Contracts 101 - Resource Guide for Artists

[ladiestorm]

Thank you so much for all of this! I admit, some of the legal wording I don't quite understand, but at least I know, now, that there is someone I can talk to for answers to specific licensing questions.

In fact, I have a couple of questions I would like to ask you now, if that's okay? And these questions might help others down the road. I've been looking for 'standard' limited use licenses for commissions, but I haven't really been able to find what I'm looking for. And the thought of having to write my own is.... daunting to say the least!

I have a commission I've been working on for over a year now. I want to include a limited use license for a map I'm making to a couple of authors who are writing a book. Now I agreed to do the commission free of charge, because I know these authors are doing this project on a shoe string budget. (As a fellow self published writer, I know how stressful that can be, especially on the wallet!), however... I also feel I should have the right to payment if this book really takes off... for example if it becomes mass produced by a third party (publishing company), or if it goes into mass reprint (different languages from that of the authors). Because this is 'pro bono' work initially, I'm retaining the copyright. So how would I go about writing a limited use license with that scope? I live in the state of NC, btw... I'm not sure where they live.

The second is on a commission I've just accepted. It will be a paid commission for private use (roleplaying campaign). Again, I will be retaining the copyright, and allowing client to use and distribute among his group for the sake of his game. He has initial creative input (there are certain things that have to be in certain places, and certain criteria has to be met ie: wall around the city, with 4 gates, etc) but he's leaving most of the creativity up to me. I have no problem allowing him to use the map I'm making for his group considering the amount he's paying me to make it. But if someone else approaches him to use the map I've made for his use (for what ever reason), I feel I should have the right to request the new person be directed back to me to purchase the right to use the map I've made. First, would this be considered reasonable, and second, how would I go about wording that? Follow up, since he will be paying me in installments, would it be reasonable to indicate that the product will be delivered once I'm paid in full?

[aeshnidae]

This post is intended for general information purposes only. It does not constitute legal advice and does not establish an attorney-client relationship. If you need legal advice, please contact an attorney directly. Many states have pro bono programs to assist artists.

Gotta include the above statement for legal reasons. Unless you live in Maryland, I cannot provide legal advice about a specific situation. But I can provide general information about the law without running afoul of licensing regulations, so let me talk generally about some intellectual property issues: non-commercial versus commercial licenses, use limitations, and bonanza clauses.

As I mentioned in an earlier post, your maps are your intellectual property (IP); you hold the copyright in them the moment you create them. When you take commissions for maps, you can assign your copyright to the person paying you (which is what happens if there is “work for hire” language) or you can license your copyright. Remember that if you assign your copyright or exclusively license it to someone, you can’t use that map at all – you can’t even post it on your website – unless you retain a license for yourself.

For the rest of this post, I’m occasionally going to use “Commissioned Work” to refer to the map you’ve made for a client. You can call it whatever you'd like, just define the term (see my earlier post about contract definitions).

Commercial v. Non-commercial License, Use Limitations
Licenses can be for commercial use or non-commercial use. Getting paid for a commission does not mean you have to also grant a license beyond a limited use non-commercial license (you don’t even have to grant that, but clients reasonably expect it). You can think of it like buying a car – you pay a set amount for the basic car, but if you want weatherproofing and special rims, that’s extra. It’s the same for a commission – the client is buying the basic map (or digital image of the map), but if they want to use it for special purposes, that’s extra.

Here’s some possible language for the grant of a non-commercial license: “Cartographer hereby grants to Client a non-exclusive, non-transferable, non-sublicensable, world-wide, perpetual, paid-up, royalty-free right and license to use the Commissioned Work for non-commercial purposes.”

Here’s possible language for the grant of a very broad commercial license: “Cartographer hereby grants to Client an exclusive, [OPTIONAL: royalty-bearing,] world-wide, perpetual, non-transferable (except as a sublicense), sublicensable right and license to the Commissioned Work to make, have made, use, sell, offer for sale, market, lease, import, have imported, or otherwise exploit the Commissioned Work.”

