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.

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Agent Spotlight - Donna Westman, DSW Licensing, LLC.

 

 click images to view larger


How long have you been in business and how did you come to be an agent? 
Next year I will celebrate my 15th year in the art licensing field. In 2002 I was approached by an artist to partner with her to market her illustrations to acquire licensing deals with manufacturers. At that time I had limited knowledge of what art licensing was, however I did know an extensive amount about sales and marketing. My career for 15 years prior to meeting her was with a motivational speaker and writer helping build that business into a successful, lucrative career. The same skills that I learned in that business, I have applied to running DSW Licensing. Since that initial meeting in 2002 with the one artist, I have grown my business to include five highly talented, experienced artists that I am proud to partner with.  

Who are the manufacturers you work with - how did you establish those relationships?  How do you market artists?
I have partnered with over 85 different manufacturers of every imaginable product in the marketplace. With a collaborative effort between our agency, the artist and the manufacturer, strong partnerships have been developed over a wide spectrum of reputable companies within the home décor, paper products and giftware industries. One of the most exciting things about this business is to walk into a store and see DSW licensed products on the shelves and selling! It puts a smile on my face to see our flags displayed at Lowes, paper tableware at the local grocery store, or spot our wall décor and pillows at Target! We have had products in mass retailers as well as smaller, independent retail stores throughout the country.

Establishing these partnerships with manufacturers has been accomplished in various ways, but mainly through good old fashioned hard work and constant, consistent marketing and follow-through! I have exhibited at both Surtex and the Licensing Show, which have been beneficial, however I have found that it’s the daily work in my office of continual contact and communication through emails, my quarterly DSW E-News, utilizing social media (Facebook, Instagram, Linked-In, Twitter), and picking up the phone to talk to a client to hear what their needs are. (You can get a lot of information just by listening!)  And, a prompt response time when a request comes in, is always appreciated by clients.

 I also have attended for the past 15 years trade shows annually including the America’s Mart, Dallas Trade Show, Las Vegas Market, San Francisco Gift Show and the New York Stationery Show meeting one-on-one with clients at these shows as well as at their company headquarters. I have established terrific relationships over the years with some of the top manufacturers in this industry and am always looking for companies to align with. There are always new companies to research and present my artists designs to and very important that I stay on top of whom is the correct person to be sending the art to, as company contacts change often.

Do you have employees? 
I am a one woman show!  However, since I work so closely with the artists that I represent, they are, in some ways, considered my business partners. I think what differentiates my company from many other art agencies is that I keep the number of artists that I represent to a select smaller number, where many agents have a long roster of artists. I am very familiar with my artists’ portfolios because I work alongside each of them on an intimate basis. Knowing their portfolios’ enables me to curate and tailor proposals to manufacturers. And, what I have found is companies prefer to be sent artwork that is tailored to their specific needs and product formats, and not just a laundry list of images that they then have to weed through. They don’t have the time to do this, it is up to me as an agent to listen to their needs and then send a tailored, targeted submission. 

What do you look for in an Artist? 
There are several things I look for in an artist, but mainly art that is licensable!  I receive on a weekly basis submissions from artists and designers that are eager to get their designs licensed.  The vast majority are not images that I would present to my clients.  The art may be great for galleries or advertising campaigns, but not art that can be applied to a variety of product formats.  I always tell an artist to actually go walk retail stores and look at what is on the shelves. Buyers are very rarely looking for the neon unicorn on a plate. But, most likely you’ll see a more traditional Santa, beautiful floral, or fun and trendy word art. I also prefer an artist that has a wide portfolio to pull from, with all seasons. I license a lot of seasonal artwork, including, spring holidays, and fall holidays, especially the two big selling holidays, Harvest/Halloween and Christmas. I also partner with artists that are flexible and understand that the buyers make the final decision on the art. Buyers and creative directors are looking for what their customers’ needs are and what sells. It’s all about making the numbers work for manufacturers and it’s about what we can do to help them accomplish that! My artists are always “in the loop” on what requests I am receiving from potential licensees and art trends that they are looking for in their next product release. Many times my artists have taken these art “call-outs” and created new art collections based on the client’s specific requests. As a result, we have had quite a lot of success with securing licensing deals because of the time put in to listen and review what their needs are and create art accordingly.   I also look for artists that understand how to work in Photoshop, or some similar software so their designs can be applied to multiple product formats, and completed in an expeditious manner. The industry works on a quick turnaround these days, so having these necessary computer skills is critical for success.   

I also look for integrity and mutual respect when partnering with artists. It’s a close working relationship between me and the artists, and so these two qualities are important. My company statement is “At DSW Licensing you will find the distinctive art you need to have a successful product line, and at the same time, make each project an enjoyable experience with the highest level of excellence and integrity.” The five artists that I currently represent, I have worked with for many years.  I am grateful that I have such fabulous artists that are on my team.

How much work do you expect an artist to create?  
As I tell my artists, the more new art collections you send me, the more opportunities you have to get licensing deals! Of course, I would love to receive a new collection every week from my talented team, however that is the ideal. Some are more prolific than others, and some art requires more detail than others, therefore I may not receive as much from them. With that being said, if I find that I am not receiving new art on a pretty consistent basis, than I may need to look for a new artist to fill that void. Artists that are serious about this business know how important it is to stay on top of the trends and create new art on a regular basis. Otherwise, it’s just a hobby, not a business. 

