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Monday, October 17, 2016

Art Licensing Editorial - Should Artists Sign Exclusive Agreements?

In the art licensing industry it is often heard that artists should NEVER sign an exclusive agreement because it will restrict them in being able to get licensing deals and earn revenue. However, that may not always be true. Just like so many other things in this industry it depends upon the artist and what she/he hope to achieve in licensing her/his art. The following discusses exclusive and non-exclusive agreements that apply to 1. art licensing agencies that represent artists, and 2. manufacturers that license art for their products.

• Exclusive agreement with an agency
The majority of art licensing agencies in the United States require that their artists agree to an exclusive representation. That means the artists use only one agency to get them licensing deals in ALL product industries worldwide. Although, if the agency does not license art to foreign manufacturers, the artist may hire another agent to only represent her/him in foreign countries. Note: The reason agents want to do exclusive representation is to avoid the confusion if several agents submit an artist art to manufacturers. Not only do the manufacturers think it is a waste of their time to view the same art shown by several agents but if they are interested in licensing any of the art they would not know which agent to contact.

Some agencies do non-exclusive representation because they concentrate only on particular products such as fabric or wall art. Thus, some artists do have several agents. However, it can get sticky if one of the agents decides to license the art for products that they were not hired to.

• Exclusive agreement with a manufacturer for a specific product industry
Some industries are very competitive and want to use artist brands to sell their products. For instance, many fabric companies that sell their products to the quilt industry require their artists to be exclusive to them since they are showcasing and promoting the artists. That means those artists are not allowed to license their designs to other fabric companies. As artist Tara Reed points out in "5 Things to Consider Before Signing an Exclusive Art Licensing Agreement", an artist may decide to enter an exclusive agreement if they will ". . . guarantee a certain amount of sales per year (hard to come by at the moment), guarantee that they will bring out a certain number of products, promote you and your brand in specific ways… you want something in return for cutting off other opportunities for a few years." Also read art licensing agent Maria Brophy's article "Should you Sign an Exclusive Agreement - What to Consider". It has excellent examples on when Maria DOES NOT and when she DOES sign exclusive agreements.

• Exclusive agreement with a manufacturer for a specific image(s)
The most common exclusive agreement in the art licensing industry is when manufacturers license an image for their products. In fact, most product licensing contracts have this stipulation in it. The agreement requires that the artist NOT license the SAME image to other manufacturers in the SAME industry until after the contract expiration. The purpose of this exclusivity is so that the manufacturer is not competing with other manufacturers that are selling to the same consumer base. An exception is in the wall décor industry where non-exclusive agreements are offered. That is why the same image for posters and prints may be in many print-on-demand wall décor Internet stores.

However, the same image may be licensed to different manufacturers at the same time and for the same product if their customer bases are different. For example if the image was licensed to a manufacturer that sells only to general retailers it may be okay to license the same image to a manufacturer that sells to the mass channel (chain stores) and to non-profit companies. Of course, you should inform the companies that are involved to make sure they have no objections in licensing the art to another manufacturer. If you do not inform them, you may be infringing on contracts since you may not be aware that besides selling to general retailers the manufacturer also sells to chain stores.

Note: A difficult situation could occur if an artist license VERY similar looking images to different manufacturers that produce the same products. Manufacturers want to sell art that is different from their competition. They would be unhappy if the images are so similar that customers would mistake them for the same art. It is always wise to inform the companies involved to make sure there is no conflict.

• Contracts/Agreements
Read all contracts and agreements closely and make sure you understand all the terms and clauses in it including "exclusive". If you are unsure, I recommend that you hire an attorney experienced in art licensing legislation to look it over before you sign it. It is less expensive to pay an attorney to make sure the contract is fair to you than to find out later that you signed a contract with clauses unfair to you.

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