Bo's bLAWg - Copyright Term and Unpublished Works

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 was in my mother’s attic and discovered a box of my Great Aunt's personal writings and illustrations.  It appears they date from 1880 and earlier to her death in 1925.  I don’t think any were published, but I do not know!   I would like to publish them.  You indicated in a prior bLAWg that works published before 1923 are in the Public Domain.  What about unpublished works from that date and earlier?  Thanks!  Teri

Good question, Teri.  The Term of copyright for never-published works does require a different analysis from that we use for published works.

Start with the contemporary Term:  the life of the author/artist plus 70 years.  Working backwards, if the author/artist died more than 70 years ago – before 1947 – then their unpublished works are in the Public Domain.  So, if you knew that none were published, we could conclude with certainty that all her writings and drawings are in the Public Domain (“PD”).

Had any been published, and the copyright registered as required under the 1909 Act, you will recall from my earlier bLAWg, that a registration in its Renewal 28-year Term 1923 through 1963 was granted a Term of 95 years after its original publication date.  So, were you able to determine that certain works were published, the 1923 rule applies.  Those published in 1923 would have their last year of copyright protection in 2018.  Works first published in 1924 would be protected through 2019, and those published in 1925 would lose protection as of January 1, 2021.  (See http://annietroe.blogspot.com/2016/09/bos-blawg-copyright-term.html )

I would add that there is a different rule for unpublished anonymous and pseudonymous works, and works made for hire (corporate authorship).  In the case of these, the Term is 120 years from date of creation.  So, had you found these materials but their author was unknown to you, it is quite possible that those works could still be subject to copyright protection.  It is just a matter of knowing when they were created.  As of this year, creation before 1897 would make them PD.

Here is an online Chart that addresses this Term information for both published and unpublished works:  http://copyright.cornell.edu/resources/publicdomain.cfm
 
Now, I want to say a few other things about works in the PD.  First, while you have an absolute right to use these works any way you want, anyone else who has access to them would have the same right of use.  Were you not to grant any third party access – or limit access to those who sign a Non-Disclosure Agreement with you – you could be the first to publish, and thereby have that advantage on any third party who might want to publish or make other commercial  use of them.  Even better, were you to publish them in a manner that includes contribution of new elements and materials by you, you have an absolute right to claim a new copyright for your additions to the PD material.  By publishing a copyright notice with respect to your own contributions, would anyone else necessarily know which is your new material and which your Great Aunt’s?  Not necessarily…

More likely, however, even if you made known which was your Great Aunt’s original work, it would be impractical for any third party to ‘separate’ the PD material from your own additions and/or material enhancements.  For instance, with your Great Aunt’s pen and ink drawings, were you to add colors, they might make a line of beautiful new greeting cards.  While third parties would legally be able to strip out your color and look to add their own color choices, more likely than not, they would honor your copyright notice and published efforts.  There would be little economic incentive to go to that trouble since your line is already available for sale. 

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

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.

 

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Bo's bLAWg - Copyright and Useful Items

 

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!

What is this I heard about a copyright and cheerleading uniforms case before SCOTUS?  Does it have anything to do with design licensing?  (BTW I love your bLAWg, Bo!)  Jeff

Always happy to discuss copyrights in the news, Jeff!  Let me summarize the case to which you are referring.  It is called Star Athletica, L.L.C. v. Varsity Brands, Inc.  Varsity Brands is one of the largest purveyors of cheerleading uniforms in the country.  Star Athletica is a smaller competitor.  Varsity registered its copyrights on certain “chevron designs” used in a new series of uniforms.  Star’s catalogue the following year included a number of similar chevron designs in its new uniforms.  Varsity sued.

What is a chevron?  I didn’t know!  Here is a link to some other legal bloggers who dug up the Varsity copyrighted designs and the Star catalogue uniforms:  https://www.knobbe.com/news/2016/11/chevrons-stripes-cheerleaders-and-copyright-supreme-court-hears-oral-argument-star  Now I know what a chevron is! 

The matter sounds straightforward enough, doesn’t it, Jeff?  What’s the issue that brought such a case all the way to the SCOTUS?  It is simply this:  Is the Varsity chevron an article that is part of a useful item like a cheerleading uniform, or is it something else; something uniquely creative simply added to the useful article? Copyright does not apply to “useful items”.  It has always applied to the sculpture that is turned into a lamp, and the illustrations that are added to mugs, but what about clothing?  Historically, clothing and its elements, from zippers to hidden pockets, have always been considered useful items.  Some of these items may be entitled to patent protection, but not copyright.

Copyright is limited to “original works of authorship” that are not in themselves “functional”.  (See 17 USC Section 101:  https://www.copyright.gov/title17/92chap1.html#106a )   Section 101 defines a useful article as:

an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information. An article that is normally a part of a useful article is considered a “useful article”.

Reasonable minds can differ.  The Federal District Court in Varsity’s copyright infringement case found that the chevrons had a utilitarian function with respect to the uniforms.  Varsity appealed.  The Federal Circuit Appellate Court reversed, finding that the chevron was a design that “incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article” per 17 U.S.C. § 101.  Star appealed to SCOTUS.  Undoubtedly, as indicated by the reversal of the original Judgment, Stars’ attorneys considered this to be “a close question.”  And no doubt there were a lot of damages at stake.  Remember, having lost on appeal, Star could be liable not only for large damages, but for all Varsity’s attorneys’ fees and costs incurred for bringing their action, as well as Stars’ own.

