Posted by: Kathy Temean | November 20, 2018

Ask Cat – Licensing

On the third Tuesday Christina or Christy Ewers Tugeau of the Cat Agency answer questions and talk about things illustrators need to know to further their career. It can be a question about an illustration you are working on, too. Please email your questions to me and put ASK CAT in the subject box.

HERE IS CHRIS:

Licensing Market….big questions?

I have been asked a couple of times in the last month to look over a contract that is Licensing – not Publishing.  They are similar, and can overlap, but are also quiet different.  I’m happy to do that for our artists, even though we won’t usually handle that market unless it’s connected to a book project.

About 15 years ago or so I’d considered going into this area as well as agent, and even went with one of our artists to 3 days of Surtex NY Show at the Javits Center….. realized I didn’t have an extra 8 hrs a day to put into this licensing market!

So I thought I’d share a couple of issues and thoughts and things to be careful about with these Licensing deals.  Licensing, it the contractual agreement of rights usage for images/designs that MIGHT be used for various manufactured uses. (it can include a published print product as part of the deal, of course.) Examples are clothing, home decor like bedding and  shower curtains, mugs, toys prints, etc. etc.   First of all…it’s tricky…and I do recommend getting a lawyer versed in this area if you are planning a push into it. And read up on the market…. in various artist ‘how-to’ books available out there.  EDUCATE yourself! and be careful.

I mentioned your work MIGHT be used.  It’s more of a ‘risk market’ for the artist as there is usually NO upfront advance for the work done. It’s all in royalty WHEN and IF the item sells, and you get a percentage of this sell price during certain royalty accounting periods. (reason I as an agent do not get involved normally.) The company might be buying an existing image(s) which is great…. expands the market for that image if you own ALL rights to sell certain rights too them.  Be sure of that fact first off so you don’t get sued.  If they want you to design something FOR them, in the hopes that they will pick it up and maybe sell it….. well think about that. Could be great! or come to nothing….with no compensation at all.

So here are a few things to be watchful for in a Licensing Contract.  There are certainly others, which is why I suggest contacting a lawyer.

Statement of rights Purchase: states client name and yours, and what exactly the image(s) is and what the expected sale product is:  description, title, etc.  and the exact rights they are purchasing.

This should include the size, number, expected due dates (this is often rather loose….which can run havoc on your schedule)
This includes the length of time terms of the rights purchase.  I would encourage limiting this to a year to three so you can rethink, negotiate or withdraw their usage. Watch for AUTO-RENEWAL…. might be ok, but have a way to get your rights back after the initial time frame if you wish them.  Usually you have to let them know at least 30 days before the auto-renewal…but check!

This also includes a statement that you RETAIN OWNERSHIP of the art work -paintings, design etc., that their product is based on. You should/might have the right to sell the copyrights again to another product user as well!  – ask!

You also RETAIN COPYRIGHTS…you are merely selling them temporary particular usage. This needs to be stated specifically. (it may be a bit loose as they may not know…. but require them to TELL you when they do know.)  Again, check to see if you can resell the image for other uses.

Royalty amount….that varies greatly but often 7-10% but could be more or less due to marketability size and expectations.  ** royalty based on what?… often NET sales which is what company actually receives from sales (which might be discounted) less returns, excise and sales tax, US and transcontinental duty fees, freight, transportation and insurance costs.

This will include the normal ‘accounting period’ time frames when you can expect statement of earnings and a check.  Any deductions for such things as returns etc will show up during the next statement period normally.

Warranties:  you will have to legally swear that the image is yours, and yours alone,to grant the rights for client to use.  Check the jurisdiction of any injunctive relief court information.

They may mention that they have the right to ‘assign freely’ this agreement to purchasers or to subsidiaries.  This might be fine if the client is bought out for instance, but you might NOT want to have your image used in ways the subsidiaries or new buyer might want to use it! watch this…. maybe find a way to change wording to protect yourself encase of such a situation.  Check too if they pay any US and international copyright registrations….are there costs to you.   They may also state that they can crop/change the work to reproduce.  This normally has to do with ‘fitting’ the image to the product, but be sure you are comfortable with it. You can try to get copies of every piece of licensed product too.  As we expect in publishing.

I hope this has been  helpful for those who might have the opportunity to get some images licensed.  It can be very lucrative….or nothing at all! But read the contracts very very carefully and be sure it won’t HURT you or your reputation.   Talk to other artist friends who might have had experience with Licensing too…invaluable!  Then have FUN with it and wait for the royalties to roll in!

Christina Tugeau
       The CAT Agency Inc.


 

Thank you Chris for another great article.

IMPORTANT: We have not been getting enough questions submitted to keep the column going, so December will be the last ASK CAT. If I receive enough questions to send to Chris, I may be able to convince her to return with the column in May 2019. Note: If you have a questions now, Christina could answer it with December’s ASK CAT.

Send your questions to kathy(dot)temean@gmail.com and put ASK CAT in the Subject Area.

Talk tomorrow,

Kathy


Responses

  1. Thanks Kathy and all! I love doing this monthly article but the purpose is to HELP your career! – so let me know how! 😁

    Liked by 1 person

  2. Christina, this is all invaluable info, as always, so thank you 🙂 . If I’m ever lucky enough to be in this position, there’s no question I’d want a lawyer!

    Like

  3. Art licensing is definitely its own thing! And sometimes even after negotiating a great contract, the royalties are very small if sales are low. It’s a lot of up-front investment and a lot of speculative work.

    Like


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