Friday, August 25, 2017

Bo's bLAWg - Performance Provision


MJ Bogatin (“Bo”) of Bogatin, Corman & Gold, is an Arts and Entertainment Attorney in San Francisco.  He is also a long-time President of California Lawyers for the Arts. www.calawyersforthearts.org. Bo is available to answer some of your questions surrounding the business of Art Licensing. - THANKS BO!
 
Dear Bo,
I licensed some illustrations to a group that provides imagery to manufacturers.  Only one license was ever entered into to my knowledge.  It was provided on an exclusive basis!  My agents indicate that to their knowledge my illustration was never used on products as anticipated.  I want to leave this licensing group and recover rights to my illustration.  What are my rights?  Hillary


Dear Hillary,
There are a number of issues included in your question.  I cannot answer any of them definitively without looking at the existing contracts, but they are good for this bLAWg!
Here is how I would approach the matter.

First, I would look for the Performance Provisions of each contract, the one with your Agent group and with the manufacturer.  I would hope that you did not sign up long-term with this Agent without there being some minimum level of success with respect to licensing of your illustrations in particular.  Back in October of 2015 I discussed the use of “Minimum Thresholds” to insure that a manufacturer was making adequate use of your illustrations for the ongoing benefit of each party.  (see http://annietroe.blogspot.com/2015/10/bos-blawg-get-back-your-rights-royalty.html)

The same kind of Minimum Threshold approach can be used with an Agent.  They may need rights without minimum earnings for a year to ‘ramp up’ on their promotion of your artwork, but by the end of the second year I would hope and expect that they would have secured a sufficient number of advance$ to meet their own minimum expectations as well as yours.  As I mentioned in Oct. 2015, the Licensee’s or Agent’s own projections on these expectations can serve as the contract Minimum Threshold.  If the Agent will not agree to financial minimums, they may consider a minimum number of licenses to be obtained within the first two years of the Agreement.  If that expected minimum is not met, the provision would allow either Party to the Agreement the right to terminate it early.

With respect to the manufacturer, the common “Performance Provision” requires them to make use of your licensed imagery within a certain number of months since execution of the Agreement, or lose the licensed right to use your imagery.  The basic Performance Provision is intended to insure that your illustrations are not being ‘banked’ but must be used within a reasonable period of time.  If the manufacturer fails to move forward with the expected product use, you (or your Agent) would have the right to terminate and recover your rights to the imagery.  See if there is not a Performance Provision in the License signed, and if you do not already have the right to terminate that license.

I should mention here that sometimes the manufacturer is just about to go to market with a product featuring your illustration(s).  If they are ‘in breach’ by not meeting the “performance”  deadline of the original License, you can jam them up by given them notice of a breach of contract and demanding that they “cease and desist” from use of your imagery.  A compromise at that juncture might include a significant new additional advance on royalties.

However, do not overlook the possibility of a contract “Cure Provision.”  Does the manufacturer License give the manufacturer additional time to cure the claimed breach and avoid the termination right?  Many do.  In which case, not only must Notice of the Breach be given in the  manner specified in the License, but the manufacturer may be able to avoid the breach altogether by getting the product with your illustrations into distribution within the (usual) 30-day cure period.  Don’t be disappointed if that is exactly what occurs.  Isn’t that what you actually wanted in the first place – the products with your artwork in the marketplace?  Sometimes, the manufacturer just needs to be hurried along.  The Performance Provision can be useful for that purpose.

Disclaimer: The information contained in this website is not intended as legal advice. Because the law is not static, and one situation may differ from the next, we cannot assume responsibility for any actions taken based on information contained herein. Also, be aware that the law may vary from state. Therefore, this website cannot replace the advice of an experienced attorney. Receipt of this information does not create an attorney-client relationship. MJ Bogatin, Bogatin, Corman & Gold, www.bcgattorneys.com
© 2017 mjbogatin


Have a legal question? email it to info@AnnGraphics.com. I will forward it to Bo. It might be a blog post! You can search "Bo's bLAWg" to read more posts. I am looking forward to your comments and thanks for sharing this great information on social media.

Make my day! and Buy me a cup of coffee (PayPal Link in right side bar, you don't need a PayPal acct.)

 Don't want to miss the good stuff? Sign up for my newsletter ;-)

 

2 comments:

Related Posts Plugin for WordPress, Blogger...