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Understanding
Licensing: What it's all about
What
is licensing?
Licensed
products are something we see every day. They surround us in the form of food,
cleaning products, clothing, even computers... everything imaginable! One of the
most popular examples of art licensing is with Peanuts and Garfield. Both brands
started as comic strips and have exploded into licensing dynasties. Their images
show up on a wide variety of products including stationary, clothing, TV specials,
and even on your lunchbox! Even in sports, licensing is a crucial part of the
game. Every time your favorite team's logo is printed on a t-shirt, it is through
permission from a licensing agreement between the owner of the logo and the manufacturer
or printer of the shirts.
The
owner of the team logo (who is called the licensee) gets a royalty fee for every
t-shirt printed with his logo. This fee is established in a licensing contract,
and ensures that a royalty (a certain percentage of the sale profit) is paid to
the licensee every time a shirt sells. Licensing agreements also include guidelines
for using the logos, usually called a style guide. How team colors are used, as
well as the size and font of the logo, is part of the team's brand, and their
usage and regulations are explained in the style guide.
By
licensing a logo, a team can make a profit from their image without investing
in the equipment and industry needed to produce and distribute all the clothing
and other novelties themselves. It allows the team's brand to be distributed in
such a way that it can be seen and enjoyed by a larger number of people.
One
of the many books that explains this process is Licensing
Art & Design by Caryn R. Leland. This book covers a wide variety of
topics which introduce newcomers to the business of art licensing. The chapters
include information on copywriting, trade marking and patenting, and licensing
agreements in terms of the long term/short term. It also covers how to license
artwork from an artist, model agreements, and how the web is involved. Comparative
average royalties and resources for designers are also included.
What
are some of the key terms used in art licensing?
Licensor
- the person providing the artwork
Licensee - the company that will
use the artwork either on their products or as a whole entity
Licensed Property
- the artwork
Royalty - a percentage of the proceeds that the artist
receives from the sale of the licensed product
Advance - An amount paid
to the artist before the product is sold
Style Guide-The rules and regulations
for use of a Licensed property
How
do you find places to license work?
There
are basically two ways to find a place to license work. One is to do it yourself,
the other is to find an agent to do that for you.
When
starting out on your own, research companies who provide products that you think
your work would fit with and contact them. Put together a power point presentation
and make up folders to send out containing marketing materials. Always have images
ready to email and don't forget to add your copyright to all work. Many companies
have web sites with more information on what they expect from potential licensors.
If you instead
decide to hire an agent, make sure that agent specializes in the field you are
trying to break into. Compensation is usually 15-25% of your earnings from licensing
your work.
Either
way, many of these contacts can be gained through trade shows. So, depending on
whether you want to license your design to greeting cards companies or gift companies,
that would determine which you go to. There is a trade show for everything. You
can look at www.Javitscenter.com
for more information on what is going on where. The two main trade shows are Surtex
and Licensing
International. They also offer conference programs covering all aspects of
licensing, you can find out more about the Surtex programs here.
What
goes into producing artwork intended for licensing? What will they need from me?
The requirements are different
according to the company you are working with. Again, greeting card companies
are going to need something very different then gift companies. However, a finished
prototype is often needed in order for it to be reproduced by the licensing company
accurately.
What
should I ask for in my contracts?
In
a perfect world you would ask for a percentage of the profits that increases yearly,
as well as an advance payment and guarantee. You would also ask that the company
pay all travel and related expenses. However everything depends on the company
as well as the market and your track record. The more established as an artist
you are, the more freedom to negotiate you have.
You
should make sure there is a clause in your contract whereby the molds of your
work are destroyed after the contract expires and that you retain the copyrights
and only assign the marketing and distribution rights. You could also ask to periodically
receive samples of the pieces to monitor the quality.
What
about royalties?
You can find royalty information
and percentages in the book Licensing
Art & Design and also in the Graphic
Artists Guild Handbook.
Do
I need to travel to the factories to check on the progress of my work?
No, the companies should send
you samples and proofs.
If
a company is interested in doing lines with different materials do I need a separate
contract for each line?
No,
you can have all the lines included in an exhibit. The contract would say it was
a see exhibit and list all the categories and lines.
A
company has indicated that their staff can sculpt prototypes based on my "style."
Do I allow this?
Yes,
a lot of factories are very good at this. You provide the flat art and they can
create the item, however you should always get final approval.
How
do I keep my ideas and work from being stolen?
The
moment you have produced artwork in tangible, ready-to-be copied form, you own
the copyright of that artwork. You do not need to add a copyright notice; it is,
however, advisable to register your work with the government. You may also file
for a patent or trademark, read more about all three in the book Licensing
Art & Design or at the US copyright office website, www.copyright.gov.
How
much does it cost to license a product?
The
costs to consider in licensing your artwork are the costs associated with your
creation materials and time, marketing materials, cost of an agent and cost of
getting a patent, trade mark or registering copyright. If you are successful in
starting a licensing business you will also need to hire a lawyer and either on-site
employees or hire people on an as-needed basis to do contract work. For example,
you might want to hire someone to run a marketing program for you for a specific
amount of time.
How
do I find knowledgeable employees?
By
placing an ad you can find a lot of really qualified people to do office work
and grow into a licensing position. You can also go to trade shows and ask around
to see if there is anyone who is looking for a job. It is also a good idea to
build liaisons with local colleges and universities, offering internship programs
for students.
Read
Karen's Trade Show Tips
If
you have any other questions after reading Licensing
Art & Design
please feel free to contact us and we will post the answer here.