Any great news you would like to share? 
I am pleased that we have had one of the best years in art licensing this past year.   I had many new manufacturers come on board, as well as licensees that we have worked with for many years expand their collections with new products. One of my artists has had her beautiful Christmas collection expanded by Demdaco after a very successful launch of her initial collection last January. It is rewarding to have a company do so well with their sales figures that they come to you to add more product sku’s for a future collection.        

How has the Art Licensing business changed over the years?
So much has changed and evolved in the art licensing industry! I would say the most significant changes are due to the digital age. My arms are not as in shape as they used to be since I don’t have to cart around 15 pounds of binders at shows! Now I present art from a SURFACE or iPad. When I began this career, all the art was printed out, put into folders with cover letters, post cards used as marketing tools, contracts were all mailed. Today it is predominantly digital marketing, including art submissions, email introductions, and E-contracts. And, there are all the Internet marketing tools such as websites, Facebook, Instagram, and YouTube. It’s completely transformed how I do business. One question that I get asked often is why I don’t have all of the artist’s designs on my DSW Licensing website. I only keep a small sampling from each artist to showcase their style and various themes.   We prefer not to put their entire portfolio online for a couple reasons. One, I prefer to hear from clients so I can tailor the art specifically for their product formats. And, secondly, unfortunately, we have found that there are online “opportunists” that may copy or infringe on the copyrights of artists therefore, I find it is best that I send out the artwork.

Any advice or information you would like to share?
This is a very unique business and takes a lot of the 3 P’s- patience, persistence, and perseverance.    There have been some companies that I have marketed to for ten years that I finally ink a contract with because I didn’t give up and kept consistently communicating with them. Sometimes the timing may not have been right, or the art just wasn’t what they were looking for during that season. The slogan that patience pays off, well, in this industry, that rings true! Not only can it take a long time to finally get the license agreement, but then there is the long process from the time I send a contract to when we will actually see any revenue, unless an advance was negotiated.  In between that is pre-production, sampling, getting to the market, shipping, and then you’ll see returns on the royalty reports.  This timeframe can be anywhere from 1-2 years. As in any business, there are days when you may feel discouraged, but I always try to focus on the successes and opportunities in this business.  All industry’s have their ups and downs. You just have to keep your head up and the art flowing! I like to think that the work we do is putting a smile on someone’s face as they enjoy one of our licensed products in their home.   

You can find DSW
Company website: www.dswlicensing.com

Connect with DSW through:
https://www.facebook.com/dswartists

Instagram:
@dswlicensing or @donnawestman

Linkedin:
Donna Westman

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A bit about "2nd Thursdays" chat group on ArtLicensingShow.com

Hi Everyone!

Quick post about my "2nd Thursdays" group on ArtLicensingShow.com. We meet the 2nd Thursday of each month in a text chat room. 6:30 PM US Central Time (Chicago). Everyone is welcome who is interested in any aspect of the Art Licensing business. You do need to be a paid member of ArtLicensingShow.com to get access to the group. You can sign up for ArtLicensingShow.com for free if you want to look around and see what it is like & get a free business directory listing.

If you are already a paid member of ArtLicensingShow.com - I send out invitations to the "2nd Thursdays" group to everyone. If there is a glitch, just request to join :-D.

We usually keep the format open so that we can put our heads together. Cherish, Founder/CEO of ArtLicensingShow.com attends almost all of the chats. She updates us on any new features on the site, exciting news and answers any questions you may have. The group came up with the very successful holiday coloring book idea https://artlicensingshow.com/holiday-coloring-book/, I believe it has had 6,000+ downloads. Recently we had Susan January, VP Leaning Tree, answer all of our questions around the greeting card industry. https://artlicensingshow.com/2nd-thursdays-special-guest-susan-january-of-leanin-tree-chats-about-greeting-cards/.

Join us! we try to keep it to an hour long - always some great ideas and topics on everyone's minds.

Really looking forward to chatting with all of you!

Chat with Leanin' Tree - Susan January

Hi Everyone!

Quick post letting you know Susan January, VP of Product Management with Leanin' Tree will be at the next "2nd Thursday" text chat. This is open to anyone interested in Art Licensing: Manufacturers, Art Directors, Retailers, Agents, and Artists :-D . 6:30 pm CST USA/Chicago time.

http://www.worldtimebuddy.com/

This is for any paid member on ArtLicensingShow.com.

QUESTIONS that you all sent in for this Thursday's Chat:

1. What is the best way to submit to you? And how often do you want to see new art? Do you want the art mocked up as a card?
   
2. Does the artist  need to come up with the copy/text for a greeting card along with the art?

3. What makes up a best selling greeting card.

4. What is Leanin’ Tree’s best selling cards (sympathy, Christmas…)?

5. When looking for new greeting cards to manufacturer - what stands out to you?

6. How can an artist best support Leanin’ Tree?

7. The greeting card industry has changed a lot. If you can, talk about that a bit. Are most of your sales online?

8. What sort of gifts do you manufacture? Do you license art for your gift line?

9. Where does Leanin’ Tree see themselves in 5 years?

From Susan's bio on ArtlicensingShow.com and Leanin' Tree's website:

Susan - I am the current Vice President of Product Management at Leanin' Tree, a greeting card and gift product manufacturer based in Boulder, Colorado. I have more than 25 years of experience in art licensing and greeting card development. I am a former President of the Greeting Card Association, and am still a current member of the Association's Executive Committee. Leanin' Tree currently works with more than 700 artists across our 6,000 product skus, and we add an average of 1500 to 2000 new products annually.