When it came right down to it, SCOTUS did not consider this to be such a close question.  It applied the usual legal “test”:  Do the artistic features of the useful articles includes a separate identification or “separability” requirement and an independent existence requirement.  More particularly, “(1) can the chevron designs be perceived as a two- or three-dimensional work of art separate from the useful article and (2) would they qualify as a protectable pictorial, graphic, or sculptural work either on its own or in some other medium if imagined separately from the useful article?”

Justice Thomas, writing for a five-member majority of the Court, affirmed the Judgment of the Sixth Circuit Court of Appeals.  This majority identified the two key requirements – that the chevron features were separately identifiable from the cheerleading uniform, and are capable of existing independent of the utilitarian aspects of the uniform.  It also reasoned that removing the surface decorations from the uniforms in the abstract and applying them in another medium would not replicate the uniform itself.

So, Jeff, you want to make a million bucks?  Attach some of your original artwork in ambiguous fashion to a top-selling article of clothing.  Register your copyright, and let me know when you someone infringes on your design.  We’ll rack up.

Disclaimer:  The information contained in this website is not intended and should not be relied upon as legal advice. Because the law is not static, and one situation will differ from the next, the results will differ as well, thus we do not assume responsibility for any actions taken based on any information contained herein. Also, be aware that the laws vary from state to state. Therefore, this website cannot replace the advice of an experienced attorney who practices within the jurisdiction involved in your issue or dispute. 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.

 

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Bo's bLAWg - Continuation Fees to Licensing Agents

 

 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!

My Agreement with my licensing agent is expiring.  It is my understanding that she gets to receive her commission on licenses that she negotiated.  Can you tell me how long this goes on?  How it works?  After we terminate, aren’t I entitled to receive my royalties directly from the licensees and account to her?   Trudy

All Licensing Agents will include a “Continuation Fees” provision in their Agreement with you as the Licensor Illustrator.  The essence of this provision is to give the agent the right to receive their commission on your royalties -- for as long as you receive such royalties -- on a license they placed and/or negotiated on your behalf.  The Term of the Agency Agreement may expire (if it is not renewed), but the agent expects to “continue” to share in the benefits of her services for as long as you do.  Hence the name “Continuation Fees provision.”

The provision typically appears in association with the termination provision, but not always.  It reads something like this:

“It is further agreed, regardless of termination and/or cause, Agent will continue to receive its full 50% share of all Gross Revenue associated with all License Agreements procured by Agent during the Term (and any renewals, extensions and/or modifications thereof).”

I have left in the highlighted, “and/or cause” part of this provision, because this is the kind of term that might be slipped into the otherwise expected provision.  You might miss it if you were not aware of the implication.  What the “and/or cause” means is that even if the Agency Agreement were to be terminated for breach on the part of the agent, like non-payment of royalties due their illustrator client, they would be able to rely on the contract to continue to collect commissions on agreements they made for you!   I say, “No way!”  Commission continuation right should depend on the full, good faith performance on the part of the Agent.  If they screw up and breach their Agreement, all their commission interests should be put at risk.  

In an analogous situation, the California Labor Commission takes the position that if someone is operating as a musician Booking Agent without a license from the Commission, the musicians they represent can make a claim that all commissions earned be surrendered to them.  This includes both past and future “Continuation Fees” that Booking Agents as well include in their Agency Agreements.  Why should illustrators be treated any differently.”  While literary and illustration agents are not licensed, their clients should not have lesser rights than musicians.

As for the issue of continued accounting rights, as long as the Agreement has not been breached, and the Licensor Illustrator had all agency rights revert, it is reasonably expected that post-term, the agent will continue to collect royalties due under the licenses they negotiated.  They will continue to take their commission due, and then account to their former client on the balance due for as long as the underlying Licensing Agreement continues.  Some of the more comprehensive Agent Agreements expressly include this expectation:

“Upon expiration or termination of this Agreement, Agent shall continue to collect payments under any and all License Agreements negotiated during the Term (and any renewals, extensions and/or modifications of the same) unless otherwise agreed by the parties.” 

And, just in case there is any question of whether the Illustrator should contact the Licensee and request direct payment since they are no longer represented by the Agent, some Agreements also make clear they cannot as follows:

“Artist further agrees that Artist, after expiration or termination of this Agreement, may not make any changes in the payment instructions contained in any License Agreement or other arrangement covered by this Agreement to direct any licensees to make payments directly to Artist.”

I would like to offer one alternative to the standard agent Continuation Fees provision.  It is commonly called a “Step-down rate.”  In short, if the commission due is 50% when the Agreement is entered into, two years after termination it might step-down to 25%; two years later, 15%, two years later, it might thereafter remain at 5% or expire altogether.

This compromise term is especially appropriate in those instances when an agent may be taking on an illustrator who already has a significant body of business, but the pre-existing licenses are not necessarily excluded from the Agency Agreement.  Perhaps the illustrator is looking to have the agent review license terms when they come up for renewal and/or renegotiate them when possible.  I have also negotiated inclusion of a step-down rate where the illustrator’s reputation is already ‘made’ as it were, and prospective licensees are calling her for rights.  The agent need not shop her works so much as make the best deals possible.  Then again, you might ask for it with any prospective agent.  If they want to represent you badly enough in the short term, you might save yourself some significant commission fees over time by insisting on a Step-down commission rate post–term!

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

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.

 

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Bo's bLAWg - Online Licensing Websites (VIDA / ShopVIDA)

 

 MJ Bogatin (“Bo”) of Bogatin, Corman & Gold, is an Arts and Entertainment Attorney in San Francisco.  He is also Co-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!

I've known several artists approached by VIDA.  I'm attaching their Artist Contract and am wondering what you think of its terms?  Montana

Thanks for your question, Montana.  I have had occasion to consider a few different online licensing websites.  Some, like VIDA, promote themselves as a “Manufacturer on Demand.”  I doubt that they themselves are manufacturers.  They are more likely, the “intermediary.”

