Licensing agreements and contracts: what you need to know when waiving fees
This guide explains which terms to watch out for in licensing contracts and agreements, and what artists and estates should think about before agreeing to drop licensing fees.
When you are asked to sign a licensing agreement or decide how someone can use your work, it helps to understand copyright and contract basics. Knowing what you are agreeing to can help you keep control over your work, avoid problems later on, and make confident decisions about when, and how, others can use your work.
What is licensing?
Copyright is a legal right that protects your work. It means that, in general, other people cannot use your creations without your permission. You can choose to license your copyright. Licensing means you can charge other people and organisations for permission to use your work, in ways you specify.
Copyright licensing is the process of getting permission to use someone's creative work, like a painting, photograph or graphic design.
An agreement giving certain people permission to reproduce copyright-protected artwork in particular ways is known as a licensing agreement. The agreement may be set up with the artist or creator, their agent, a beneficiary, the representative of an estate, or another copyright holder. Usually this involves a cost.
What does waiving a licensing fee mean?
When we talk about waiving a licensing fee, this means not accepting ongoing royalties or a one-off payment for the use of your work.
If no payment is involved
There may be occasions when artists are asked to allow their work to be used for free, giving up their licensing fee. This can feel positive at first: through support for a worthwhile project, recognition and exposure of your work or a favour for someone you know. However, agreeing to receive no payment or waiving a licensing fee can have lasting effects. It can impact your legal rights, your future income, and the expectations placed on artists more widely.
An oral or informal agreement not to charge a licensing fee often comes with fewer clear terms and less certainty than a standard written licence. Even where arrangements are informal, they may still have legal effect and can sometimes be enforceable. This can open the door to wider, longer-term, or repeated use than you intended, and may reduce your ability to negotiate fees or conditions later. In practice, this means you may lose out on more control and more income than you originally expected.
Even when there’s no payment involved, it’s important to have a written licensing agreement. This makes sure everyone is clear on the:
- duration the agreement runs for
- the territories or countries the agreement applies to
- the publication, exhibition, or product which you’re giving permission for your work to appear
- ownership of the copyright of the work.
Having a written licensing agreement will protect your rights and can reduce the risk of a copyright dispute later.
What terms should I look out for in contracts and agreements?
Often artists and estates are asked to sign agreements with companies, institutions or those wishing to use their work - where certain terms can result in waiving licensing fees, as well as giving away rights and control.
Pay close attention to the following terms, making sure you understand their effect and are happy to agree to them. You may not be able to change your mind later.
- Works or Artistic Works – this should accurately describe the work you’re giving permission to use
- Assignment – in relation to copyright, this means giving away the rights you have as the creator of the work, meaning you have no control over how your work is used in future
- Waiver of moral rights – your moral rights include the right to be identified as the artist or creator and can protect your works against derogatory treatment, and remain even if you give up the copyright, but you can be asked to waive them which means the other side does not need to respect them
- Intellectual Property Rights – this could include a broad range of rights such as copyright, designs, trade-marks, patents
- Licence – this allows someone else to use your work in the ways you agree, which are your ‘terms’, for example, how the work can be used and for how long
- Exclusivity – this could mean you would not be able to allow any other person (including yourself) to use of the work in the way described in the ‘terms’ of the agreement
- Warranty – this is a promise/assurance, for example you might be guaranteeing that your work will not infringe anyone else’s intellectual property rights
- Indemnity – an agreement to cover losses in certain situations, for example paying compensation for copyright infringement
- In perpetuity – relates to the agreement or use of the work lasting forever
- Irrevocable – the agreement cannot be withdrawn from
- Worldwide – the agreement applies globally
- Machine Learning – agreements may include terms which allow for the use of the work in artificial intelligence
The entire agreement clause
Wording stating that the contract represents the entire agreement between you and the other party, means anything decided beforehand is irrelevant unless it’s in the contract. For example, if you asked for certain terms or conditions by email, for them to apply they must be written in the contract itself.
Check that the contract is consistent with previous conversations you had. If it’s not, ask to have inconsistencies put right.
Even if the contract doesn’t include the words ‘entire agreement’, there may be other language that indicates its terms are the only legally binding agreement.
What else to consider
It’s worth having a legal advisor review any document formalising an agreement to waive your licensing fees before you sign it. Useful questions to ask include:
- What rights will I continue to have?
- How long does the agreement last?
- Is there any way of ending the agreement early?
- Can I still use my work, like include it in a portfolio?
Before signing any agreement relating to licensing or waiving your licensing fee
- Ask a Legal advisor to review any agreement for how it affects your copyright.
- Look out for certain terms used in contracts and agreements, listed earlier in this article: if these words are in the contract, make sure you understand their effect and are happy to agree to them.
- If you’re a DACS Licensing member, contact our team to get clear information on the sector-appropriate amount you could be paid.
- If you’re a DACS ARR or Licensing member, you can get free copyright advice to help you understand how copyright-related terms in contracts affect your rights.
Disclaimer
The content of this article is not intended to be applied to individual circumstances. It is not legal advice, and is not a substitute for independent legal advice.