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Know your rights when licensing your artwork

Angela D'Alton

What you need to know about licensing your artwork

If only someone would pay me to paint all day. Right?

For artists, the closest thing that comes to that is being commissioned to produce artwork.

Whether it’s through the representation of an agency or directly chatting with an art director, that dreamy moment sometimes eventuates in reality.

It can be a really enjoyable collaborative experience to be commercially engaged to create, or unfortunately, it may leave you with a bad taste in your mouth. The results rely on how prepared you are to advocate for yourself and knowing your rights when it comes to the arrangement of what is called a usage licensing agreement.

Without explaining copyright law in too much detail, the overall gist of the way things work in Australia is this: if you produce something that is original, be it an artwork or a pattern or a design, you are automatically granted copyright ownership for that piece of work.

As a result, if someone comes knocking on your door with the desire to use that work in a marketing campaign, advertising on a billboard, packaging of a product or to print on a fabric, you will need to be across how licensing works, what your rights are, and what to expect during the negotiation process.

Many creative people have been caught out with this, and whilst the desired outcome may be wealth and fame, what’s super important is protecting yourself as a creative business owner.

As someone who was responsible for negotiating these usage licenses as an agent for a group of global artists at Illustration X, please allow me to give you a brief overview of what you can expect so that you’re appropriately armed with the information that you need.

What you need to consider for artwork licensing

Usage
Payments
Contracts
Copyright

To learn more, read on.

Know your rights when licensing your artwork

Usage: Commercial Settings

The first thing to find out from someone who contacts you to use your artwork in any kind of commercial setting is the usage. This could be any number of things from product packaging to business branding.

Questions to ask yourself:

Will the artwork be displayed or used on the Internet?

Will you be using the artwork on products for sale?

Will the piece be used in print advertising?

Get a full explanation of the breadth of usage of the artwork. An advertising agency that is keen to use the artwork as a central device in an entire marketing campaign may say “all” to these questions. A small business looking to use the pattern on stickers they pop onto products they’ve sold and are then sent out by mail, would be more specific and granular in their usage.

Usage: Location

The next part of usage to determine is the location the artwork will be visible to or distributed within. For example, that small business owner might only need to worry about locals buying those t-shirts with your design within Australia, whereas the wine label you’re designing may be destined for bottles sold all over Europe and the US.

One of the most important parts of this negotiation to remember is that if at any point the artwork is visible to the Internet or uploaded online, that immediately renders the geographical location to be Global. No arguments as to why.

Usage: Time

The last part of the usage trio is the time frame. How long does the business engaging you to use your artwork intend to apply it as per the usage? If it’s for a social media campaign, perhaps that will only last a few months. If it’s business branding that may be for 5 years. If it’s part of a feature film, that might require a negotiation “in perpetuity”. That means forever, but please remember, that doesn’t mean that they “own the copyright”. You always retain that in Australia as the originator of the artwork as mentioned above.

One concerning trend I’ve identified, especially by younger artists, is the impression that once you’ve achieved elusive representation from an agency, the work will come flooding in. You can kick back and keep creating while someone else does the legwork of negotiation for you.

Unfortunately, it doesn’t always work like that. In fact it’s extremely rare. If you’re able to master the art of negotiating your own contracts and you’ve worked with a solicitor to set up your own template to use in your negotiations, you’re probably in a better position to earn more from. your work directly, than artists who are represented by agencies who take a percentage of the total payment.

Watch this Q&A discussion around how to know how to negotiate artwork licensing and commissions from both sides of the coin.

We also answer the question how to create high-quality reproductions of your artwork, and we touch on the differences between marketplaces and your own website!

Members only. Watch here.

Payment

The reason you need to gather all of this information is that the next thing to discuss, payment, is a calculation of the number of “eyeballs” on the work.

When it comes to payments, licensing is not a golden ticket or magical money unicorn. The amount of money you’ll be paid for the use of your artwork can vary greatly depending on, as aforementioned, the potential number of people that will see your work.

There are also other factors that will influence that final dollar value.

Things to consider when deciding on licensing price:

For example, what is the size of the company that is paying you? Apple or Coca-Cola might attract a higher fee than a new local sole trader.

How experienced are you at providing illustrations? You might have years of working with advertising agencies or you might have just finished studying which might affect the level of professionalism and speed of turnaround.

Are you well-known, in particular, are you famous for your special style? When you have a ‘trademark’ or ‘brand’ of visual identity that you’re being chosen for that is currently in high demand, that might command a higher cost.

Is this product likely to end up in every household or just a few? If this is a boutique brewery requesting a design for a can and their distribution is low, that may suggest a lower fee as opposed to a major multi-national corporation looking to update their branding for global household distribution.

How long is the commissioned work going to take you to create? If it isn’t something you’ve already produced, how close is it to something you’ve created in the past?

How many changes and rounds of feedback will you allow (hint the more they pay the more feedback and changes you will need to be open to)?

One important thing to mention and to remember is that whilst these are influencing factors in the payment, it will often purely boil down to available spend by the client, and whether you’re willing to accept that amount as payment for the license and completion of the work itself. There’s no formula, unfortunately, only guidelines.

In my experience, the payment of royalties for usage is not a common practice in Australia when it comes to licensing artwork. These types of arrangements are usually initiated from the client’s side when they have a legal team and calculation system that you’ll have to trust. If you decide that’s a route you’d like to explore, I suggest you get in touch with a copyright or IP lawyer, and find out more, especially if you’re being asked to sign something you don’t fully understand yourself.

Contracts

Now that I’ve mentioned a lawyer, if you are keen to pursue a means to manage your own licensing, I strongly suggest you have a template drawn up by a professional that you can update based on the variables for each of the licenses you issue for your work. We recommend Legal123 to start.

Engaging a lawyer, explaining what you’d like the contract to include, and then being able to update it for each of the clients you manage for yourself, once you’ve negotiated your terms, means you retain a much higher percentage of the fee than if an agency had done this on your behalf.

Having said that, the point of agencies is that they are professional negotiators who know what people usually get paid for commissions, based on those other influencing factors. Industry knowledge goes a very long way and may mean you are paid even more than you could imagine when an agency has arranged the work on your behalf. Representation can pay, but it’s worth keeping in mind that the world of big jobs with large payments is the exception, not the rule.

Copyright

One thing that is super important to remember, as the owner of copyright, is who defends that copyright for you. Are you going to engage in legal representation if you identify a breach of copyright? What happens if that breach of copyright is found by someone who has engaged you for paid work?

What I mean here is, let’s say you have had artwork licensed by a large cosmetic company for their new range of lipstick packaging.

In the event that another business copies or replicates the packaging which includes that piece of work you completed for the commission, it’s important to establish who is responsible for any commencing legal action as a result of that breach.

Engaging a lawyer once again to make sure that information is clearly stipulated within your contract template is the best way to ensure you have peace of mind and protection of your artwork.

Another reason why many artists find that representation is easier. That side of the legal business is taken care of by the agency themselves.

So while it’s always an absolutely awesome and highly flattering moment to be contacted by that massive business that makes wrapping paper that wants to feature your work, I implore you to take a moment to consider your rights in the equation.