5 Key Terms for Artwork Licensing Agreements
Written by  Daisie Team
Published on 6 min read


  1. What is copyright?
  2. How to define licensing
  3. What is royalty?
  4. How to identify territory
  5. What is the term of license?

Artists, ever thought about making your art go the extra mile? Let's talk about artwork licensing agreements. In the world of art, it's more than just about creating beautiful pieces. It's also about understanding the business side of things, particularly when it comes to sharing or selling your art. So, buckle up, because we're diving into the five key terms you need to know about artwork licensing agreements.

First up in our art-business lingo is "copyright". In simple terms, copyright is like a superhero shield for your artwork. It protects your art from being used without your permission. Let's break it down a bit more:

Ownership of Original Work

As the artist, you automatically own the copyright to your artwork the moment you create it. This means you have the exclusive right to:

  • Reproduce the artwork
  • Distribute copies of the artwork
  • Display the artwork publicly

Copyright protection kicks in as soon as your artwork is created and fixed in a tangible form. This means that your artwork is protected from the moment you put brush to canvas, pencil to paper, or click "save" on your digital art program. No need to register anywhere or get a special certificate!

Now, you might be wondering: "How long does this superhero shield last?" Well, in most cases, copyright lasts for the artist's lifetime plus 70 years. That's a long time to ensure your artwork stays protected!

And yes, you can transfer your copyright to another person or company. This is often done through something called an "artwork licensing agreement". This agreement lets someone else use your artwork, but under rules that you set. But more on that in the upcoming sections!

Remember, understanding copyright is a crucial first step in navigating artwork licensing agreements. It's your art, your rules. So, protect it well!

How to define licensing

Now that we've got "copyright" under our belt, let's move on to "licensing". If copyright is the superhero shield, think of licensing as lending that shield to someone else, but under your terms and conditions.

The Basics of Licensing

Licensing is like saying, "Hey, you can use my artwork, but let's set some rules first." When you license your artwork, you're granting permission for someone else to use your work. However, you're not giving them the copyright. That still stays with you.

  • Exclusive Licensing: This means only the person or company you've given the license to can use your artwork.
  • Non-exclusive Licensing: In this case, you can license your artwork to multiple people or companies at the same time.

Defining the Scope of Licensing

Defining the scope of a license means setting the 'what', 'where', and 'how' of using your work. In an artwork licensing agreement, you can specify:

  1. What: Which of your artworks are being licensed?
  2. Where: Where can the licensee use your artwork? This could be in a specific country, multiple countries, or worldwide.
  3. How: How can they use your artwork? This could be for a specific product, multiple products, or any product they want.

Payment for Licensing

And of course, there's the payment part. You should always be compensated for licensing your artwork. This compensation is often known as a "royalty", which we'll discuss in the next section.

Licensing is a vital part of artwork licensing agreements. It allows your art to reach new audiences and markets, all while ensuring you maintain control over how it's used. So, don't shy away from licensing - it could be a game-changer for your art career!

What is royalty?

Alright, let's dive into the next term that often pops up in artwork licensing agreements – royalty. If licensing is the permission to use your artwork, then royalty is the rental fee they pay for that use. Pretty straightforward, right?

Understanding Royalties

Royalties are the payments you receive when someone uses your licensed artwork. These payments can be a fixed amount, a percentage of sales, or a combination of both. It all depends on what terms you set in your agreement.

  • Fixed Amount: This is a set fee that the licensee must pay you, regardless of how much they profit from the use of your artwork.
  • Percentage of Sales: In this type of agreement, you get a certain percentage of the sales revenue generated by the use of your artwork. So, if they sell more, you earn more.

When are Royalties Paid?

Another important aspect of royalties is when they are paid. Some artwork licensing agreements might stipulate that royalties are paid monthly, quarterly, or annually. This is something you'll want to negotiate and specify in your agreement.

Minimum Guarantee

In some cases, you might come across a term called "minimum guarantee". This is a minimum amount that the licensee agrees to pay you, even if they don't sell a single item with your artwork. It's like a safety net for your earnings.

Remember, royalties are your reward for letting others use your art. So make sure you understand how they work and negotiate a fair deal in your artwork licensing agreements. After all, your creativity is worth every penny!

How to identify territory

Okay, we're making great progress! Now, let's move on to another key element of artwork licensing agreements - territory. The territory in your agreement refers to the geographical area where your licensee can use your artwork.

Why is Territory Important?

The territory can be as broad or as narrow as you want it. It could range from a single city or country to worldwide rights. Why does this matter? The scope of the territory can significantly impact your earnings and control over your artwork's use.

  • Local Territory: This could be a specific city or region. It's a good option if you want to limit the use of your artwork to a specific local market.
  • National Territory: This allows your licensee to use your artwork anywhere in a specific country.
  • Worldwide Territory: This gives the licensee the right to use your artwork globally. It's a broader agreement that could potentially bring in more royalties.

How to Define Your Territory

When defining your territory in your artwork licensing agreements, be specific. Don't just write "worldwide" if you only intend to license your artwork in certain countries. Instead, list each country individually. This gives you the control and flexibility to license your artwork in other countries separately.

Exclusivity and Territory

One more thing to consider: exclusivity. If you grant an exclusive license, it means that no one else but the licensee can use your artwork in the agreed territory. If it's non-exclusive, others can also license your artwork in the same area. So think about what works best for you and your art.

Knowing how to identify and define your territory is a key step in securing a beneficial artwork licensing agreement. So, take your time, weigh your options, and make an informed decision.

What is the term of license?

Alright, let's move forward and discuss the term of license, another vital component of your artwork licensing agreements. The term of license is simply the length of time for which the license is valid. It can range from a few months to several years, or even be indefinite.

Defining the Term of License

When defining the term of your license, you should consider how long you want your artwork to be used by the licensee. You'll need to strike a balance - a term that's too short may not be attractive to potential licensees, but a term that's too long could limit your future opportunities.

  • Short-term License: This is a license that lasts for a short period, usually a few months to a year. It's a good choice if you're testing the waters with a new licensee or if your artwork is tied to a specific event or season.
  • Long-term License: This is a license that lasts for several years. It's suitable for more established relationships or if your artwork has a timeless appeal that won't fade with time.
  • Indefinite License: This is a license with no set end date. It's less common in artwork licensing agreements and gives the licensee the right to use your artwork forever.

Termination Clause

Regardless of the term you choose, it's always smart to include a termination clause in your agreement. This clause allows you or the licensee to end the agreement before the term expires, under certain conditions. It's like an exit door that protects both parties.

Understanding the term of license is crucial for maintaining control over your artwork and ensuring it's used in a way that benefits you both now and in the future. So, when crafting your artwork licensing agreements, make sure the term of license aligns with your goals and expectations.

If you're looking to understand more about the world of artwork licensing agreements, don't miss the workshop 'How To Start Licensing Your Art' by Rachel Christopoulos. This workshop will guide you through the process of licensing your art and provide you with valuable insights into the key terms and principles you should be aware of in the industry.