I can see how an online website licensing would be an attractive business model to entrepreneurs who have relationships with manufacturers (or their US tradeshow representatives).  If the website can sign up lots of artists, it is possible that they can make a lot of money from the sales of products with artists’ designs, whether to the public – or even more likely, to the very artists whose artwork has been licensed.  Many artists just want to see their work featured on products, from placemats to scarves.  If the online licensee can entice the artists themselves to purchase enough of a given product – and the manufactured product prospects are unlimited -- current digital imaging allows the manufacturer to easily change out designs.  Small quantity orders of a few hundred units can be profitable with overseas, non-union manufacturing, with a generous mark-up on the re-sale of such inventory to artists -- and possibly to retailers.

As for the licensor artists, I suspect that this not an unduly expensive way to obtain a decent inventory of select products bearing their designs.  However, I doubt that there are many commercial success stories generated from sales from these websites.  If I am in error on this, I would like to be informed of it!

When I dig into VIDA’s, not only do I find some very objectionable terms, I also find an emphasis on asking the artist to invest in the purchase of models promoting their pending product line, and discounts available for purchasing $300+ of the merchandise.  If every artist who signs up agrees to the marketing photos and a minimum purchase of select products with their very own designs, clearly, the business model has income potential to the purveyors if not the artists!

Upon signing up with VIDA and uploading two illustrations, it is my understanding that artists are asked to become “a featured designer on VIDA with a Curated Collection.”  In conjunction with this invitation there is an ask for money summarized as follows:

To claim your curated collection, you can use one of two private codes listed.  With “Code Curated 25,” the artist is invited to receive one professional lifestyle photo of a model wearing an item from your collection.  Check out with $300+ worth of merchandise in your cart and enter the promo code, “Curated25” at checkout, and 25% will then be taken off your order.  You will also get a curated collection page with one professional lifestyle photo of a model wearing an item from your collection, and at least one of your products product featured on the VIDA Shop All page with professional lifestyle photography.

If you select Code Curated40, you receive three professional lifestyle photos of a model wearing items from your collection.  Check out with $900+ worth of merchandise in your cart and enter the promo code, “Curated40” at checkout, and 40% will then be taken off your order, and you will get a curated collection page with three lifestyle photos of a model wearing items from your collection, and at least one of your products featured on the VIDA Shop All page with professional lifestyle photography.

Again, this is an extremely limited offering since we can only offer curated collection upgrades to a small group of artists. Since we have limited space for curated collections, we are limiting the availability to upgrade your collection until just October 30th, only 4 more days.”

This promotional material is said to be “extremely limited,” but as far as I know, it has been posted indefinitely.

Of critical importance, as always for me, are the terms that are imposed by the website licensee on the artist who clicks “Agree.”  As for the VIDA Agreement, http://studio.shopvida.com/terms-and-conditions , I have a number of concerns about its terms, many of which are wholly objectionable.

With reference to my prior Basic Licensing Terms bLAWg, http://annietroe.blogspot.com/2015/02/bos-blawg-what-should-be-in-art.html , note first that the grant of rights to any images uploaded is immediately “exclusive and perpetual.”  This means that whether or not anything is made of the artist’s imagery, (and there is no guarantee that there will be!), the artist has no further right of use to it for licensing purposes!

Furthermore, the artist gives up any right to object to the way in which her imagery may be used on any given product – by itself or in combination with other imagery -- or the quality of the product itself!

While VIDA requires the artist to provide their photograph and biographical material, there is no obligation on VIDA’s part that it will post or use this information in conjunction with its promotional efforts on behalf of such artist. To the contrary, in an accompanying “Plain English Terms” explanation of the Agreement, VIDA makes clear that artist imagery may be used without a copyright notice or artists brand or logo.  This not only deprives the artist of a key reason for licensing her imagery, but suggests to the public that there is no copyright claimed on the imagery used on the products, and the prospect of unlimited “innocent infringement” with minimal damage claims despite artist’s registered copyright.

A Ten Percent is offered on VIDA’s “Net Sales.”  Revealingly, this 10% is offered as a “sales commission” to the artist rather than a royalty.  By calling it a “sales commission,” clearly VIDA expects the artist to be the seller – not VIDA or retailers to which it is ostensibly marketing the products.

The Net Sales definition includes “discounts” and “bad debts,” neither or which would the artist have any control over.  Too bad if it was Uncle Lenny who failed to pay for those 500 units that he bought wholesale for resale to retailers of his acquaintance(!)   And to make matters even worse, the VIDA Agreement expressly rejects any obligation to verify its listed sales information or an audit, both of which are standard provisions in legitimate licensing deals.

If these particular provisions are not bad enough, VIDA then states that it “reserves the right to change these terms at any time.”  Somehow, I doubt such changes will be for VIDA artists’ benefit!

It is my understanding that there are a number of such online businesses including Society6, RedBubble, Art of Where, Minted and Bucketfeet.  If you have questions about their contract terms, I’d be pleased to comment on those as well.

Disclaimer:  The information contained in this website is not intended and should not be relied upon as legal advice. Because the law is not static, and one situation will differ from the next, the results will differ as well, thus we do not assume responsibility for any actions taken based on any information contained herein. Also, be aware that the laws vary from state to state. Therefore, this website cannot replace the advice of an experienced attorney who practices within the jurisdiction involved in your issue or dispute. 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.

 

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Bo's bLAWg - Change in DMCA Designated Agents & Takedown Notices

December 1, 2016 Registration Process change 

MJ Bogatin (“Bo”) of Bogatin, Corman & Gold, is an Arts and Entertainment Attorney in San Francisco.  He is also Co-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!

