Intellectual Property Law

Know the Basics: An Easy Guide to Creating an Artist Licensing Agreement

Follow along as we explain why you should consider licensing your art and the main details you should include when putting together your first art licensing agreement.

Are you an artist looking to expand your reach, build your brand, and make more money all while maintaining control over your artwork? Well then, licencing your art might be the way to go. Today, we will go over what you need to know in our guide to creating an artist licencing agreement. Follow along as we explain why you should consider licensing your art and the main details you should include when putting together your first art licensing agreement. 

What Is An Art Licensing Agreement? 

An art licensing agreement is a neat way for artists to make money on their artwork because it allows an artist to rent out their artwork to different companies or individuals. Whether it is a real estate company trying to stage a home with artwork or an event in need of different art pieces, artists have many opportunities to rent out paintings, framed artwork, and other tangible pieces all while maintaining ownership of their work. 

It’s not just renting out artwork that lends itself to art licensing either. In today’s entrepreneurial society, there are different companies that sell goods such as clothing, decor items, and other personal products which look for freelance artists to partner with. These types of art licensing agreements pay out royalties to artists and usually include a nice advance payment. Lots of companies decide to go through this path when looking for artwork because it can often be easier and more affordable to license artwork from a freelance artist and then it would be to hire an artist in house to create original work. As styles and trends change, companies with products are constantly looking for artists that can adapt to this change. 

Why Should Artists Use Licencing Agreements?

Many artists choose to license out their artwork because it allows them to generate an income using their art in a way that is passive and easy. Perhaps the main benefit of using a licensing agreement is the reality that it allows an artist to maintain ownership of their artwork, all while continuing to make money off of it. 

Retaining ownership of your work also allows you to dictate exactly how your work is being used. Artists should consider licensing agreements because these agreements allow them to control all aspects of how their artwork is modified, who is allowed to make copies of the artwork, and who has the right to display the artwork and where. In general sense, an artist licensing agreement allows you to give permission to specific individuals that want to use your work and you can dictate exactly how your artwork is used.

The world of art licensing is only growing and is estimated to make up under 10% of the multibillion dollar licensing industry. As the world of e-commerce and small businesses grow, so has the demand for licensed artwork. For many artists, this growth is a prime opportunity to generate income. 

How To Create an Artist Licensing Agreement

When you are creating an artist licensing agreement, you want to make sure to cover all the bases pertaining to the partnership with your client and how your artwork can be used. In our art licensing guide, we’ll take a look at the basics that every art licensing agreement should have. Depending on the type of art you are licensing, who you are working with, and how your artwork is being used, you may need to include additional aspects into your art licensing agreement. Our guide will go over the basics that every artist should cover.

Identify the Parties Involved

As with any agreement, your art licensing agreement should stipulate who the parties involved are. If you are working with a small company, it’s important to include not only the company name but also the owner or president of that company in your licensing agreement. If the client is an individual it’s important to list that individual’s personal information including their full legal name and their mailing address. Do not rely on an individual’s business name alone as this can create legal complications if a legal issue were to arise. When you are listing the client, it’s important to address that no additional parties will be involved including third parties that your client may work with. 

Stipulate the Time Period or Life of the Licence

Whether you are renting out physical pieces of artwork or are renting out agreements for reprints of your artwork, it’s important to detail the time frame and the time period you are renting out your artwork. If you contract with a manufacturer of goods and your partnership is set to be an indefinite agreement, it’s important to have details of how often the contract will be renewed. Typically, you may want to renew your contract every year. This will allow you to make any necessary changes if they are needed from year to year. Some agreements can be renewed longer than a year if they fit your circumstances, but because of how quickly e-commerce markets change, having annual renewals is best.

Detail the Terms of The Licenced Artwork

When you create a licensing agreement, it’s important to outline the terms and details of the agreement. With details that pertain to the ownership of the artwork, you need to be specific to what your current situation calls for. For example, take these details into consideration:

  • Will your client be allowed to license out their products with your artwork on it to third parties? 
  • What products will all your artwork be on (This might change your fees)?
  • How will your artwork be distributed?
  • What are the details of tangible artwork that is licensed then returned in a state not consistent with how you rented it out and how will this be documented? 
  • Who will be in charge of certain elements of the partnership including individuals responsible for edits of the artwork or individuals responsible for communication about the artwork? 
  • Where will the products be sold and are there any geographical restrictions?

When you list specific terms and details, you can ensure adequate protection of your art so that it does not get claimed as someone else’s work, it does not get modified without your permission, and it is used for the intended purpose of the license.

Go Over Payment 

If you are licensing your artwork to a company and are also selling copies of the artwork, then you will need to discuss advance payments and royalties. Royalties for artists can span anywhere from 4% to 30%. It really does depend on the type of art you are selling and how a company will use it. If you will be selling posters and prints of your work, the royalties can range from 10% to 15%, but again, it depends on how that print or poster ends up being used by the company you are working with.  

Typically, the more recognizable the brand you are working with, the higher your royalties should be. Where the product with your artwork will be sold should also be considered when factoring the price. Will the product be sold in mass markets such as Wal-Mart and Target or are there specialty markets where the quality of the product is higher resulting in a higher royalty rate?

When determining what an appropriate loyalty is for your artwork, you need to consider how your work will be used. Some questions to ask yourself include

  • What are the products that the company produces?
  • Where will the products be sold?
  • How many different products will your art appear on and we’ll each product charge the same royalty?

If you are licensing physical works of art like a canvas painting or a unique piece of work, then you need to stipulate how payments will be made through the duration of the contract. If payments will be broken up, then you need to stipulate specific dates. If there are additional fees associated with your licensing agreement such as transportation fees, deposits, and damage fees, then those need to be stipulated as well. Along with royalties, you need to stipulate the sum of your advance. Be sure to also list the date of when this payment should be given.

Identify Terms By Which the Parties can Void the Contract 

Along the process, you and your client may reach a point where you realize that the agreement is no longer working or applicable. When this is the case, it is important to have terms by which the parties can void the contract. The terms can be simple and straightforward such as the parties are no longer interested in working together or the terms can be more complex detailing fees for early termination. The more complex your art licensing agreement is, the more detailed your contract termination terms will likely be.

Should You Seek Legal Counsel?

If you are working with major brands or have a big licensing agreement on the table, then it can be beneficial to have legal counsel on your side. A licensing attorney specializes in licensing agreements and can help you draft a licensing agreement that covers all the bases of your unique situation. 

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