AJPark

Here’s a scenario.  You get a call from a customer asking you to design a range of clothing for the upcoming season and then manufacture that range for them.  You do, and they are ecstatic with your work.  You’re really pleased with it too, and you want to add parts of the design to your range, and incorporate elements of it into new designs.  But can you?

Do you own the rights in those designs? 

The answer could well be ‘no’.

If you don’t sort out who owns the rights to your designs at the outset—you could fall into the trap of losing those valuable rights to the people who commissioned your work.

In New Zealand, the default position under the Copyright Act 1994 is that commissioned drawings—in our scenario the designs—are owned by the person who commissioned them, not the designer.

This should be ringing alarm bells for you if you regularly do work on commission.

What does ‘working on commission’ actually mean? 

The critical element in a commission is an agreement to pay for a creative work (specifically a photograph, computer program, painting, drawing, diagram, map, chart, plan, engraving, model, sculpture, film, or sound recording) before that creative work takes place.  In our scenario, that agreement should be an agreement to pay for the drawing, or other creative work, as well as the clothing manufactured using the designs. 

Each situation will be different depending on what is being commissioned.  When it comes to ownership of your valuable intellectual property, leaving it up to what was discussed with each customer on the phone is what we would call a ‘high risk’ strategy!  This approach could lead to significant ownership issues downstream.

How do you better protect yourself and your designs?

The Copyright Act rule regarding commissioned works is only a default position.  You can ‘contract out’ of this default position by having a formal agreement in place.

The simplest way to do this is with a standard set of terms and conditions for commissioned work.  In our scenario, these would form the basis of your agreement with the commissioner, replacing the phone conversation with straightforward legal terms.

In those terms and conditions you can set out what the commissioner receives for their money, and who owns what at the end of the job. 

When drafting a set of terms and conditions it pays to get advice.  That advice need not be expensive, and could save you from costly mistakes down the track.

Well drafted terms and conditions also mean that you can set out other important aspects of the commission, such as payment, deadlines for completion, the scope of the work and the circumstances under which either party can terminate the agreement.

Licence agreements

Another useful tool in the legal toolbox of any designer is a license agreement.

If you negotiate ownership of the copyright to the designs you were commissioned to produce,  you would then be free to license it to others.  That nifty design element or clever print you created during your commission could be a secondary source of revenue if others would like to incorporate it into their work.

Though be aware that when it comes to licensing, one size does not fit all and it is important to get an agreement that suits your situation.

Licensing considerations include whether the license is exclusive to one person, or non-exclusive—meaning you could license the same thing to many people.  You also might consider whether the license is worldwide, or restricted to a certain geographic area. And of course, you’ll need to agree on the royalties that are payable to you for the use of your design or design element.

Licenses aren’t straight forward, and need to be right, so always seek professional advice before entering into one.

Don’t get caught out!

Put terms and conditions in place, and don’t do work for people until they have been signed. 

And then, if you have the opportunity to license your work, talk to a legal professional to make sure you only license what you want to, and that you obtain the royalties you want in return.

An edited version of this article was published in Apparel, January 2010.

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  Guy Smith

  Executive