You can place limits on both commercial and non-commercial licenses. For instance, let’s say your client wants to use the map for her D&D game. That’s a non-commercial use. But if you want to limit your client to using the map ONLY for her D&D game – maybe you don’t want her to post it on her website or give it to someone else to use in their game – you can limit the non-commercial license to game use only. If so, you could say “Cartographer hereby grants to Client a non-exclusive, paid-up, royalty-free license to use the Commissioned Work solely for the purpose of Client’s non-commercial D&D campaign.”

Another limit might be geographical – you’re licensing your map only for use in the United States, for instance. Or temporal – you’re only licensing your map for a period of 2 years. The more limitations you apply, the less a client will want to pay for the license, so keep that in mind.

That said, if there is any chance your client will make money from the map, you should consider charging for a commercial license. You can charge an initial licensing fee, an annual licensing fee, and/or royalties. The royalties can kick in immediately, so that you get a certain percent of every sale, or they can kick in once the client hits a certain number of sales. The annual licensing fee can kick in later, too. Basically you can structure payments and fees in any way you want (although your success at getting clients to agree to hefty payments and fees will vary). If I were making a map for a private individual to use in his personal game, or to hang on his wall, I wouldn’t charge a licensing fee at all; I’d just wrap everything up in the overall cost of the map. But if I were making a map for an author who sells a good number of Kindle books, I might consider charging some type of fee and/or royalty. And if I were making a map for a company, I would absolutely charge an initial licensing fee and would also consider annual fees and royalties. A lot of this will depend on how “in demand” you are as an artist and who your client is.

Here’s an example of license fee language: “Client shall pay an initial non-exclusive license fee of [insert dollar amount] within thirty (30) days of the Effective Date of this Agreement. Client shall pay an annual non-exclusive license fee of [insert dollar amount] on [insert month and day] of every year during the term of this Agreement.”

Here’s an example of royalty language: “During the term of this Agreement, Client shall pay to Cartographer an earned royalty based on the total net sales of any product containing the Commissioned Work. The royalty rate to be paid shall be [enter percentage – usually 1% or 2%]. Client’s obligation to pay royalties shall continue until the expiration of Cartographer’s copyright.”

Bonanza Clauses
What if you want to help out a fellow artist and are willing to work for free, but want to get compensated if the client makes a boatload of money? Bonanza clause are a great way to work free of charge or at a reduced rate but guarantee that if your client starts making a bunch of money off your map, you will get to share in the success.

Here’s some bonanza clause language that could be added to the Royalties section of a license agreement: “If the cumulative net sales of products containing the Commissioned Work exceed $10,000, Client shall pay Cartographer a 1% royalty on the total net sales. Payment shall be made on a quarterly basis beginning one month after net sales exceed $10,000.”

By the way, you can include royalty and license payment sections even if you don't use them. That serves two main purposes: (1) you're letting the client know that licensing fees and royalties are industry standard terms, and (2) you can use a single template agreement and keep the paragraph numbers consistent across all clients. If you want to do this, it would look like: Section 9, Royalties. [Reserved.]

[aeshnidae]

Follow up, since he will be paying me in installments, would it be reasonable to indicate that the product will be delivered once I'm paid in full?

Yes, I would certainly not deliver a completed map until the client had paid in full. I might deliver the map in stages - deliver low-res .jpg of pencil sketch, get paid installment 1; deliver low-res .jpg of inked map, get paid installment 2; etc.) One of my earlier posts talks about deliverables and payment schedules (I know my posts are super lengthy - it's hard to be concise but complete - so just Ctrl+F "deliverables").

[Raven9]

Thanks! This is very helpful!

[aeshnidae]

Thanks! This is very helpful!

You're welcome! I've seen too many companies take advantage of artists, so I'm trying to level the playing field a bit!