Leanin Tree - Beautifully crafted greeting cards that feature original artwork by outstanding independent artists from across the country and around the world. All our cards are created, produced and shipped from our facility in beautiful Boulder, Colorado. We strongly believe in supporting our community, our neighbors, and our customers. As for the people behind the products, Leanin’ Tree’s heritage and workforce is truly special. Please take a moment to watch our video, "Behind the Scenes at Leanin' Tree". To see how this family-owned, "made-in-America" business has thrived for over half a century, please visit our History and Goals section.

Thank you all for your interest and support - BIG thanks to Susan for stopping me at Surtex and offering to chat with us! 

ArtLicensingShow.com is 1 Year Old! A lot has happened:

Editors note 4/18/2016. Joan Beiriger has a very comprehensive post on ArtLicensingShow.com here

Wow! Can you believe it has been a year since ArtLicensingShow.com (ALSC) launched?! I wanted to wish Cherish Flieder a great BIG Happy Birthday. THANK YOU for such an amazing site.  It has brought me opportunities/manufacturers I didn't know about and sped up my ability to connect with the wonderful art licensing community. Signed a contract to be announced and have another manufacturer shopping my art around to some big stores! This and more has happened for me because of ALSC :-D Here is a link to Valerie Hart talking about the new deals she has found though ALSC: http://artlicensingshow.com/conversation-valerie-hart/

I am one of many Founding Members and couldn't be more pleased or proud of what Cherish and her team have accomplished. This site has grown so fast in community and new features.

Here is a link to my ALSC profile page (Art Directors/Manufacturers, you can join for free!)
http://artlicensingshow.com/members/annietroe/profile/

Here are links to other artists on ALSC that are blogging about the 1 year celebration:

http://www.madelinefaiella.com/art-and-illustration/happy-anniversary-art-licensing-show/
 

http://karenembrydesigns-artblog.blogspot.com/2016/03/art-licensing-show-celebrates-one-year.html


http://www.tracibixby.com/archives/1161


http://shootsandblooms.com/news.html#!/blog/posts/One-Year-Anniversary/13


http://www.noondaydesign.com/#!Happy-1st-Birthday-Art-Licensing-Show/e1cri/56faff3b0cf226b8e685d509


http://abarefootartist.com/2016/03/29/happy-birthday/


http://somethingtocherish.com/art-licensing/celebrating-art-licensing/

 

Check out the Celebration Link Up - Art Party!

http://artlicensingshow.com/celebration-art-link-up/

A year ago I posted why I am on ALSC - It has my yellow VW bug, "Daisy Doodle Bug".  I now have a new 2012 Red VW Bug, "Doug, the Doodle Bug". I have spotted Daisy in one of the mall parking lots the other day - hope she likes her new owner :-)

http://annietroe.blogspot.com/2015/03/why-i-am-on-art-licensing-show-com.html

If you join or are a current member of ALSC, check out my "2nd Thursdays" group. We get together and talk about any questions you may have about the site, and all things Art Licensing :-D
http://artlicensingshow.com/groups/2nd-thursdays/



I am really excited about ArtLicensingShow.com being open 24/7, no airfare or hotel needed to exhibit my art. What do you love about ALSC?  

NOTE! Feel free to leave your blog link in the comments below if you like.
Everyone, be sure to spread the love and check out all the blogs! Thanks.
If you share you own work on social media, use #artlicensingshow

Agent Spotlight - Julie Ager with Artistic Designs Group (ADG)

 

 (click images to view larger)

How long have you been in business and how did you come to be an agent?
I have been in the consumer products goods industry for over 30 years, and the licensing business for just about eight years now.  If you are counting, that obviously means we started this business at the heart of the recession (the WE refers to my partner who is also my mom, Mary Ann Fields).  We have heard repeatedly about the glory days, but we were just a little bit late to the party.  This actually turned out to be a blessing in disguise.  Although I had been in the consumer products industry, this was a new angle for both us, and all of the artists we represented at the time.  So we set out to learn the ropes, make our beginner’s mistakes, understand the process and most importantly build relationships.  We were very thankful for a few wonderful manufacturers that took a chance on our artists right out to the gate. We found a small group of these wonderful folks that stepped up to mentor us and have now grown from that start to hundreds of licenses for our artists and a business that managed to survive the recession.  When you start there, the only way is up and - up is fun!  The art licensing community is a generous group of professionals – the agency reps, the artists and the manufacturers. 

Do you have help/employees?
We have recently grown to five full and part-time employees.  Missy, Jenni, and Kristi are new and work with me on graphic design - preparing files for both presentations and production; account management with our existing partners, and social media supporting our website and reaching out in other areas of social media that will help support our artists visibility and provide information helpful to the art directors that we work with.

How do you establish working relations with the manufacturers and retailers that you work with?
We have a few dozen manufacturers that we work with at any given time and our desire is to meet their needs and continue to build on those efforts.  The key thing we look for in a new project is a product development cycle that will sell significant volume for both the producer and the artist with a reasonable amount of pre-work on everyone’s side.  Most of the manufacturers are respectful of the value of the artist’s time, but we have in the past participated in development cycles that took so much prep time on the artists part that it made it very difficult to make a return on that time.

Do you prefer royalty deals? Flat fee?
Perfect follow-up question.  Overall we prefer royalty deals, however, there is a time and place for flat fee licenses.  Especially if we are dealing with a product line that we know will only be on the shelves for one season.  Either way, it’s critical that the artist maintain the copyrights! 
We are also finding that guaranteed minimums and advances have not met their demise as many had prophesied.  More and more these days this is a way to make sure that the artist is guaranteed a reasonable pay day from a given contract.

