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An artist licensing agreement allows an artist while retaining full copyright ownership of their work, to grant permission to another party to use their art.
The client or company which accepts the license does not obtain any ownership rights; they are simply being granted permission to utilize the artwork within specific parameters. Designers, graphic designers, and artists all license their work to a wide variety of companies willing to pay for the artwork. These licensees utilize the artwork in numerous ways in efforts of increasing the saleability of their products.
There are several aspects of a licensing agreement that the artist as licensor, and licensee, must agree on:
Digital images or graphics are delivered to the licensee. The specifications are determined beforehand, including the number of images to be delivered; the format (e.g., JPEG, TIFF, PNG or PDF); the pixelation (e.g., 300 dpi); and/or the size (e.g., 8×10).
Many agreements will ask for a license duration of 12 to 24 months with the option to renew.
The relationship between the parties puts the artist in the position of an independent contractor vis-à-vis the licensee, not an employee. Also, neither a partnership nor a joint venture is created by these licensing agreements. Payment can be per image, per month of supplied material, or based upon the degree to which delivered artwork is actually utilized.
The artwork’s sanctioned use is also defined in the licensing agreement. These are limited parameters. Artists should make sure to avoid unexpectedly turning their art over to a licensee with overly wide permissions to use it for anything and everything. The parameters must be defined using language, for example, such as The Deliverables shall be only and specifically for use as decor for the Company’s _________. Regardless, generally speaking, the broader the permission, the greater the compensation.
A licensing agreement must govern the parameters of cancellation. Occasionally, it will become necessary for a licensee to cancel the agreement, and without proper drafting, the artist may be left hanging, after putting in extensive time and labor. Boundaries and timeframes must be created in which the licensee is permitted to cancel the agreement, refuse a design, or even request that a design is edited or altered, but with reason and equity in mind.
Exclusive or Nonexclusive
Another crucial part of any licensing agreement is whether or not the license is exclusive or non-exclusive, and how that is defined. Most of the time, because the artist is an independent contractor, neither party wants to create an exclusive relationship between them. Both the licensee and the artist desire the flexibility to engage others for services that are similar in nature but, whether or not the artwork that falls under the license is being granted exclusively to the licensee, is an entirely different, and very important, matter.
Transfer & Assignment
A licensing agreement should also address issues concerning transfer and assignment. There are numerous advantages, and potential disadvantages, for both parties, that are brought to bear here.
The licensing agreement should also protect the artist against any 3rd-party claims against the licensor. For example, if an artist delivers an image to the licensee that is it utilized recklessly or in an offensive or disparaging manner, the artist should be contractually released from any liability. The agreement should ensure that, in the multitude of variations in which the art can be used, a lawsuit can never come back on the client.
When the agreement expires or is otherwise terminated, use of the artist’s work should wind down and end as well. The licensee is free to look elsewhere for another designer, to take advantage of an offered option or, if they love the artist, to continue the relationship.
In order to avoid the many pitfalls possible in the licensing and acquisition of artwork, working artists and designers should hire an attorney versed in the law of entertainment and design. For more information, contact our offices.