The Do's and Don'ts of Art Licensing

How To Avoid the Most Common Mistakes
Artists Make When Licensing their Art

by Lance J. Klass
President, Porterfield's Fine Art Licensing

    You know, it's isn't easy being an artist and having to somehow be a lawyer, artist's agent, bill collector and bookkeeper all at the same time.

    That's not why you went to art school, not why you picked up watercolors or pen and ink when you were six and started fooling around with line and color, and not why you decided to spend every free minute creating beautiful images with brush and canvas.

    But your art is good, or at least you feel it is and your friends tell you it is. You want to get it "out there" so that it can appear on greeting cards or calendar or fabrics or a host of products that can bring you income, make you known, and start you on a career that allows you to do what you really want to do with your life -- and make money at the same time.

    The only problem is that whenever you "connect" with a company that's interested in using your art for their products, they'll want you to read and sign a legal agreement that gives them the right to use your art - and perhaps even a bit more that you're not prepared for.

    I've been in art licensing for so long that I've heard a ton of "horror stories" from artists who've made mistakes that would have been completely avoidable if they had understood a few basic terms or if they had known how to read a licensing agreement. There are many holes that an artist can step into on the way to commercial success. Here are a few from recent experiences I've had with artists who found themselves in difficult situations.

LOSING RIGHTS TO YOUR OWN ART

    Just recently I received a call from an artist who creates images for a famous greeting card company, and who was seeking representation for her work as she wanted to get it into more places than just greeting cards. But the problem was, she didn't really have any artwork to license. It had all been sold to the greeting card company, who had paid her a fee for each piece and now owned it totally.

    That's what we call a "buyout". This term is often used to mean that a company pays a flat fee for a single use of a piece of art. That's well and good if you're happy with a few hundred dollars for a single-use fee. Where you can get into trouble with a buyout is when the company has you sign an agreement which gives them all reproduction rights, now and in the future, to the piece of art. That means that they - not you - own the art. Since they own your art (excuse me, their art), they can use it for anything they want, resell it to another company, or license it to other companies for other uses for the next hundred years and you legally have absolutely no say in the matter. And of course you'll never make another cent from its use.

    That's what companies generally means when they say that they "buy all rights." Now, that's fine if you don't really care what happens with your art and you're happy with a flat fee payment. Buyouts work well for illustrators who do book and magazine covers or interiors, or advertising images, and who know full well that they'll never be able to use the art again. They generally know what they're getting into.

    The problem comes about when an artist doesn't know what he or she is getting into, and the artist who called me the other day had been successful in her own way - with one company - but essentially had no real portfolio of art that was available for licensing anywhere else.

    This artist's mistake was in agreeing to a buyout when she wasn't prepared to assume the consequences of selling all rights to her art. A major mistake, and she now regrets that she didn't understand that the card company might have been willing just to license the exclusive right to use the images on cards, leaving them free for other uses. But it's too late now.

SELLING THE STORE TO MAKE A SALE

    Another artist told me he was thrilled when a major print publisher wanted to sign him up for prints. He had received verbal assurances on the phone from the publisher that they would print a lot of his art, promote the work broadly and even commission new works that might be published. He showed the agreement to his lawyer, who reviewed it and told him to go ahead.

    That was a year ago. When he contacted me last month about representing him for licensing, it was after the print company had done a lackluster job with his art, publishing only a few prints, having him doing several sets of images which wound up in a drawer somewhere in the publisher's office, and giving him monthly royalty checks as low as $20. He was depressed and had decided to license his art elsewhere.

    You can imagine his shock when I explained to him that according to his agreement, that wasn't possible. And there were more facets to the agreement, right there in black and white that he had apparently never read - or at least never understood.

    First, the agreement wasn't even between him and the publisher, it was between him and a licensing agency. This agency, which just happened to be owned and operated by the same people who owned and operated the publishing company, gave itself the exclusive right to publish any or all of the artist's work for the next five years and to sublicense his art to anyone they wished, whenever they wished. He was shocked when I read him sections of the agreement that his lawyer had read and that he had signed.
 
   I carefully explained to him that there was no way I could represent him or his art, as he was totally locked up by the other licensing agency. "But they didn't tell me that!" he said frantically. Nonetheless, that's exactly what it said in the written agreement that he had signed.

ALL-TOO-COMMON MISTAKES

    What had he done wrong?

    First, he had relied on the friendliness of the people he spoke with at the publishing company and their verbal promises. Reassured by their support, he didn't feel that he really needed to plow through all those pages of legalisms. A big mistake.

    Secondly, he showed it to an attorney who simply didn't know what to look for in an art licensing agreement. After all, when they're in law school, attorneys learn about contracts and contract law, but without specific application to the fields of art and licensing. So when his attorney reviewed the contract, he wasn't able to recognize how certain key provisions of the agreement affected his client's future ability to market his art.

    Thirdly, the artist himself made the major mistake of not reading every line in the agreement himself and making sure he understood it.

    If there's any one piece of advice I could give an artist about to enter a legal agreement, it is to read every single line in the contract and make sure that you totally understand it. I know that isn't easy for most people, but don't get in the water if you don't want to get wet. If you find that there are sections or sentences that aren't written clearly, don't say what you want, take away a bit more of your rights than you feel you want to give, or if any of it seems confusing or contradictory, have the company rewrite it in plain English.

    Fortunately, the artist was very lucky - lucky that he had contacted someone who understood licensing agreements, lucky that I forced him to read every line of the agreement he had signed, and lucky that I coached him on how to deal nicely with the publisher to get released from the more onerous provisions of the agreement.

    He went back to the publisher, explained his situation, pointed out that his prints weren't selling that well anyway, and explained what he wanted to do. Luckily for him, the publisher was human and understanding enough to do the right thing - he released him from many of the major terms of the agreement. And did so in writing.

SOME MAJOR WARNING SIGNS

    These are just a few examples of the many types of potholes one can fall into on the quest for commercial artistic success. So if a company comes to you and wants to:

    - gain the copyright for any of your pieces of art;

    - gain full and complete reproduction rights to any of your art;

    - gain the right to sublicense your art to other companies without your having to approve and sign each specific sublicensing agreement;

    - gain full ownership of your original works of art as part of the licensing agreement,

    then you may just want to think twice about what you're getting into.

    But don't let this stop you from promoting your art for license. Most companies are quite reputable and many contracts are completely understandable by the average human. Just make sure you read every word, and know what it means.
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Lance J. Klass is President of Porterfield's Fine Art Licensing, with many years of experience in the licensing field and expertise in promoting the works of artists seeking to increase their income and establish their names in the world of commercial, licensed art.  
If you're interested in having Porterfield's review your portfolio, please email us first.

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