A few years ago I was waiting at the elevators unpacking at Surtex and got into a conversation with a couple of artists that sell their artwork.  It was interesting to hear their perspective, they really could not understand why we would license when the end payout was so far in the future and really an unknown to some extent.  I explained that we had a hard time understanding why they would sell their rights outright for what we would see as a very small ROI.  The reason I share this story is that I have found that there are even times when the sale of the design is the right decision, it’s just not our normal way of doing business, however, we have explored it for industries such as fashion apparel where the licensing model isn’t the accepted norm.

How do you market artists? Who pays for this? Anything different for new artists?
We have a variety of marketing strategies from trade show booths at shows such as Surtex and the Licensing Show; walking certain product trades shows such as Americasmart and the other regional gift markets,  or specialty shows such as home and housewares, quilt market, ABC Kids or Toy Expo.  We also meet one on one with both new and existing partners, we advertise in licensing trade magazines such as Total Art Licensing and send out email blasts on a regular basis.
 
In addition, we submit scheduled submissions based on our manufacturers product life cycle calendars and respond to their all calls with appropriate work.  The entire cost for all of our marketing is born by the agency.  The royalty from product sales is then split 50/50 with the artists.

What do you look for in an artist?
There are three things that we value most in an artist – 1) their foundation of talent, 2) their willingness to grow from where they start and always evolve, and 3) their willingness to be a participant in their success beyond just the creation of their art.  This last one might make an artist take a step back – what do you mean participate beyond my artwork, I thought that was your job?  What I mean here is that if I have two talented artists(1) and that are willing to grow (2), the one that is willing to go the extra step (3) is likely the one that will be the most successful.  For example, in their spare time they can shop and see what the trends are doing, they can pass along possible manufacturers that they see on these shopping trips, etc that would blend well with their style, and / or they could attend one or more trade shows each year (we are happy to get them in) just to absorb what they see on the floor and what the manufacturers who meet with us are saying, they could maintain their own website to multiply their visibility.  None of this is required, but it all helps!  P.S. Patience helps!  It normally takes a while to get started.

How much art do you expect an artist to create in a year?
There is no real magic number.  There are so many variables such as the style and detail of the artwork, the size of the collections the artist creates, and the other reality is sometimes life gets in the way.  When we begin, I like to encourage at least six new collections a year, but like I said that varies.  The key is that we need to keep our presentations new and fresh or the manufacturers and retailers will stop looking.  Why shouldn’t they if they are not seeing anything new?

How has the Art Licensing business changed over the years?
I believe the biggest challenge that we face these days is the commoditizing (yes, I looked it up, it’s a word☺) of many of the product lines that have traditionally been using licensed art.  I believe this comes from the increasing number of manufacturers sourcing their products out of Canton Fair or other similar shows in the international product source locations.  It is also affected by the increasing number of Print on Demand vendors popping up on the internet.  And, lastly by the decrease of time any given product line stays on the shelves.  All of these have affected the market by sending a more simplified, more cookie cutter product to the consumer.  I truly believe that this trend like many others like it in the past will ultimately swing back.   However, in the meantime I believe the artist that creates the most unique work, listens to the consumers and the manufacturers and makes it easy for the manufacturer to deliver a cost effective successful product line will be the most successful.

Any advice or other information you would like to share?
Be patient and persistent!  There is not an industry where the words “If you don’t succeed try, try again” are more true.  However, don’t keep trying the same thing over and over expecting different results.  Listen, Learn, Grow and Persevere and your chances are increased exponentially.

You can find Julie at:
Website: www.artsdg.com
Email:    Julie@Artsdg.com
Social Media: More coming soon!

Really looking forward to hearing what you have to say in the comments below!

Do you want to be spotlighted? Send me an email: info@AnnGraphics.com

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Bo's bLAWg - Return of License Rights after 35 Years

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!

 

Last month I wrote about the way I look to protect an Artist client’s rights in her image preemptively by making the license subject to mutually agreeable minimum annual earnings.  That is a way to get back rights to images being used unproductively in the relatively short-term.  (Last month's bLAWg)

However, the Copyright Act, Sections 203 and 304(c)(3), also addresses the return of copyright interests to Artist in the long-term. In short, for works originally published before January 1,1978, an Artist or their heirs can reclaim her copyright interest after 56 years.  For works published since January 1, 1978, the right to claim a reversion of copyright is available after 35 years.

(See http://copyright.gov/title17/92chap2.pdf and http://copyright.gov/title17/92chap3.pdf

While most of my transactional work over the last 30 years involves works created and licensed after 1977, I have had occasion to advise certain composers and rock and roll poster artists on the way to recover the rights to their works that were exclusively in the hands of record labels and publishers for as long as 56 years beginning in the 1950s and 1960s.
  
For works published from 1978 on, the 35 year reversion right became operative as of 2013.  This year, works licensed in 1980 became subject to reversion.  Next year will open the door for recovery of works licensed in 1981, and on and on.  Each calendar year, thousands of copyrights will be available to be reclaimed by their Artist authors or their heirs should they choose to avail themselves of this right.

