STOP SELLING ART-LICENSE IT!

Joshua Kaufman, esq. © 2003

I have a radical proposition for all artists and art publishers. STOP SELLING ART! That’s right. Stop selling art, make more money, and regain control of your artwork. This might sound like a contradiction terms or simply lunacy. O.K. by not selling your art, you retain control over it. "Fine," you say, "Then how do I make any money?" The answer is simple. Just look at the software industry. Microsoft, the multibillion dollar company, has never sold a single piece of software in its history. Nor for that matter, have you ever bought a single piece of software. All that software which is housed in your computer is owned by Microsoft or other software company. All you have acquired is a limited right to use it subject to terms and conditions imposed upon you by the software companies. In short, you have purchased a license to use to the software and not the software. But you say, "that can’t be right, I must own the software. I went to the store; I paid for it, I got a box; I installed on my computer, I use it anyway and as often as I want; I don’t have to return it. How is it that I don’t own it?" Short answer is when you opened the box containing the software you found a "License Agreement" stuffed inside, not a "Bill of Sale". Also anytime you have gone on a website and downloaded software, there is always a License Agreement presented and you generally click on a button that says "I Accept" before the download begins thereby binding you to the terms of the license. If you ever bothered to read a license that comes with the software, you would learn that, in fact, no ownership rights in the software are being transferred to you and, in fact most of the license is made up of terms outlining the large number of restrictions imposed on the way in which you may use the software. The software license will often limit you so that only one person at a time can use it, or it can only be used on one computer, or that it can’t be resold, or transferred, or modified, or adapted, or traded. You may not even look at the software in a way that reveals its inner contents. You may not add to it. You may not subtract from it, and on, and on, and on. Have you ever noticed that there are no software rental stores, the computer equivalent to Blockbuster. Why? Because the software companies not you own the software. The real owners of the software can restrict you or stores and not allow anyone to rent it to others (they also got a law past).

While it is true you didn’t "sign" any contracts. Nor did you enter into any oral agreements. Nevertheless, you are bound by the terms of that software license. Courts have time and again upheld the validity of software licenses. These type of agreements are generally called "Shrink Wrap Licenses", they become effective when you tear the "shrink wrap" covering off the box. The other form of common software license takes effect when you click on that "I Accept" button while on line, these are known as "Click Licenses".

How does all of this apply to the art world? Well let’s look at some of the issues confronting the art world. As an artist or a publisher, let us assume you want to prevent third parties from creating unauthorized derivative works from your artworks. True, there are a number of cases which provide that unlicensed canvas transfers, making tiles and cutouts, mini-prints, etc. of works, infringe on the rights of the copyright holders. However, there is not a large body of law in the area and there have been a few decisions which have even gone the other way. For example, a recent Canadian Court decision founded creating canvas transfers is legal in Canada. By licensing instead of selling your art, you will not be at the mercy of a judge who does not understands copyright law or the art business. Instead when you license art you set the terms and conditions that define the license, and you establish terms that will specifically prohibit the use of your artwork in anyway except as you intend. A print is to be a print only, it is not to be made into a canvas transfer. A calendar, book or catalogue are to be used as calendars, books or catalogue not packaged as some cheap and offensive product. A license can prohibit the person who acquires the physical work from creating canvas transfers, decoupages, tiles, mini-prints, and the like. Since you never give up ownership, you retain the right to control all of its uses. Additionally, an artist or publisher who transfers an artwork by a license can also retain greater control over the way it is marketed. This would include, not only advertising, but also pricing. Although the area of discounting in terms of a licensed good is somewhat murky, the artist or publisher should have greater latitude in dictating what prices works are sold at and maintaining their market when the work is transferred via a license rather than through a sale. You are setting the price for your work which you own not dictating to other at what price they can sell products which they bought and own.

What would be the mechanisms for licensing art? We all know in a regular sale we have a Bill of Sale, Invoice, or Purchase Order which has been drawn up and the work is transferred subject to their terms and conditions. With a license, the process it is not much difference, the terms and conditions of the license could be written up as well but instead of calling them Bills of Sale or Purchase Order the nomenclature used would reference a license and only be a little different. Most of the terms would be the same type, i.e. 30-day net, who is responsible for shipping, warranties, etc.

The key element in making sure that a license is enforceable is that the party acquiring the work must be on notice of the existence of the license have the opportunity to read its terms and in some manner acquiesce to the conditions of the license. (Like ripping open the shrink wrap or using software.) For art how would you present the license terms? In a limited edition print, the licensing language can certainly be incorporated into a Certificate of Authenticity. When it comes to products such as calendars that are shrink wrapped, just like in software, a sticker can be affixed to the shrink wrapping indicating that the breaking of the seal represents acquiescence to the terms of the license. The license terms can be printed on the sticker or the shrink wrap, or viewable through the shrink wrap as in software packing. In terms of non-shrink wrapped items, simple language can be affixed to the product in a way that the consumer can see and be made aware of the terms (e.g. the back of note cards, on catalogs, on the bottom of prints, etc.).

Upon reading the license agreements, if the person does not want to keep the work, the would have the right not to purchase them or perhaps to return it. Keeping a product after proper notice has been deemed acquiesce to the terms of the license and therefore binding on the licensee (purchaser).

Will it hurt sales? If the software industry is any example it does not. To the regular customer there is no difference. The term (time frame) of the license is perpetual and the license should be transferable so when a person goes to a gallery buys a print, has it framed, and hangs it on the wall there is no difference for them from a sale. They would have the right to resale (sublicense) it as well. That way to a customer a sale verses a license is the same. Buy a print or calendar hang it on the wall, buy a book read it and put it on the shelf. The only ones affected are those who would make products out of your work that you do not wish to have created or sell the work in an objectionable manner.

Therefore, if as an artist or a publisher, you are interested in what happens to your artwork when it enters the stream of commerce and you want to control the uses to which the artwork is put or maintain the integrity of the work and/or its marketing, you should give serious consideration to licensing and not selling your work. Look at the software industry and learn from their experience and perhaps emulate their success. License, don’t sell!

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Joshua Kaufman is a partner in the law firm of Venable, Baetjer, Howard and Civiletti, LLP. While he is based in Washington, DC, his practice is national in scope. He is one of the country’s foremost attorneys in the field of art and licensing law. He has published over 200 articles on various topics in the field. He is also an adjunct professor of law at American University Law School. A large number of his articles can be read and downloaded from his web site at, www.jjkaufman.com.