If you run a web page that allows posting of any user-generated content (even comments), it is very important that you have a DMCA Agent designated to handle takedown notice requests and disputes so you are protected under the DMCA safe-harbor provisions. Any operator of such a website is deemed a “Service Provider.”  If a Service Provider does not have a registered designated agent and material is posted by one of your Users that infringes a third party’s copyright interest or other rights (i.e. a defamatory statement or violation of a third party’s right to privacy or trademark), then you can be personally liable as the publisher of such material!

However, as long as you as the Service Provider does not actively participate in the illegal posting, or make copies, or determine to whom it is to be shared other than by and through ‘passive’ operation of the website or online bulletin board, then the Digital Millennium Copyright Act (“DMCA”) offers the Service provider legal protection from liability, known as “Safe Harbor,” but only if the Service provider has listed a Designated Agent to receive objections and act in a proper manner with respect to removal of improper postings.
(See: https://www.copyright.gov/title17/92chap5.html#512 )

As you may already be aware, YouTube, Instagram, Twitter, and all the major internet Service Providers have posted Terms of Use that include pages that detail how a person who objects to posted content is to notify them.  Perhaps you have had occasion to pursue such a process yourself when one of your copyrighted works was posted by a third party without your permission.  The removal request process involves sending what is called a “Takedown Notice.”  The specific content of the Takedown Notice is set out in online procedures such as this YouTube page: https://support.google.com/youtube/answer/6005900?hl=en

However, most website operators are not large enough to have fulltime staff to handle takedown notices.  In the absence of specific Takedown Notice procedures, the DMCA sets up a process whereby the website proprietors can register their agent with the US Copyright Office to be contacted for this purpose.  Simply by designating the agent and making sure the agent acts reasonably and responsibly upon receipt of complaints and/or a Takedown Notice, insures that the website owner Service Provider will not be held liable as a publisher of the illegal or offensive content.

Since 1998, Service Providers have submitted paper designations to the Copyright Office, which the Office then scanned and posted on the Office’s website to make them available to the public. Modernizing this practice, the Office has created a new, fully-electronic online system through which Service Providers can more efficiently submit and update, and the public can more easily search for and find, Designated Agent information. The amended rules govern Service Provider use of the new system and update what is required of Service Providers to remain compliant with 17 USC 512(c)(2) for Safe Harbor purposes.

On Dec. 1, 2016, the U.S. Copyright Office launched its new electronic system to designate and search for agents to receive notifications of claimed infringement.  Going forward, all new DMCA takedown notice agent designations must now be made through the online registration system. Additionally, any service provider that has previously designated an agent with the Copyright Office through the old paper-based system will have until December 31, 2017, to submit a new designation electronically through the new system. Until that time, an accurate designation in the old paper-generated directory will continue to satisfy the service provider’s obligations under 17 USC 512(c)(2).

You can access the new system at: https://www.copyright.gov/dmca-directory/

These DMCA filings will expire every three years, so they will need to be renewed.  The Copyright Office’s new system is supposed to send out email reminders.  We’ll see about that(!)
Filing fees are significantly lower than they were previously:  now $6 per entity.  All alternative names that the public would be likely to use to search for the Service Provider’s Designated Agent must be provided.  There is no limit to the number of alternative names, URLs, service names, software names, and other commonly used names that can be listed on a Service Provider’s filing for this fee.  However, separate legal entities must file separately and are not considered alternative names.

The Designated Agent does not have to be a natural (living) person. Service Providers now have the option to designate a specific person (e.g., Jane Doe), specific position or title of an individual (e.g., Copyright Manager), a department within the Service Provider’s organization or even a third-party entity (e.g., ACME Takedown Service) retained to handle Takedown Notices.

The Designated Agent’s physical mail address, telephone number and email address must be provided to the Copyright Office, and a Designated Agent may now provide a post office box to be displayed as its physical address. However, in a nod to technological obsolescence, a fax number is no longer required.

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
© 2016 MJ Bogatin

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.

 

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Bo's bLAWg - Product Liability Insurance: What you should know

MJ Bogatin (“Bo”) of Bogatin, Corman & Gold, is an Arts and Entertainment Attorney in San Francisco.  He is also Co-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!

What is product liability insurance and do I need it?  Thanx.  Liz

Thanks for your question, Liz.  Way back in my first Illustrators’ bLAWg, I addressed critical issues in a manufacturing license.  Product Liability Insurance was one of the more esoteric issues that I did not mention in that bLAWg. http://annietroe.blogspot.com/2015/02/bos-blawg-what-should-be-in-art.html

Product liability insurance is protection against claims of injury associated with a manufactured product.  It is usually purchased by the manufacturer to cover claims that someone has suffered damages on account of some dangerous condition or flaw in the product that has caused injury in the course of use of the item.  The short answer to your question, Liz, is “No, you do not need to obtain product liability insurance for yourself unless You are manufacturing products.”
Nowadays, more and more artists are arranging for manufacture of their own product lines and offering them wholesale or retail.  To the extent that an artist is putting herself in the vertical line of sales, it would certainly be prudent to have product liability insurance coverage.  Ideally, however, this is not something the artist should have to purchase for herself, but coverage she could obtain by and through the manufacturer.  Because product liability insurance is a normal business expense of all manufacturers, it is fairly standard for people who make individual contributions to the product being manufactured have the manufacturer make them an “Additional Insured” to the manufacturer’s policy.  However, if the manufacturing has taken place in China or some country where the artist cannot rely on Additional Insured coverage to be provided by such manufacturer,  (or an intermediary “packager” or distributor), then she may do well to obtain her own coverage if the product involved carries any risk of consumer injury.