It should be clear, however, this right only applies to copyrighted works that were licensed (exclusively or non-exclusively) or “assigned” (sold) in the first instance, not those that were created by an employee for her employer or as bona fide works-made-for-hire.  (For more particulars on what is a work-made-for-hire, see my bLAWg from March 20, 2015 click here ).  Nor does the statutory reversion right apply to copyright interests that were transferred by will.

However, it also applied to derivative works that were made from the original.  So, if an illustration was issued for all kinds of paper products but mostly greeting cards, but was subsequently sub-licensed for a jigsaw puzzle that became a best-selling puzzle, termination of the original license terminates any sub-license as well.

So, why would you want to terminate the license of the sub-licensee who is still selling lots of puzzles?  Because if the Artist is only getting a nominal royalty out of a successful illustration, she can look to renegotiate that royalty rate as an alternative to the termination, or look to obtain a much more lucrative license with another puzzle publisher upon termination!

There is a formal Notice process that applies to both statutory reversion rights.  Rights under Section 203 may be effected at any time during a period of five years beginning at the end of 35 years from the date of original license.  For instance, if an Artist granted an assignment of copyrights in a one or more of her illustrations on January 1, 1978, the earliest date upon which termination of such grant could be effected would be January 1, 2013; the latest date would be January 1, 2018.  So, for those licenses commencing as of 1978, we are right in the window of time to recover those rights. If Notice has not been given in timely manner for this work, the reversion right will be lost for the duration of the copyright term, the life of the Author Artist plus 70 years.

Additionally, the written Notice must be served upon the grantee or the grantee's successor-in-interest not less than two years or more than 10 years before the effective termination date. And, of significant importance, the effective date of termination must be a date that falls within the applicable five-year termination window. So, in our example above, if the rights holders wait until January 2, 2016 to give the minimal two year notice, their window will have closed!  For those who recognize that they are presently in the 10-year window, they can look to exercise their right now, to be effective as soon as the 5-year eligibility period commences.  Make sense?

With copyright interests reverted, the Author Artist and her heirs will have the right to look for other publishing and/or licensing opportunities, presumably on much more attractive rates then were originally offered.  And these recovered copyright interests will last for the remaining part of the copyright  term, 70 years after the death of the Author Artist.

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

Bo's bLAWg - Get Back Your Rights: Royalty Minimums

 

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!

 

An artist asked how they can get back her rights to a group of illustrations that are licensed exclusively but are not making her any money.

The main way that an Artist can look to insure she can get back her rights to an illustration under an exclusive license that is not earning sufficient royalties is to include a provision in the License Agreement that requires minimum royalty benchmarks to be satisfied on a year-to-year basis. At least that is what I look to do for my clients.  Establishing such benchmarks need not be put in terms of royalties, but can be based upon the Licensee’s earnings of sales, whether the Licensor Artist’s royalties are based on gross or net receipts.

This is part of the conversation that the Artist or I would have with the prospective Licensee in the course of negotiations. What is the projected sales income? If the Licensee’s projections compute into royalties that satisfy the Artist’s minimal royalty expectations, then look to include those sales thresholds as ‘minimums’ for the Licensee to maintain exclusive rights. At the very least, even if the Licensee insists their rights continue for the full term, it is possible that the License can be converted to a non-exclusive one – either automatically or upon written notice.

One additional term that might be included is that if the Licensee pays the Artist additional royalties to make up the difference between those actually earned and the minimum expectation, the Licensee may maintain exclusive rights. In that way the Artist can be assured that her minimums are always achieved, or some or all rights revert to her for further use of the licensed image(s).

I can provide specific language on all these terms as needed. Just ask. I can be contacted through my website linked below.

 
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

Hot Summer Updates from ArtLicensingShow.com!

I am excited about ArtLicensingShow.com (ALSC). I had a manufacturer find me through the site
already! I didn’t do a thing other than join. It is a brand NEW only-one-of-its-kind website for everyone in the art licensing business. I asked the Founder and CEO Cherish Flieder to tell us about what is new and exciting about ALSC.

What’s New?

ArtLicensingShow.com is fully up-and-running. We have heard many stories of artists and agents connecting, working on projects together and signing deals! It’s wonderful to hear that the Art Directors/Manufacturers/Licensee Companies are enjoying using the site to see art and it is a huge relief to artists as well. Now licensors can take back control of who exactly is seeing their art licensing portfolios online. (Most of the deals are top secret, so we can’t tell you details until the products are on the market next year.)

This summer, I flew all over the country to New York (Stationery Show/Surtex), Las Vegas (Licensing Expo) and Atlanta (Summer Gift Mart) connecting with members and potential members of the site. There was a very high level of enthusiasm in the air and we are very optimistic for things to come! Members are giving very useful feedback and are an important part of making this website an excellent place to network and show art online. Art Directors tell us that they are eager to see more art on the site from a variety of art and photography styles!

Our development team continues to develop the features of the site to run smoothly and securely in the background. Since we launched, we have added a vetting process for new Artists/Agents and Art Directors/Manufacturers/Licensee Companies to join the site. It’s a difficult thing to do sometimes, but adding this step in the registration process actually has attracted a more professional level of Artist/Agent as well as Licensee Companies. Overall, we are very happy with the progress.

We are getting social…
Art Licensing Show is now on Pinterest & Instagram!
In effort to give our members more opportunities to get their names out there, we have decided to partner with these highly visual social media platforms.

Art Directors are always using these networks to look for art. They can find out about a new artist they like on Instagram or Pinterest and click through to the site to see their private portfolios on ALSC.

