Copyright 101: Understanding Copyright Law and How to License Your Artwork As a Designer

Copyright/Licensing Info:

U.S. Constitution, Article 1, Section 8 empowers Congress to “promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” -the basis of copyright laws of today

In today’s visual world, the work created by a graphic designer are among the most powerful vehicles for communicating ideas in our society and generating revenue for a particular client. A successful logo, ad campaign, commercial or overall branding of a company, can evoke a company’s goodwill in the public mind and move an entire population to action.

© Copyright: an artist’s right to control the use of their original creative art (which also provides the basis for pricing, licensing and fair trade practices)

1978 – Copyright Act became effective

1989 – U.S. copyright law automatically protects original artwork from the moment of its creation even without inscribing a copyright notice which always allows the artist to assert a claim for copyright infringement even if he or she has not previously registered the work in question.

1998 – The Digital Millennium Copyright Act (DMCA) became effective also including the digital network environment as well as print, film and recording media.

Copyright term: Artist’s life + 70 years

Trademarks: TM or ®

While a copyright protects an artistic or literary work and a patent protects an invention, a trademark protects its name or identity.

A valid trademark gives the owner the right to prevent others from using a mark that might be confusingly similar to the owner’s mark especially if someone else uses the mark for similar goods or services thus respecting the owner’s intellectual property.

The ® symbol, however, may ONLY be used AFTER the U.S. Government grants a federal registration certificate. (Nike, Mercedes, etc… ). Being registered through the federal government entitles you to more rights in case of infringement throughout the United States, even in geographical areas in which the trademark is not used.

Licensing Rights:

Licensing copyright rights to a client for use and reuse or reproduction of a design, ad campaign, logo, etc… for a particular purpose, for a particular length of time, or for a particular geographic area for a fee is an issue of basic fairness and standard business practice in the industry.

An artist’s copyright is actually a bundle of individual rights. Each specific use can be transferred outright or licensed separately for a specific length of time. Fees are determined primarily by the value agreed upon between the licensor (artist) and licensee (client). Any rights not transferred explicitly in writing remain the property of the creator.

*In the design/advertising industry, the value of a particular work of art or design is influenced greatly by its use.

Artists can license their work on either a flat licensing fee or on a royalty fee for a specified period of time as agreed by both the licensor (artist) and licensee (client).

It is very important to be specific as each type of design and level of usage influence the final value of the artwork AND scope of the amount of design work to be completed. This information will ultimately assist in finalizing the price structure for the designer and creative budget for the client.

Setting Rates:

Rates vary by several deciding factors:

1.) Distribution:

Mass market – major retailer w/ increased potential volume of sales vs. speciality market – boutique stores w/ potential lesser volume of sales

Pertaining to start up companies: find out how many and which pieces of product, apparel, accessories, promotional materials/merchandise the client plans to produce for its initial and subsequent manufacturing runs.

2.) Type of medium/product:

Where will the finished design work appear? Print (Magazine, Newspaper Publications), Digital (Web, Email, Social Media) Outdoor (Signs/Signage, Billboards) or Multiple Forms of Media? How many mediums within each market category will the artwork appear? (for example, 1 magazine or 10? 1 billboard or 50?, etc… )

3.) Geographic area of use:

How widely will the work be used: local, regional, national, international? As the span of the marketplace increases, so does the work’s exposure, which can increase its present and future value.

4.) Duration of use:

How long will the design work be used – for one time, one year, two years? Limitations on duration of use allow designers to control the exposure of their work and to receive fair market value in each venue where their work appears.

Ownership of original art:

Giving the client the right to artwork or to a design for a specified use or a particular period of time is different from selling the client the physical artwork and submitting all electronic files. The sale of original art is considered a secondary market for graphic designers and is, by law, a transaction separate from the transfer or sale of the reproduction rights OR the original creative fee to initially design the artwork.

All-Inclusive rights “terms:”

Such licensing rights allows the client a one time run or use of the artwork, an unlimited use of the artwork, unlimited use of the reproduction of artwork, including geographic areas, all different types of media but for a limited period of time (usually 1 year), etc.. The rights pertaining to the licensing fee would be agreed by both parties in a legally binding licensing contract.

*the artist also has the right to require limitations on duration of use and separate different designs into different licenses allowing the designer more control to the exposure of their work and to receive fair market value in each venue where their work appears.

For example, the artist can “bundle” all-inclusive rights to client for all artwork EXCEPT for use of ads in publications (magazines and/or newspapers) and would limit the number of “runs” to 5 per year instead of an unlimited amount. Any more “runs” with the artist’s ad/ad campaign would require an additional licensing fee.

All-Rights Buyout:

Finally, there is an all-rights clause, also called a “buyout,” granting the client full permission for all copyrights of all original artwork including all original electronic files that the artist creates for that client. This type of transaction is always the most substantial and highest price point upon negotiation for the artist and client. The value for all original artwork is very difficult to gauge for fair market pricing since a buyout price is determined for the artwork for both present AND future value of the company. The all-rights buyout clause would be valid for the life of the client’s company and would be settled by a legally binding buyout contract.

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