While it is hard to imagine how an illustrator who licenses an image for use in a given product might ever be personally liable for a product liability claim, it is not unheard of for the illustrator to be named in a product liability complaint.  Since product liability insurance includes legal defense representation, being an Additional Insured on the manufacturer’s coverage is an important consideration.  The manufacturer can most likely have contributors like an artist added without charge, but having the coverage name you are the artist can be invaluable.
Obviously, the artist would not typically be legally responsible for the harm done by the product.  Because a mug with your illustration was poorly made and had a tendency to shatter and cause injury, the artist would not be found liable even if they were sued.  The only situation in which an artist client of mine has had to defend, is when a Chinese-manufactured puzzle had been printed with ink that turned out to be the cause of a child’s illness.  She had nothing to do with the choice of ink used on the puzzle, and was in short order dismissed from the action by the manufacturer’s insurance defense lawyers.  But being named as an Additional Insured gave her a right to rely upon the coverage, without first having to claim against the manufacturer to defend and indemnify her.  Were that tender not accepted, in the absence of the coverage, the artist might be out-of-pocket to defend, even if they were not liable for the claimant’s damages.

But what if it was the artist who had arranged for the Chinese-publication on behalf of the manufacturer?  The product liability coverage could be a financial ‘life-saver.’  The lessons learned were:  have product liability coverage in place just in case, and don’t let your child eat puzzle pieces. 

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© 2016 mjbogatin

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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.

 

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Bo's bLAWg - Copyright Small Claims Court

  

MJ Bogatin (“Bo”) of Bogatin, Corman & Gold, is an Arts and Entertainment Attorney in San Francisco.  He is also Co-President of California Lawyers for the Arts. www.calawyersforthearts.org www.calawyersforthearts.org Bo is available to answer some of your questions surrounding the business of Art Licensing. - THANKS BO!

Dear Readers,
Since July I have had a number of inquiries on my opinion of the proposal that the Copyright Office set up Small Claims Court. I’ve been mulling it over.  Here are my thoughts:

Background:
On July 14th, Rep. Hakeem Jeffries of New York introduced to the United States House of Representatives a bill, known as the Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2016.  https://assets.documentcloud.org/documents/2993945/CASE-Act-Jeffries.pdf

CASE is for the most part based on a Copyright Office Report released in 2013 speaking to the question of whether or not such a forum would be in the public’s best interest.  There is certainly good reason to consider the prospect.  Under the existing Copyright Act, the only forum for infringement claims, large or small, is Federal Court.  This is truly a situation where a wronged party whose original work has been copied, plagiarized or distributed without their permission has no choice but to “make a Federal case of it,” unless the matter can be resolved informally.  CASE would set up an alternative forum intended to be more accessible and efficient than your local Federal District Court.   Would it be?  That is yet to be seen.

In my practice, I have had no real problem resolving infringement claims on behalf of my plaintiff clients and avoiding drawn out litigation.  The reason for this is that my clients have been advised to register their copyrights within three months of first publication.  Having done so, I can leverage the two key benefits of registration into quick and (usually) substantial settlements. 

As mentioned in previous January 2015 bLAWg, registration benefits include the right to claim statutory damages of up to $150,000 and obtain prevailing party attorneys’ fees and costs against the infringing party – instead of being limited to “actual damages (the infringer’s profits if any), and being out-of-pocket for attorneys’ fees and cast.  http://annietroe.blogspot.com/2015/01/bos-blawg.html 

Even the most obstinate infringer will capitulate when their own attorney tells them they will have put up a large retainer to defend the claim and, when they lose, they will also have to pay my substantial fees.  When faced with this reality, I rarely have to file an action.  When I have to file, as soon as the defendant looks to retain counsel, I get a decent settlement offer.

However, I also get calls quite often from prospective clients whose works have been infringed, but who have not previously registered their copyright.  If the infringer does not have ‘deep pockets’ (assets) and there is no viable ‘downstream’ wholesale distributor or retailer with substantial profits from the infringement, it is clear that despite being harmed, such claimants have no viable remedy.  That is where I can see a Copyright Small Claims Court play an important role.

CASE describes the establishment of a reasonably well-conceived Copyright Claims Board with qualified copyright attorneys serving as “Claims Officers” empowered to hear infringement matters.  They would assure parties proper use of procedural due process, oversee basic discovery, conduct hearings and issue findings that would be published, and subject to filing as Judgments in the District Courts for collection purposes.  Unlike most State Small Claims Courts, parties can use attorneys or certified law student counsel.  All well and good.

Like the 1976 Act, claimants would be entitled to elect either Actual Damages (including the infringing parties’ profits), or Statutory Damages.  However, statutory damages would be capped at $15,000 instead of $150,000 – but only in the event of a registration prior to infringement (or within three months of original publication). In the absence of such registration, the statutory damages limit would be $7,500.

Since it is easy to leverage settlements with pre-existing registrations, it is hard for me to imagine anyone electing to pursue the Small Claims alternative unless they did not have a registration before the infringement.  In that regard, and given the prevalence of infringements where there are little or no actual damages or profits, the $7,500 statutory damage prospect would be a keen advantage – one that may pave the way for settlement early in the Small Claims process if the Defendant is at risk of that.

HOWEVER, what I believe to be the fatal flaw in the CASE legislation, is that participation by the parties is voluntary. (See Section 1403(a).)  The defendant may “opt out!”  (See 1405(h).)  Facing a potential statutory liability of $7,500, why wouldn’t they opt out knowing that the Claimant will be out-of-pocket to bring an action in Federal Court, and no statutory damages are available.