Follow ALSC on Instagram: https://instagram.com/artlicensingshow/
Follow ALSC on Pinterest: https://www.pinterest.com/artoflicensing/

ALSC portfolio members can find out the steps to get featured here!
(http://artlicensingshow.com/instagram-opportunities/)

…and even more social!
ALSC has recently added social links to the portfolio enabled profile pages. Artists/Agents can share their links to: Facebook, Twitter, Google+, LinkedIn, Ello, Pinterest, Tumblr, Vimeo, YouTube, Flickr, Instagram, Dribbble, Blogger, RSS, Email, Vine, Spoonflower, Etsy, and Behance.

 

What’s Coming Up Next?

More notifications:
The ALSC development team has been adding new ways for members to know what’s going on within the site including notifications for trigger behaviors and email updates from groups. Settings can be managed in the notifications section. We hope to provide more helpful notifications in the future based on member feedback.

Re-ordering collections:
We are in the finishing stages on a new feature that will allow Artists/Agents to re-order how their collections will appear on the page. (It sounds simple, but the way the portfolios are set up to give specific permissions, it’s much more complicated in the code than one would imagine). We are happy to announce that this long-awaited feature should be up and running by next month. We have hundreds of ideas in queue that we are working on with our development team. Members are encouraged to contact ALSC with feedback and ideas. (http://redcarpet.artlicensingshow.com/contact/)

There are so many things you can do at ArtLicensingShow.com, but there are also MANY lesser known strategies that will help you out. Cherish and I brainstormed on some tips that have come up in recent discussions. Hope you find them beneficial.

Tips & Tricks for Artists/Agents

• Mark each image with your name so if an Art Director saves the image on their computer, they will know it is yours when they come across it in their files later.

• Upload tear sheets/portfolio pages rather than individual art. It will save you time! You can edit the crop if you want to zoom in on a portion of it for the preview image.

• Get connected with industry leaders. Join a group that interests you. There are 20 specialty groups, so far, such as Greeting Cards, Trends, Home Décor, Art Marketing, Tech Talk, Character Design, Art for Kids, Bi-Weekly Art Challenge, and Call for Submissions. Of course, Annie Troe’s “2nd Thursdays” group is very popular and a great way to get plugged into our community.

• Take time to add tags, keywords and descriptions. When an art director is in your portfolio and does a search (or clicks on a tag on your profile page) it is searching only within YOUR portfolio. Adding more art will make these searches more productive for them, which will give you more opportunities to license your art.

• Remember, this is YOUR private portfolio; you can invite any credible licensee to the site to come see it. They only need to register once and then they will be able to login and out with ease. (Invitation & art sharing steps: http://redcarpet.artlicensingshow.com/kb/invitation-and-portfolio-sharing-process-infographic/)

• Sharing your art is VERY simple, but it’s not automatic. Login often to share your art with current and new Art Director contacts. Remember, you have 100% control of who sees your art. All you do is click the check box next to their name and it is instantly shared with them (no “save” button needed). (More info on sharing: http://redcarpet.artlicensingshow.com/kb/share-collections-pieces-art-directors/)

Tips & Tricks for Art Directors/Manufacturers/Licensee Companies

• Click on the “My Activity” link to see an archive of everything that has been shared with you. There is a thumbnail for each share that will take you in to see the full collection or piece at your leisure.

• Feel free to request Artists/Agents to submit to you though the site. It’s very easy for them to share work this way (since they have already uploaded their art, they only have to press the button next to your name, this means you get to see it even faster!). (Info on how to request specific art “shares” :
http://redcarpet.artlicensingshow.com/kb/art-directors-ask-see-hidden-portfolio-collections/)

• All the portfolios are searchable, so you can find what you need at a moment’s notice. You can search within an Artist/Agent’s portfolio or the whole site if you go to the “Portfolio Tab”. In both cases, you will only see art that is specifically shared with you. (How to request art shares: http://redcarpet.artlicensingshow.com/kb/art-directors-ask-see-hidden-portfolio-collections/ )

• Post your art needs in the “Call for Submissions” group if you are looking for licensors to submit specifically themed images with your ALSC account. Don’t worry, submissions via ALSC won’t bog down your email with attachments. You can login to the site when you are ready to review fresh new art. (Ask to join the group here: https://artlicensingshow.com/groups/call-for-submissions/)

Note: You can join ALSC today and by setting up a free, enhanced “yellow pages” type listing for your business while getting a feel for the site. Also, if you want to learn more about the tools and resources available to you with the premium account options check out our knowledge base site at:
http://redcarpet.artlicensingshow.com/.

THANK you Cherish for writing the majority of this post. Love the "Call for Submissions" group - what a great idea! I can't imagine the amount of time (years!) you have spent researching and setting up this amazing new site. I REALLY appreciate it and I find it is worth every penny.

Everyone - let me know if you found this post helpful and feel free to post comments below or email me info@AnnGraphic.com. Thank you for stopping by!

Related posts: Why I am on Art Licensing Show http://annietroe.blogspot.com/2015/03/why-i-am-on-art-licensing-show-com.html

Artists: See how your profile page looks to Art Directors/Manufacturers : http://annietroe.blogspot.com/2015/02/peek-into-artlicensingshowcom-next.html

Why I am on Art Licensing Show .com!

