Copyright, licensing for design and illustration
Copyright and licensing of original design and illustration work is complex. There's no one size that fits all when it comes to pricing. What works for one creative may not work for another. Illegal use of images leads to distrust but when an agreement is done well then the rewards are great. The client receives something original and the creative is paid fairly; both can take pride in the outcome. This is a brief run down of common terms and licence maths. Yes, maths!
This article is by no means a legal guide but come from my experiences as a designer and illustrator. I am exploring platforms on which to licence my design, painting and print work and reviewed the latest guidance. I hope the results of this are helpful.
What is copyright?
Copyright can be summarised as the the right of the person who owns the reproduction rights to the work. Basically the creator! Copyright automatically belongs to the creator unless it is transferred and stated in writing.
What is a licence?
It’s the agreement that allows a client to use the work of a designer or illustrator for commercial purposes without paying for a copyright transfer. A licence may be part of the commission fee or it’s an additional charge.
Can I charge a client for a rate or a day charge?
There might be a reason to work for a day rate; such as my VIP days but it’s rare to honest. Day rates are much easier for a designer to deal with. The issue with a licence is when the work is bespoke for commercial use that has a higher value than the price paid because it could be used ten or twenty times over on marketing material as well as the original piece. So a day rate might be less then the long term worth.
Does the client own the rights to a design or illustration if they commission it?
No, it’s not often that’s the case but some traditional publishers may do so in their contracts; they tend to have the buying power!
Most clients may not need that level of ownership. Do think about if it’s required before going down this route. Owning the work outright means a client can edit however the want to with any piece sold - are you okay with this? They can also use it on all worldwide promotions. The creator also loses the right to add their name to the piece, use it in their portfolio or promote it. If there isno need for it, then it’s best avoided. Read about Carolyn Davidson who created the Nike swoosh.
Be clear on what is needed. If a client asks me to commission an illustration or create a design, and they may need to place it on more than the material briefed (such as a book cover character or title design appearing on a t-shirt); I would ask for more details.
With graphic design it’s more straightforward. The license is a means of agreeing on the commercial use, which is part of the brief. It’s hard to use a website or a brochure without it being still a website or a brochure! Some designers may apply a fee for supplying their source files. My fees include this. It covers my work being handed to another designer and existing outside of my control.
Can I backdate my agreements on past work?
If I created a print to hang on a wall, then my client and I have agreed to that fee. If they began a business and used the cover in the branding, then they would have to seek permission as it’s no longer personal; it’s commercial and has a higher value.
What factors can determine the price of a licence?
The size of the buyer.
Most large companies have art directors who know their stuff; you can get impartial advice from Anti Copying in Design (ACID) and the Association of Illustrators.
If it’s a small business who want to pop something onto a label; the market is less and therefore, the fee is less.
Where will the design or illustration be used?
Will be on a poster? Mugs, t-shirts (how many?) or the side of a bus? Promotional (as in not for sale) or not for profit?
In the case of design or illustration being used for merchandise, then royalties come into play if it’s unclear how wide the use ultimately is (you should, as a creative, request a clear marketing plan before agreeing to anything). A royalty payment is where the originator is paid a percentage of a fee - around 5-8% of the retail cost, plus a fee for the creation.
A flat fee could be agreed for a limited run. Without design or illustration, the product or service may not sell; the creative art is critical to sell it; therefore it should have a fee. Remember that exposure doesn’t pay the bills for anyone!
Creators need to be aware that companies change hands. Here’s an example. A designer or illustrator has completed a logo for a small salon for a flat fee. Two years, they are bought by an investor, and they open up five more salons across the country, the creator has no right to charge more if it was sold under licence. In this case, a regional use clause would be appropriate. If the salon then applied the branding to mugs and bags when the agreement was price lists and signage, the terms again need to be agreed again (I’m going off this salon, are you?!)
How long?
If the illustration will be in use for decades, that’s a higher fee. It’s helpful to get an handle on the client strategy for marketing at this stage (at all times really). Logos or branding tend to be priced higher as they will be used longer than a brochure or a short life product.
It can be very lucrative for long-term use. Companies and supplies change in direction too. Familiarity is good for sales; a character with a brand can increase loyalty. Beware though, that the illustrator or designer may change styles. The company may change hands (maybe that new salon owner has associations with unethical hire or rights). This is an important factor when agreeing on a long-term contract; one that renews with the opportunity to review could be more beneficial.
Exclusivity
During the terms of the licence, the creator can include an exclusivity clause which means that they cannot use the artwork for any other client. When the term comes to an end and the licence isn’t renewed, they can use the piece wherever they wish. Exclusivity is where a client has the sole right to use; the fee needs to reflect that the creator has given away part of their income.
Non-exclusive means that the creator can use the design elsewhere. It can be based on the client competition. My bespoke book design work may feature a pattern that I won’t use on another book, but I could drop into the background of a website for a therapist who has no interest in publishing a book. The two audiences are different.
Is there a form?
It’s usually called a Statement of Work and states the agreement. It should be checked by a legal eye; don’t copy from another designer or illustrator as their terms might not be the same. They could be from another country with different rules. The AOI can help with this.
How do designer or illustrators licence their work?
There could be set periods of time: 12-18 months for a start-up that wishes to launch a product, for example. Two years for seasonal material allows a company the time to commission their design, print it, and sell it and ensure that no competitor can buy it for their campaign the following year. A 5-year agreement would be helpful for a design that’s key to a brand or campaign. Forever, or perpetuity as stated already, removes all rights.
How can it be costed?
All of the costs depend on the above factors.
Artwork creation fee plus the value = price, which is the creation based on your regular rates (hourly or flat fee) with the licence value, and that’s the fee that allows your client to make their own profit.
For example, a limited licence could be 50% of the fee for a 12-month use on a short run of regional use promotional material. The middle of the park is a more extended use for a larger audience, and that might be 100-200% of the creation fee. Complete exclusivity is often 200-300% of the artwork creation fee.
Takeaway
You don’t need an agent to do this, but it’s good to have an experienced legal person look at the finer points for you and help create the forms required that form a paper trail. Make sure you understand exactly what is being asked and don’t be swayed by a huge fee. Ask for time to consider it and check the details carefully.