Nor is the Copyright Claims Board empowered to grant injunctions against ongoing infringements.  That limitation in itself would rule out Small Claims as a reasonable forum for many situations where what is critical is not present damage, but the long-term damage if the infringing activity is not stopped immediately.

While I can understand the basis for not affording the Copyright Claims Board the authority to consider and grant injunctive relief, until the opt out provision is fixed, I fear that the CASE court will end up being the forum that is used by ‘copyright trolls.’  There are many entities that search the internet for copied illustrations, photographs, music and/or film clips and make unreasonable demand$ upon the website owners who have innocently or mistakenly allowed uploading of infringing material. 

Taking down the offending image or material is not enough for these outfits.  Once they have identified what they believe to be an unlicensed use, they continue to send demand letters and threaten legal action.  Rarely, however, do the actual copyright holders take the initiative to go after such infringing use if the offending item has been removed from the website.  In the case of ‘innocent’ infringement, it is likely the damages awarded in Federal Court will be as low as $200.  Nor will the Court necessarily award them prevailing party fees since the damage was minimal and the defendant complied promptly with the ‘cease and desist’ letter.

I know a number of artist organizations are supporting the legislation.  The Graphic Artists Guild appears to endorse the supporting efforts of the Coalition of Artists which includes the American Photographic Artists (APA), American Society of Media Photographers (ASMP), Digital Media Licensing Association (DMLA), National Press Photographers Association (NPPA), North American Nature Photography Association (NANPA) and Professional Photographers of America (PPA).  https://graphicartistsguild.org/news/copyright-claims-board

Perhaps they do not share my concern over potential misuse of the Small Claims Courts or that their members will not be able to make meaningful use of it due to the Opt Out provision.  Or, perhaps they are pursuing changes in the CASE provisions to address those matters.  If you are a member, I recommend that you share your own view with them.

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

 

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.

 

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Bo's bLAWg - The Copyright Term Follow Up

 

MJ Bogatin (“Bo”) of Bogatin, Corman & Gold, is an Arts and Entertainment Attorney in San Francisco.  He is also Co-President of California Lawyers for the Arts. www.calawyersforthearts.org www.calawyersforthearts.org Bo is available to answer some of your questions surrounding the business of Art Licensing. - THANKS BO!

 

Dear Bo, in last month’s bLAWg you indicated that works published before 1923 are in the Public Domain.  Does that mean that as of January, works published before 1924 will be in the Public Domain? Rick

That would seem to be logical, Rick, but that is not presently the case. 1923 will remain the cut-off date for automatic Public Domain for two more years under the Copyright Act.

Under the 1909 Copyright Act, the copyright term was 28 years with the right to be renewed for a second 28 year term.  Under the 1976 Copyright Act, the one that set the ‘new’ ‘life of the Author plus 50 year term,’ came into effect January 1, 1978.  As of Jan. 1978, the ‘oldest’ copyrights that could still be in their second renewal term under the 1909 Act must have been registered in the first instance in 1923 or later.  For example:  A work that was first copyrighted on January 1, 1923, and renewed between January 1, 1950, and January 1, 1951, would formerly have fallen into the public domain as of January 2, 1979.

Last month I mentioned Sonny Bono Copyright Term Extension Act (CTEA) of 1998.  Besides extending the existing copyright term from 50 years after the Author’s death to 70 years, a provision of the CTEA extended the duration of copyrights in their renewal term at the time of the effective date of this Act to 95 years from the date such copyrights were originally secured.
https://www.congress.gov/bill/105th-congress/senate-bill/505

Since the ‘oldest’ renewal registrations under the 1976 Act were from 1923, the CTEA extended those copyright terms to a maximum of 95 years, through 2018.

Accordingly, no new works will fall into the public domain until 2019, when works published in 1923 will finally be deemed to have expired. THEN Rick, you will get the ‘rolling’ year-by-year expansion of Public Domain.  In 2020, works published in 1924 will expire; in 2021 all works published before 1925 will have to have expired, and so on.  That is, unless the Copyright Act is amended again to alter these expectations!

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

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.

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Bo's bLAWg - The Copyright Term

 

MJ Bogatin (“Bo”) of Bogatin, Corman & Gold, is an Arts and Entertainment Attorney in San Francisco.  He is also Co-President of California Lawyers for the Arts. www.calawyersforthearts.org www.calawyersforthearts.org Bo is available to answer some of your questions surrounding the business of Art Licensing. - THANKS BO!

 

Bo, several of your bLAWgs have mentioned that once a copyright term has expired, the works are then in the Public Domain.  Are my mother’s illustrations from the 1940s still subject to copyright so I can license them as copyrighted works, or are they in the Public Domain? 
Thank you!  Janet

Good question, Janet!  It gives me the opportunity to provide more particulars regarding the extension of copyright terms under the 1909 Act – applicable as to artworks published before 1978, as allowed by the 1976 Act.

The Copyright Act has been amended several times since the first was passed by Congress.  I think the original term under the first US Copyright Act from 1790, copied from Great Britain’s,  was for only 14 years, plus a renewable 14-year term!  Then again. people did not live as long in those days, did they?  As of 1900, the Term was extended to 28 years plus an additional 28-year renewal right.

That Term remained in effect until the “new” Copyright Act of 1976 came into effect Jan. 1, 1978.  The Term was extended under the 1976 Act to conform with those of many other countries:  The lifespan of the Author plus 50 years.  The 1976 Act also addressed with particularity how the Terms for works copyrighted under the 1909 Act would be treated under the new Act. 

