The Do's and Don'ts of Art Licensing
Hot Words to Look for in Licensing Agreements - And What to Do About Them
by Lance J. Klass
I seem to be a magnet for toxic licensing and representation agreements. For some reason, artists are always sending me copies of agreements that have been proposed to them by companies that want either to buy or to license their art.
Most often the agreements will come with little notes attached. The artist might want to know if I think the agreement is as strange as they think it is. They may have tried to get through it and found it to be impenetrable gibberish. Or they may have happily read along until they hit something that just didn't sound right. Is it them, they wonder? Are they being unreasonable? Or is it something that might be wrong with the agreement itself, that might be less than standard.
The bottom line is that they've hit something that has set their teeth on edge and they either don't understand it - or are afraid that they do understand it and that there's a good reason not to like it.
The artists who confide in me to this extent aren't really supposed to, because most agreements make it clear that they're confidential between the parties involved. But these are agreements that are just being proposed and haven't yet been signed. And where' s the harm in showing an agreement to someone knowledgeable to ask their advice on it before signing it?
So the agreements mount up in my files. They're from print publishers, artist agents, card companies, tableware companies, and every sort of company you might imagine that has anything to do with art. And some of these agreements are real doozies, believe me.
I've learned over the years that there are key warning signs - key words, you might say - that can pop up when you take the time to puzzle through an agreement, and some of them carry so much importance that I call them "hot words."
When you see these hot words, alarm bells should go off in your head and you should prepare to devote all of your brain power to understanding just how they're used, and what they mean to you and to your control over your art.
Let's look at a few of them:
There ar two things that many companies want to have assigned in a licensing agreement, and they're both bad news.
The first is the copyright itself. Like most artists, you may not realize that your "copyright rights" begin as soon as you put brush to can as or pen to paper. Make a mark on that paper, and it's yours, totally owned by you under your copyright whether you register it with the Copyright Office at the Library of Congress, or not.
In fact, it's yours for your whole life plus at least another 75 years.
As a part of your legal right to own and control the copyright rights to your art, you have the right to control how your art is reproduced or copied. Of course it's a bit silly to explain it that way, but many artists don't realize that that's what "copyright" means - the right to copy. In licensing, we call that area of rights "reproduction rights." In other words, it's the right to reproduce art and the right to control the reproduction of your art.
So when you license your art to a company, you're not licensing the copyright to your art. You're licensing the right to reproduce your art, or the reproduction rights, hopefully for a very specific purpose and under very specific terms.
Here are the only ways that you can lose the original copyright to your work of art:
a) agree in writing that you're creating the work of art as a "work for hire" as part of your employment with a company;
b) your descendants let the clock run out a hundred or so years after you pass away, at which time the copyright enters the public domain aand anyone can reproduce your art;
c) fail to register your copyrights for maximum protection and, if someone else uses the art without your permission, fail to defend your copyrights at that time; or
d) assign (there's the hot word) the copyright to someone else in writing. That's called an assignment of all rights, and the someone else can either be a person or a corporate entity.
So when you see the hot word "assignment", make certain that you're not assigning the copyright or all reproduction rights to your artwork as a part of the agreement. If you do, it's lost to you forever. Other people will control the reproduction rights to your art, and you'll actually have to ask their permission to reproduce the art that you created. Crazy, isn't it? But it happens all the time.
Just the other day an artist sent me an agreement from a licensing agency that asked the artist to assign the copyrights to all of her artwork to the licensing agency. Can you believe that? She was being asked to give up her copyrights, just on the chance that they might be able to find some licenses for her work. This might be laughable, if it weren't so tragic - and if the agency didn't have so many artists who apparently have already signed this same agreement.
The simple solution here is never ever ever assign the copyright rights to any of your art to anyone, for any reason, period.
The other type of assignment to watch out for is the assignment of the agreement itself. This type of assignment generally comes toward the end of a contract after a whole bunch of legal terms have floated by.
You may find a paragraph that says something like "The rights and obligations of Publisher pursuant to this Agreement are freely assignable and transferable by Publisher, without consent of Artist." Or words to that effect.
By the way, I didn't make up that sentence - I took it directly from a publisher's agreement that is a true horror.
So this is the second type of assignment you have to watch out for - the assignment of the publisher's, company's or licensee's rights under the agreement. Why watch out for it? Because this very nice company you're signing on with might go bankrupt and assign its rights to your art to some other company that isn't quite so nice. The company you've licensed your art to can be purchased by a predatory company that might not treat you well. And you might find that you're dealing with some very nasty or predatory people who could care less about your rights, particularly when they get in the way of their profits.
Imagine being married to someone you really get along with, and then one day finding that you're married to someone else whom you don't get along with at all - and having had no say whatsoever in the transition. That happens all too often in the wonderful world of art licensing.
The solution here is to not allow the other party to have the right to assign their rights or position in the agreement or relationship with you to anyone else without your prior written approval. Period.
What are some of the other hot words to look out for in an agreement? You've probably guessed some of them by now:
"WORK FOR HIRE"
This means that you are being paid to create something for a company who is acting as your employer and you as their employee. That means that when the work is finished, it doesn't belong to you - it belongs to your "employer" - and with the original piece of art have gone your copyright rights, your reproduction rights and very often the use of your name (your "publicity rights") as well.
It's OK to do works for hire. Illustrators do them all the time for magazine covers, advertisements, book covers and interior illustrations, and other such uses. But know what you're getting into before you take this route as your artistic creations won't belong to you.
Norman Rockwell spent most of his career doing works for hire and made a good living at it. But today the great majority of his works are owned, and used, by companies and people other than his children and grandchildren. Something to think about.
An obvious hot word for all the reasons above. This is the jewel that predatory companies are after. If they own the copyright to your art, then forever after every single use of the art is completely free - because they, not you, own the art.
I'm always extra cautious whenever I see the word "copyright" in an agreement. It's a warning that I have to read that sentence or paragraph extremely closely to make sure there's no implicit or explicit transfer of copyright.
The only time it should be used in an agreement is in a sentence which states that every product that is produced using your art must carry your copyright notice in the following format: "(c) your art. All rights reserved."
In my experience every other use of the word is suspect.
Are there other "hot words" to look for? Yes, there are. Words like "indemnification", "automatically", "renewal", "conflicts", and others as well, but these above are a good start.
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