 PROUD to be a part of the Blog link up 2:00 PM Eastern on  ArtLicensingShow.com  is a cool new site where Art Directors/Manufacturers can join for free. Artist and Agents can affordably "go" to an art licensing show! (online :-)

I made a short little video on my Mac computer. Used iPhoto, exported it — and it was looking blurry on YouTube... SO exported it again at 720p and Taaa Daaa! Looks so much better. Really for the first time doing this kind of thing - it didn't take too long. I love it when technology is easy :-)

The video above hits what is great about the site! (nope, I didn't get paid to say this stuff)

• It is the ONLY Art Licensing Show online
• Be listed in the ultimate art licensing directory
• No cost or low cost depending on if you are an Artist or Art Director/Manufacturer
• Connect with industry leaders - It is a social network dedicated to Art Licensing

You can find me on ALSC here: http://artlicensingshow.com/members/annietroe/profile/

Last time I checked there are a lot of artist and agents on the site (in the hundreds). AND quite a few Art Directors/Manufacturers rolling in!

Once you are on ALSC, be sure to check out my Group: "2nd Thursdays" We are over 200 members! Everyone is welcome, Newbies, Old timers, Manufacturers, Artists/Agents - it is all good. Bring your favorite beverage and your topic or questions for the group. More details here http://artlicensingshow.com/groups/2nd-thursdays/ Looking forward to seeing you there!

Are you on ArtLicensingShow.com ? Leave a comment! :-)

Not on Art Licensing Show.com? Here is a peek into the site http://annietroe.blogspot.com/2015/02/peek-into-artlicensingshowcom-next.html

Thank you for stopping by,

Bo's bLAWg - What should be in an art licensing contract with a manufacturer

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 have a list of some 30 issues that should be covered one way or the other in a visual art License Agreement with a manufacturer.  Some of them are what you would consider “legal boilerplate,” but there are good reasons for such provisions to be included.  Others are more particular to most any agreement that pertains to a copyrighted image.  Then there are some that are unique to a visual artist’s agreement with the manufacturer of goods.  I will identify the most important to me from the last two groups.

Exclusive and Non-Exclusive Rights

The first and most important issue to me is whether or not the license is to be Exclusive or Non-Exclusive, and whether the referenced exclusivity pertains to the goods for which the designs are intended, or the designs which are being licensed, or both.  On occasion the nature of the exclusivity is uncertain.  Consider the following provision:

“Artist grants to Manufacturer the exclusive right to Artist’s illustrations on Schedule A attached hereto to reproduce, manufacture, have manufactured, use, sell, advertise, promote, and distribute in domestic and/or foreign markets in the Licensed Products in accordance with this Agreement.” 

What exactly is the exclusive right that is granted?  A literal reading could be interpreted to mean that the Artist has licensed exclusively only her Scheduled illustrations to this manufacturer, but retains the right to license other of her images, whether or not similar to those licensed in this agreement, to a competing manufacturer of the same kinds of Licensed Products!

If the Grant of Rights is Non-Exclusive, then the Artist maintains her right to license to other manufacturers of the same or similar goods.  If Exclusive as to goods, then the artist will not be able to license to competing manufacturers for the duration of the agreed-upon Term of the license. 

A well-drafted Grant of Rights provision, in concert with a set of Recitals (“WHEREAS” provisions that I recommend at the start of an Agreement that identify the parties and the underlying intentions of the Agreement), should clearly state the nature of the Exclusive Rights that the manufacturer expects to acquire and the limits on their use.

If the Exclusive Grant of Rights bars the artist from licensing the same or other illustrations, make sure that the bar extends only to competing goods rather than any other kind of manufactured goods.  The goods that are encompassed under the license should be listed.  These are often called “the Licensed Products.” 

Furthermore, depending on the length of the Term, make sure that the Exclusive Agreement requires a minimal level of sales for each year of the Term.  You do not want to tie up your best illustrations (much less all of them!) in a deal that does not net you a reasonable minimum income.  Where the manufacturer is unwilling to guarantee minimums, it is possible that they will accept the prospect of the License becoming Non-Exclusive as to your illustrations and their goods if the royalties do not come to an amount that the manufacturer itself believes is the minimum you should be earning for Exclusive Rights on its anticipated sales.  The minimum for each year can change, depending on the kind of goods, expected promotional efforts and the market.  It is not unusual for me to come up with an acceptable ‘bell-shaped curve’ of a minimum in royalties, low the first couple years, spiking at years three and four, then receding again as the product is supplanted. 

A significant Advance on sale royalties is another way to insure a decent income on the license, particularly if the Advance can be recouped only on the first year or two of sales.

 

Sub-licensing 

The next most critical consideration is whether or not the manufacturer will be sublicensing manufacturing rights to another entity.  As you can imagine, such sublicenses can result in significantly diluted royalties to the Artist.  You might expect to negotiate for the right to pre-approve proposed sublicensing terms.  To be more attractive to you, a sublicensing arrangement could involve a big up-front fee in which you would share.  Otherwise, look to establish a minimum royalty per unit sale regardless of manufacturer sub-licensing rights.

 

Discounts

A related issue is the manufacturer’s right to discount its wholesale goods.  Sales to big chains and Amazon can include huge discounts due to the volume of sales involved.  Again, as long as the Artist is entitled to a minimum $um on each unit sold, discounts need not grossly decrease the Artists 4 or 5% royalty rate.

 

Audit Right

It is one thing for a manufacturer to supply an Artist (and her accountant!) with statement of sales and computations of royalties due; another for the Artist to have the right to audit the manufacturer’s records to assure the accurate reports on sales.  While I have nothing to support the opinion, I think that the threat of an Audit, particularly with a financial penalty attached in the event of the discovery of any erroneous accounting, helps to insure that the accountings are in fact accurate; while absence of the provision pretty much assures the licensor Artist that they will never know if the accountings were accurate or not.