The question of whether your mother’s 1970 artworks are still copyrighted depends upon whether or not they were ever published.  If they were published with a copyright notice as required under the 1909 Act, the Term became 95 years from date of publication.  (If the copyright had been renewed, 67-year renewal term is deemed added to the initial 28-year term.) 
If the original copyrights were not renewed by your mother or her heirs, her published works from the 1940s would be in the public domain.

So, if my calculations are right, if all of your mother’s works were published for the first time in 1940 with a copyright notice, her copyright on those illustrations will not expire until 2035.

If your mother’s illustrations were never published, those works are entitled to a Term of copyright protection through the 70th calendar year after her death, whenever that may occur.

In 1998, just as the Term of Walt Disney’s copyrights on its Mickey Mouse character were about to expire, Congress passed the Copyright Term Extension Act (CTEA) sponsored by Congressman Sonny Bono, better known as “Cher’s first husband.”  This Act amended the Copyright term to the life of the Author plus 70 years instead of 50.  For Disney and other works created by corporate entities or under “work made for hire” agreements the Term was extended to 120 years after creation or 95 years after publication, whichever endpoint is earlier.  For the time being, Mickey was saved from ignominious treatment in the Public Domain! 

The effect of CTEA was to "freeze" the advancement date of the Public Domain in the US for works covered by the older fixed term copyright rules. Under CTEA, works made in 1923 or afterwards that were still protected by copyright in 1998 will not enter the public domain until 2019 or afterward (depending on the date of the publication).  For works created by authors who died in 1932 or earlier, that day was January 1, 2003. 

However, as mentioned last month, any artwork published before 1923 was deemed to be in the Public Domain.  Anyone can use such works here in the US for any purpose, without any license or permission.

Since I want my bLAWgs to be super helpful, here is a chart that spells out the different operative Copyright terms: 

If you have a special case that needs to be analyzed, let me know.  We’ll see if we can figure out whether or not that work is still subject to copyright protection or in the Public Domain.

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

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.

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Bo's bLAWg - Copyright and Derivative Use Rights

 

MJ Bogatin (“Bo”) of Bogatin, Corman & Gold, is an Arts and Entertainment Attorney in San Francisco.  He is also Co-President of California Lawyers for the Arts. www.calawyersforthearts.org www.calawyersforthearts.org Bo is available to answer some of your questions surrounding the business of Art Licensing. - THANKS BO!

 

Bo, can I license well known art works that I have morphed kaleidoscopically?

There is a short and long answer to this question.  The short answer is that if the artworks that you are using are in the public domain (“PD”), you can.  If they are not in the PD, you cannot without a license.

The long answer is that the issue raised is one that pertains to the fundamentals of copyright law, but at the same time has become a cutting edge issue. The fundamental right is that the Author of an original work of visual art is presumed to be the copyright holder with exclusive, theoretically inviolate, rights.  The cutting edge issue is the extent to which a second artist can so fundamentally change the original copyrighted work that it is literally and legally “transformed,” and therefore not deemed to infringe!

Exclusive Interest:

The copyright holder has the exclusive interest in the following basic rights:

1.  To reproduce the work in copies or phonorecords;
2.  To prepare derivative works based upon the work;
3.  To distribute copies or phonorecords of the work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
4.  To perform the work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works;
5.  To display the copyrighted work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work; and
6.  In the case of sound recordings, to perform the work publicly by means of a digital audio transmission.
(See 17 USC 106:   http://www.copyright.gov/title17/92chap1.html#102 )

The two of these that apply particularly to visual Art are numbers 2 and 5.  In addition, Artist/Authors of works of visual fine art have the rights of attribution and integrity as described in section 106A of the Copyright Act.

A “derivative work” is defined in Section 101 as: “A work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications, which, as a whole, represent an original work of authorship, is a ‘derivative work’.”  (emphasis added)
(See http://www.copyright.gov/title17/92chap1.html#102 )

Clearly, your “kaleidoscopic” treatment of a copyrighted artwork would be derivative as a “transformation” of the original, a right that typically must be obtained from the copyright holder if you intend to license to third parties.

However, there are exceptions to this exclusive right.  The first, referenced above, is that the artwork you are altering is in the PD.  While you can presently adapt or transform any artwork published before 1923 and legally license it for use here in the US, use of the same adapted artwork in other countries will be subject to the copyright laws of that country – which could protect works created and/or published before 1923.

The second exception depends upon whether or not your derivative use “is so transformative” as to constitute a Fair Use.  I discussed Fair Use at length in my bLAWg this past March. 
See:  http://annietroe.blogspot.com/2016/03/bos-blawg-use-of-quotes-and-song-lyrics.html

The essence of Fair Use boils down to whether or not the derivative use is a free speech right under the First Amendment to the US Constitution. If the copyrighted work is being “copied” in conjunction with news and reporting about it or its author, or as part of a critical review, these uses are fundamentally “speech-based” and the copyright work may be used for these purposes as long as the amount of use does not significantly damage the market for the original work.

This is the essence of the first of the four Fair Use factor:  “The purpose and character of the use.”  The US Supreme Court in recent years has begun to expand upon the traditional ‘news and critical comment’ purpose to apply Fair Use due to the extent that the second work is “transformative” of the copyrighted original.  The seminal case was Campbell v. Acuff-Rose Music, Inc. (1994), in which the Court deemed 2 Live Crew’s rap using a few lyrics and some music from the Roy Orbison song, “Pretty Woman” to be parody.  Even under a traditional Free Speech analysis, this makes sense.  Parody is a form of speech.  Since you need to use the original work to make fun of it, the use has been deemed Fair. Obviously, the 2 Live Crew recording did not damage the market for the Orbison original.

