license agreement overview
Hello dear reader! Our goal with this new series, our “licensing primer,” is to familiarize you with the components of a standard art license agreement. We’ll let you know what you can expect to find, what to look for, and how to make sense of the sometimes confusing legalese.
In a “license” agreement, you, the owner of an artwork (usually called “the property” but sometimes “the artwork”, “the work,” “the design”) give permission—in other words, a license—to someone else to use the property. The one who gets the license is the “licensee.” The one who grants the license is the “licensor.” Usually the licensee pays the licensor money. And usually the licensee gets to use the licensed property to create something else that can be sold for money.
A license agreement sets the scope of the licensee’s use of your artwork. The key idea is that the licensee only gets to use your work, not own it, and their allowed use is very carefully defined. Some product manufacturers, aka licensees, will present an artist with an agreement that looks and feels like a license agreement, but is in effect a complete transfer of all rights in the artwork. This is a “work for hire” agreement and we advise artists to never—ever—sign a work for hire agreement. We’ll talk about those in the future, but for now we’re just looking at how you can sell a piece of your copyright, for a limited time, through a license agreement.
Most license agreements you’ll see create basically the same structure. What varies from agreement to agreement, and often widely, is the terminology used and organization of the agreement and how fair the terms are between the artist and the person or company that wants to license their artwork.
Here’s a list of the topics we’ll cover over the coming weeks—topics that most license agreements will address:
- What property is licensed
- What kinds of products can incorporate the licensed property
- The scope of the licensee’s right to use the property
- How long the license lasts
- When and how the agreement ends
- When and how much the licensor gets paid
- Product quality
- Licensor’s right to approve product designs and products
- Copyright notices and credits on products
- The kinds of stores the licensed products can and cannot be sold in
- The geographical territory licensed products can be sold in
- Licensor’s promises about the copyright status of the property
- Licensee’s promises about the safety of the products that will be made
- Whether the licensee can sell products even after the agreement is over
In addition to the items above, a license agreement will have a series of “catch all” or “miscellaneous” provisions that aren’t specific to license agreements but show up in most commercial agreements, such as the state law that will govern the license and how disputes under the agreement will be resolved. We’ll address these as well and help you understand why they matter.
Finally, before we get started in earnest, a word about legalese. When you’re looking at a license agreement drafted in 2015, some of the terms and phrases you’ll see might have been first thought of by a lawyer or business person a hundred years ago. Even though it might seem antiquated or downright bizarre, this “legalese” still often appears in agreements because it’s a traditional way of stating an important concept; by using this common traditional language, all parties can know for sure what’s being spoken about. Agreement language can be pretty dense, too, because the agreement is aimed at covering as many possible situations that might arise in performing the agreement, while capturing those ideas in as few words as possible. As a result, you’ll often see multiple concepts stuffed into single sentences, not always successfully. We’ll keep this in mind as we move through the topics, hopefully shedding light along the way.
On Thursday we’ll start with the bedrock provisions dealing with the artworks licensed and the goods they can be used with. Meanwhile, we would love to hear if you have any specific questions about art license agreements that we might be able to answer here on the blog. Please do send them our way, either via the comments below or by email.
Please remember: The information provided on this blog and throughout our website is intended for general educational purposes only. While some information on this site relates to the law as a topic, it's not intended as a substitute for legal advice. Only a lawyer, selected by you and fully informed of the facts relating to your particular situation, can render legal advice.