INEQUITABLE CONTRACTUAL PRACTICES ARE STILL PREVALENT
The story is as old as life - you don't get what you deserve, you get what you negotiate. The clients seem to be much better at the latter than the artists, as we continue to give away things like copyright ownership for no additional compensation. Here we offer an analysis of an intellectual property provision used by a prominent international organization in its blanket contract for services, explain what it means, and what can be done about it.
When
the Graphic Artists Guild alerted the community to unfair contractual
practices of Conde Nast Publications, Inc. in 1997, it waged an all-out
war on behalf of all designers. The Guild not only contacted this
publisher, but also created an on-line resource called The Contracts
Monitor. The Guild's commendable efforts have helped many a designer be
more aware of what constitutes a fair contract, and to be able to
negotiate one.
Unfortunately, this problem is not going
away. Rather, unfair contractual practices are escalating. While visual
artists have an agreed-upon code of professional conduct (i.e. the Code
of Fair Practices), there is no such thing as far as client companies
are concerned.
Here we offer a brief commentary on the
wording of the Intellectual Property Rights provision of a blanket
Contract for Services presently used by a prominent international
organization, which shall remain nameless for the purposes of this
analysis. It is sufficient to point out that this provision is not
unique to this particular organization. Many large companies in both
public and private industry sectors have almost identical provisions in
their own blanket contracts used to purchase just about anything,
including graphic design services.
First, this provision
states that "all intellectual property and other proprietary rights ...
except pre-existing materials, collected or prepared as a consequence
of or in the course of the performance of this Contract, shall become
the sole property of [the Organization]."
Translation: If
you, the designer, presented 5 initial designs of a brochure, for
example, the client will own all five concepts, as opposed to just the
one they select for publication. As a result, all unique layout
treatments, design elements or even fonts you created with this project
in mind become the client's property and can no longer be used by you.
The standard creative industry practice is that all specially created
fonts, sketches, concepts, and designs not selected remain the property
of the designer, unless they are purchased at an incremental fee, for
which this contract makes no provision.
The contract also
asserts that the design firm - coincidentally, referred to as "the
Contractor," as if the service at hand were the manufacture of a large
quantity of industrial wire - "shall hold harmless and fully indemnify
[the Organization] from and against all claims and proceedings for
infringement of any patent rights, design trademark or name or other
protected rights resulting from the Contractor s performance."
It
is interesting that this client chooses to secure all rights, yet
refuses to accept any liabilities for the project. While not illegal,
this could not possibly be considered even remotely ethical.
What
is more worrisome is the potential for legal action. Most design firms
are willing to commit, in writing, to the fact that they will not
knowingly infringe on the rights of others in preparing designs or
trademarks. By the same token, a designer cannot possibly provide legal
clearance for the actual use of a design without appropriate research
and subsequent registration with an appropriate governmental agency,
both of which cost money. For example, trademark design research on an
international scale can amount to several thousand dollars in
incremental costs. This contract makes no reference to these
industry-standard practices.
What if a design firm
chooses to perform the necessary research and add the incremental cost
to their initial quotation for the job? A good idea, but this
particular organization practices competitive bidding in all their
purchasing. Unless all firms competing for a project do the same,
adding even a few hundred dollars would almost certainly take a firm
out of the running.
Potential clients could - and often
do - argue that if the design firm performs its work in good faith and
is not negligent or intentionally tortuous, the chance of infringement
is very small. However, it still exists, as evidenced by the myriad
copyright infringement lawsuits, some of them unintentional.
As
designers, we do not create in a vacuum; we are trained to think
symbolically, along the lines of common consciousness. For example,
everyone would draw a heart to symbolize love. A very real example of
common consciousness at work has resulted from the current craze over
the "e" prefix among technology-driven businesses. Dozens of clever
designers and business people all over the world have almost
simultaneously come up with a symbol that makes the letter "e" appear
similar to the "@" symbol used in e-mail addresses. IBM's e-business is
the one presently using this symbol in its very extensive, and very
expensive, advertising campaign.
Interestingly enough,
IBM was recently sued by a French-American company called E
Technologies Associates LLC, which had been using an almost identical
trademark since April 1997, according to The Wall Street Journal. E
Technologies had applied for copyright registration on June 10, 1997,
while IBM had not filed until August of the same year. What's more, IBM
had prudently conducted extensive research and acquired rights to the
trademark from other companies. Clearly, the two businesses were not
the only ones to come up with this idea.
Thus, litigation is a
very real possibility, even when one takes the necessary precautions.
The chances may be small, but who wants to take them?
In
sum, if a design firm chooses to accept the terms of this
organization's contract, it gives up all of the rights to the art,
assumes all liabilities resulting from potential litigation, and, if it
chooses to commission appropriate research to prevent potential
infringement, it must do so at its own cost. Since this intellectual
property provision is non-negotiable, the only alternative is to
gracefully bow out of the running for a project.
Visual
artists are becoming increasingly aware of the ramifications signing a
contracts such as the one discussed here can have. While industry
associations like The Graphic Artists Guild and the American Institute
of Graphic Arts have been active advocates of designers' rights and
interests, there is absolutely no hope for an industry-wide change,
unless designers themselves refuse to do business on such inequitable
terms. Unfortunately, large corporate clients are banking on the fact
that there will always be someone "hungry enough." Thus far, they have
been right.
About this article
The above article is reprinted from Visual Arts Trends, with permission. First published in Visual Arts Trends 1f (fall1999)
About Julia Ptasznik
Julia Ptasznik is an honors graduate (BFA) and a faculty member of the
Advertising/Graphic Design department of the New York, USA-based
Fashion Institute of Technology. She has written and presently teaches
a course on Professional Practices to upper-class design students. In
addition to being the editor of Visual Arts Trends, Julia is a
freelance consultant specializing in marketing strategy development,
copywriting and graphic design. Her portfolio includes work for
companies and organizations such as the United Nations, Buick, Bertolli
USA, Sprint PCS, The Fragrance Foundation and Domino's Pizza. Prior to
starting her own business, Julia has worked on both client and agency
sides, most recently as director of communications of an international
trading firm, Atwood Richards Inc., which has offices in 32 countries.
Her previous experience includes working on design projects for the
U.S. Open Tennis Tournament, well-known apparel industry brands such as
Bonjour, and varied toy packaging accounts.
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About Visual Art Trends
With offices in New York and London, Visual Arts Trends is an
international quarterly "state of the industry" report for the creative
professional. Focusing on graphic design, advertising art direction,
photography and illustration, each report offers a brief,
business-oriented, definitive and timely overview of industry
developments that affect aesthetics, pricing, salaries, working
conditions and client relations. Visual Arts Trends combines unique
proprietary research with material gathered by monitoring hundreds of
publications, companies, membership organizations, online sources, and
other relevant sources of information. The reports review and analyzes
professional trends by business category and by specialization. In
addition, each report profiles
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