It contains everything on pricing for your services to contract templates that you can easily take and incorporate into your own contracts. Here are some common areas to address in your agreements:

 

*note: I am NOT an art lawyer, nor can I give you counsel or instructions on how to write your licensing agreements. I only wish to provide insight on the types of clauses that creative professionals should know about.

 Listing both parties in the agreement:

licensee – client/ person who is receiving the services and license
licensor – you, the creator who holds all the rights
*make sure you list out full names and companies included

The scope of the project

All the assets that are to be created
Number of rounds in included (if you’re going by a flat rate)

 Who gets the copyrights? Is it exclusive or non-exclusive:

A really important nugget of information is the “bundle of rights”This term refers to the fact that the artist of any work has all copyrights to their work and must “give away” these rights to the client that hired them for the work. These rights are individual and can be given out separately or in a “bundle”. I strongly urge you to read more about it here (scroll down to “exclusive Rights”)

Here are the one’s you should know:

copyright is a bundle of rights. Those rights are the exclusive right to:

 Reproduce the work – If it’s a logo, this only makes sense that they can reproduce it as many times as they need, but if you’re a photographer, maybe you sold them a certain amount of printed photos (remember like in school when you paid for the amount of wallets and 8X10’s you wanted?). You can keep this right so that they are not allowed to reproduce the photo as many times as they like without paying you.
Sell and distribute the work – If you created an illustration for a T-shirt design, it’s obvious that your client will need this right, but again, if you’re a photographer or a traditional artist, would you want someone else selling and distributing your work?
Adapt and prepare derivative works – This one is tricky. Creating derivatives …. is like creating an altered copy. Where this might come into play is on logos. Say the company down the line decided they wanted to change the color, or add a tagline. If you restrict this right, they must go through you to do so.
Perform the work publicly this has a narrower application, but it’s still good to know about
Display the work publicly Again, pretty self-explanatory. This happens a lot with movies. If you ever read that green screen before a film, it says that you have to purchase the rights to display the work publicly, or else no one would buy their own copy of the movie right?

Duration is a key factor as well. With logos, it is assumed that the duration is forever (or as long as they want), because its vital to their identity. Other things like illustrations for publications might have a limited run, and therefore the price may be affected.

*make sure you discuss with them keeping the right to promote the piece on your portfolio, both digital and print and discuss the appropriate time when you will be allowed to do so. If it’s a trade mark, they may need time to register the mark so that no one can steal it.

Payment

Describe whether the client is paying a flat rate and how much, or an hourly rate.
How you are to be compensated for any extra rounds of edits (if you choose a flat rate method)
The method of payment: check, money order, paypal etc.
The payment schedule: (50% upfront, 50% at the end?, all upfront?). Make sure you define this before throwing it in to a contract and hoping they agree.

Kill Fees

What happens if you send off all your sketches and then they decide to kill the project. Well, most clients assume that they don’t have to pay you. Kill fees protect you from this happening and say that if they kill a project after a certain point (that you must define and agree on), they have to pay you a % of your fee. If you’re hourly, they simply must pay you for your time.

Late payment

The standard payment window is 30 days after they receive the invoice. If they fail to pay you by that time, all the rights you granted to them revert back to you.

Limited Liability

In this clause you are stating that the work you are designing for them is to the best of your knowledge, original and not infringing on anyone else’s copyrights. It also says that they can not hold you accountable if they do get sued for infringement.

Jurisdiction and Acceptance of Terms

These two just say that the laws will be held in whatever state you’re working out of and that by signing the agreement, both parties are liable if they break the contract.

These are some of the simplest clauses to put into place as a freelancer. Of course there are more that clients can impose on you like “non compete” clauses or Non – Disclosure Agreements. All of which have their places.

The key is to have a discussion with your client about how many rights they think they should have and for how long. Most will say, “well.. all of them surely”. The truth is that they really don’t NEED all the rights for every project, nor should they get them.

What ever you do, do NOT sell all your rights away unless it’s for a very big amount of money. Here’s another article by one of my favorite designers on payments and contracts: The Dark Art of Pricing

 

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