Since 2 Live Crew, there have been other cases expanding upon the scope of transformative use so that it can be applied to visual art as well as music.  The purpose of the transformation no longer is limited to “parody.”  The Court now examine whether or not the derivative work  “merely supersedes the objects of the original creation…or instead adds something new, with a further purpose or different character.”  (Campbell)   A work can be deemed transformative “if it adds value to the original; basically uses the original as a raw material which is then transformed “in the creation of new information, new aesthetics, new insights and understandings.”  (Castle Rock)   When considering whether a work is transformative, the courts are now evaluating factors such as changes in aesthetics and meaning.  (Cariou v. Prince).

Clearly, there is a legal argument to be made that your kaleidoscopic treatment of these copyrighted works is sufficiently transformative as to be deemed Fair Use.  However, this in no way prevents you from being sued for copyright infringement.  Fair Use is only a legal defense, not a bar to an infringement action.  And, because each Fair Use case has to be considered upon its own merits, there is a good chance that you will not learn whether or not you are entitled to use the copyrighted work in this fashion or if it will be deemed an illegal infringement  until the case is tried in court.  And then the decision of the trial court is subject to appeal!  Is this a risk you can afford?

I should also mention that a ‘creative’ litigation attorney could also make a Right of Publicity claim against you if you use the name of the artist of the underlying work in the promotion of your own transformative artworks.  As discussed at length in my bLAWg from this past February, the essence of the Right of Publicity is that under these state statutes, a person who knowingly uses the name or image of a person for commercial purposes without their permission is liable to that party. (See http://annietroe.blogspot.com/2016/02/bos-blawg-right-of-publicity.html )

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

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.

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Bo's bLAWg - Licensing Agents

 

MJ Bogatin (“Bo”) of Bogatin, Corman & Gold, is an Arts and Entertainment Attorney in San Francisco.  He is also Co-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!

 

Recently I was asked to sign a non-compete for an image broker who wanted to help me license my work. Is it standard to ask for this sort of exclusive? In what scenario would a non-compete be necessary? Thank you, in advance, for your guidance!

The short answer is that people in business as ‘image brokers” or professionally as Licensing Agents may reasonably expect to represent the Artist exclusively.  Whether or not the exclusive representation will apply to specific illustrations or specific goods is subject to negotiation.  However, once the scope of exclusivity is mutually agreed upon, it would reasonably be expected that the Artist would not compete with the Agent of licensing opportunities within that scope.

I should mention, there is a legal difference between licensing exclusively through an Agent, and giving an Agent an exclusive right to license your works.  With the former the Agent would expect that the Artist would use the Agent for all licensing deals.  The Artist would be expected to accept a non-compete provision in the Representation Agreement.  The Agent does not want her pursuing licensing opportunities that might interfere with the Agent’s own efforts.

Sometimes, it is possible for an Artist to obtain express permission from her exclusive Agent to pursue a lead or contact a person with a given company whose name has been given to her for possible interest in her work.  However, I would recommend that it is simply good professional manners to get the express permission of the Agent before she does make such a call.  To pursue such a lead without the knowledge of the exclusive Agent could have various negative ramifications.  It may be that the Agent has a planned pitch meeting with the same company, or knows who really has the power to license at that entity.  To pursue such a lead without the intent to pay the Agent her expected commission would be directly adverse to the Agent’s interest in representing the Artist in the first place.

Taking your own initiative to pursue licensing can also ‘muddy the water’ as to whether the Artist is or is not represented by a given Agent, this damaging the reputations of one or both.

However, the main reason I suspect that an Agent would not want her represented Artist to pursue such leads with or without her permission, even if the Artist were prepared to pay her Agent’s commission anyway, is that such initiatives undermine the Artist’s interests as well.  It is the Agent’s job to know what the particular company is looking for by way of new imagery.  S/he should know what trends are hot and which of her clients’ illustrations might best fill the needs of  one or another company given the strengths (and weaknesses) of their existing product lines.  S/he has likely spent years building up a professional relationship with that company that she expects to lead to greater confidence in her recommendations to those clients.  

Were the Artist to pursue her own licensing with such a company, she may very well undercut or destroy the Agent’s business plan to sell that Artist’s line with a more profitable competing company and at better royalty rates than the Artist might be willing to settle for! 

Even where an Agent is the Artist’s exclusive representative only for a particular line of illustrations or for a specific limited line of Licensed Products (i.e. greeting cards and paper products as distinguished from magnets, plastics and fabrics), the Artist can cause an Agent havoc by pursuing the same corporate Licensees for their interest in a different group of her illustrations or for use of her illustrations in ‘other’ product lines also handled by the company. 

Just last week I had a client call who had been ‘balled out’ by her Agent who took exception to her independent efforts to license her imagery for product lines not handled by the Agent.  It was clear to me that per her Agency contract, she had a legal right to pursue personally such licensing opportunities, but I could well understand the Agent’s resentment.  How was he supposed to pitch her illustrations as fresh, new and particularly appropriate to this regular company client of his, if his own Artist has already pitched them for other products.  It was very clear that the Agent would sooner pitch another Artist’s imagery than risk that scenario.

Accordingly, it is simply good business politics to be clear on the front end of an Agency relationship what if any independent marketing the Artist can look to do on her own behalf  -- if any.  One solution is for the parties to give each other a list of prospective licensees they would like to pitch, and for what illustrations and product lines, and determine if it is in the best interest of the Artist to make any such marketing forays on her own account.  If it is, she should not do anything to undercut her Agent’s expectations as to Licensee royalty rates payable, and may offer to pay the Agent a discounted commission on Licenses she obtains – at least from company clients of the Agent if not from others.

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

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.

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