To avoid problems with licensing, it is vital that the licence terms are clear, documented and understood by everyone, regardless of language or literacy levels. Because licensing can be so different each time and has so many variables, it is hard to set out standards or benchmarks. There are some important things to think about each and every time an artist, or their representative, considers a licensing opportunity.
In order for artists to determine if the remuneration is fair they need to know and be realistic about:
- What they will earn;
- When and how they will be paid;
- What they will control;
- What they can do if they want anything to change;
- How they will be acknowledged;
- The manufacturer’s costs and risks to produce the licensed product.
Artists must be fairly remunerated.
- Artists gaining meaningful benefit.
- Is not to the artists’ detriment.
- The licence is mutual – that is, all parties are getting similar benefits.
- All parties understand the terms of the contract.
- Artists supported to access independent advice.
- A level playing field with access to transparent information.
- A cooling off period, right to terminate and price information is included the contract.
A clear, strong agreement is crucial. It is also important not to pressure artists into making decisions or entering into agreements quickly. They need to be provided with enough time to seek independent legal advice. It is also critical, and a requirement of Dealer Membership of the Code, to allow a cooling off period (see clause 3.3).
The IartC encourage artists to have all contracts independently checked. Dealers should also encourage this, as well as ensure artists are provided with enough time to make this possible. The Arts Law Centre of Australia provides a document review service available to artists:
Arts Law Centre of Australia
P: 1800 221 457 (toll-free)
Agreements should use clear words and a form that is easily understood. Arts Law Centre of Australia also provides guidance on the elements that should be included in a strong licensing agreement:
1. Parties: The agreement should clearly identify the people or organisations making the promises.
2. Licence type: Decide whether an exclusive, sole, or non-exclusive licence is appropriate and whether there is any limitation on the artist’s freedom to deal with other dealers or representatives
4. Moral rights: Set out how the artist wants to be attributed (named) and where they want this to appear on any reproduction or promotional material. Specify that the artist's consent must be obtained to alter the artwork/image, add something to it, or change it in any way. Remember that an artist cannot sell, transfer or license moral rights.
5. Term: Set the time period during which the licensee may use the rights granted under the licence.
6. Territory: Determine the place in which the licensee may use the rights granted under the licence. Does the licensor want this place to be limited to a specific town, region or country?
7. Payment: Agree on the amount or amounts the licensee will pay the licensor. Payment can be a flat fee, royalties (i.e. a percentage of money received from using the rights granted under the licence) or both. Artists should be provided with information around pricing, such as the wholesale price, retail price and any other relevant prices. Artists can seek advice from organisations such as Copyright Agency (www.copyright.com.au) about payment rates. Also consider whether any GST is payable. The agreement should make clear what regular reports to the artist on sales and payments will be provided.
8. Termination: There should be a clause covering what will happen if there is a breach of an important part of the agreement, and how long the licensee and the licensor has to fix the problem before either can exercise the right to end the agreement. There should also be a clause that sets out what happens when the agreement ends.
9. Evidence: A record of the agreement should be kept. Two copies of the agreement can be created so that the licensor and the licensee can each have a signed original.
For further information from the Arts Law Centre of Australia about licensing read here.
For more information about licensing Aboriginal and Torres Strait Islander art read here.