 

Copyright Notice / Trademark

Wherever possible the Artist should look to include a legible copyright notice associated with the illustration being used in the product.  Don’t forget to include the notice in product packaging that might well include the artwork.  I urge clients to include their own trade name as long as they are certain that it does not infringe another entity’s trademark.  The Artist can expect to warrant that she has rights to any trade-name and trademark used.  Including a URL as part of the name credit in the copyright notice (or otherwise) can be a significant promotional benefit to the Artist.

 

Quality Control

The quality of the item and the Artist’s illustrations as used is not the issue it was back in the Analogue Age.  Correct use of Digital files pretty much assures that the reproduction of the illustration will be decent.  However, the product itself may not be.  The Artist will want to satisfy herself up front that the manufacturer makes quality goods and that her reputation will not be sullied by association with crappy goods.  The right to pre-approve the product and quality of the reproduction and copyright notice and name credit, along with free samples after approval and manufacture are still legitimate terms to include.

 

Dispute Resolution

If there is a dispute that crops up, whether on name credit or accountings or termination rights, it is likely to be an unreasonably expensive proposition unless there is a prevailing party cost and fees provision included in the Agreement.  Otherwise, to bring a claim, the Artist will be out-of-pocket for attorney’s fees and costs to bring an action in court on a dispute that cannot be resolved between the parties.  A prevailing party costs and fees provision makes it much more likely that a party will not have to pursue a meritorious matter in court, or sue on one that lacks  merit.  

A much better alternative than the threat of court process, however, is the prospect of mediation and/or arbitration as the contracted way to resolve disputes.  Such Alternative Dispute Resolution process has become much more acceptable to manufacturers over the last few years.  95% of the matters that I have had occasion to refer to mediation – a three-way discussion facilitated by a trained mediator -- are resolved in the course of that process. Arbitration, if necessary, is a quick, private and relatively inexpensive alternative to court.  Prevailing party fees and costs can still be awarded in arbitration if provided in the Agreement.  I strongly recommend that provision still be included as a means to leverage settlement of a legitimate claim and avoid specious ones.

As mentioned at the top of this bLAWg, there are many more issues that need to be included in the typical Manufacturer’s Licensing Agreement, but they are for the most part all reasonably included by both parties if requested (or required).  If you have raised these listed issues in negotiations, I suspect you will be respected for your level of sophistication about licensing terms, and may well be able to get better terms than other Artists of whom the manufacturer’s business rep might otherwise take advantage.

If you have further questions about this that you want to direct to me personally, I can be contacted through my website linked below.

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.

Peek into ArtLicensingShow.com! - Next Opportunity to Register

 Hey Creative Souls!

I have been getting questions of what the NEW and fabulous ArtLicensingShow.com looks like.
The above image is what an art director will see when visiting my profile. (Click the image to see it larger). That will give you a much better idea of how the site navigation is set up, what your profile page might look like etc. You can connect with other members and join groups too! :-)

You can feature up to nine collections on your profile page. (You can upload as many collections as the plan you signed up for allows). I think of those images as 'teasers'. Art directors and manufacturers can request to see your portfolio. Or in my case I have selected the option to share my portfolio with all art directors and manufacturers. This site is set up for you to choose the amount of privacy and control you want to have with your art - nice! ArtLicensingShow.com is in Beta, and holly cow is it amazing and working wonderfully - yes, I am excited about it :-)

I can only speak from my perspective, but I would think art directors and manufactures would love the one-stop-shopping with NO travel expenses! They can join for free. I could gush on, but those two are big benefits.

I also imagine the same goes for agents (they do have to pay to join just like artists do). They can use this site as their privacy protected art catalog :-)

Next opportunity to register:

I asked Cherish, Founder of ArtLicensingShow.com if she has any news to share. Here is what she said: "We are thrilled with the way the new ArtLicensingShow.com (ALSC) community is already blossoming in it's early Beta stages. So far, we have about 250 art licensing professionals registered, including agents, artists, and art directors/manufacturers. Art licensors are very busy uploading thousands of pieces of work that can be shared with ease and searched with art directors they select. There is an overwhelming amount of enthusiasm in the air for the way this new tool has the ability to create opportunities for creatives and licensee companies alike.

Our next opportunity to register for portfolio membership on the site is March 2nd. All information will be sent to our email updates list. If you want to get on that list, be sure to click over to RedCarpet.ArtLicensingShow.com to sign up.

Qualified art directors may email RedCarpet@ArtLicensingShow.com at any time for details on how to set up a complimentary account."

I want to take a second and thank ALSC for the great profile they posted on me! I REALLY appreciate it. If you are curious about it, you can see it here: http://artlicensingshow.com/annie-troe/

Join a group:

If you have joined or do join ALSC, join a group! There are already several groups on the site. It is a way to get together to talk about the business or ask a question. I started a group called "2nd Thursdays" and we had our first get together last night. We had a great turn out - what a blast! :-) Even though I have picked a time and place for us to hangout, you can post in the group at anytime. Hope to see you there!

Thanks a bunch for stopping by the blog, sharing it with your friends. If you don't want to miss what is going on, be sure to follow this blog and/or sign up for my newsletter. Happy Creating!

Next week's post: What should be in an art licensing contract with a manufacturer. - Bo's bLAWg.