Tuesday, November 27, 2012

Illustrators Agreements & Contracts Part 2: Restrictions

Contracts that are generated by clients will always present a list of restrictions. Expect that clients will be looking after their own interests. It is important to be aware that restrictions can be negotiated, and if acceptable to all parties, be altered.

© 2012 Don Arday.
Contracts written and presented by illustrators should not be so self-deprecating. Just as clients will be looking after their own interests, it is important for illustrators to protect theirs. Some of the restrictions below benefit the client while others benefit and protect the rights of illustrators.

Illustrator Provisions

Relevant Illustrator Activities

This relates to the “expertise provided” component in Part 1. It is usually more specific and quite often works positively toward the decision to hire an illustrator. For example: When being considered for an illustration assignment with Marriott Hotels, a successful track record of illustrating for the hospitality industry, specifically for Motel 6, would be relevant, and would be a plus.

Illustrator Conflicts of Interest

Many contracts require an illustrator to disclose any potential conflicts of interest. Conflicts can occur through a personal relationship. For example: Being a blood relation or spouse of a person directly involved with the illustrator’s assignment. They can also occur due to a business relationship, either past or present. For example: An illustrator hired to produce work for Dell Computers has also recently been hired to produce work for Hewlett-Packard. It is important to note that disclosing a potential conflict of interest may not necessarily result in prohibiting the illustrator from being hired for an assignment. Conflicts can also be related to a client’s activities or a product itself. For example: I know of many illustrators that will not produce work for tobacco products, but they might for a non-tobacco company affiliate. Disclosure of potential conflicts of interest can avert consequences. See below.

Illustrator Insurance Responsibilities

Somewhat rare, but still worth mentioning, are activities that might call for an illustrator to carry special insurance. For example: Situations that pose a treat of injury such as having to climb scaffolding to paint a large mural.

Illustrator Legal Responsibilities

The illustrator’s legal responsibility is now a standard clause in nearly every contract, and it is mainly due to the improper use of copyrighted materials by illustrators for image reference. Clients seek to protect themselves against legal actions that could result from an illustrator infringing on the rights of other copyright holders, see “10 Digital Art Copyright Definitions” posted 9/11/12. Legal and monetary responsibility for any copyright violation falls squarely on the illustrator. So it is very important to be aware of copyright statutes concerning rights of ownership and the creation of derivative works.

Illustrator Outsourcing

This provides clarification for circumstances where an illustrator needs to outsource certain types of services. In most cases, where copyright ownership issues may arise, the client hiring the illustrator may need to grant permission for outsourcing to occur. And, the client or the illustrator may need to have an agreement or contract in place with the outsourced party.

Illustrator Employment Arrangement

Under most circumstances an illustrator is hired to produce work for a limited purpose. While doing so, the illustrator retains a separate status from that of a company employee. This separate business status allows the illustrator to retain the copyright ownership of the work produced.  Although a “work-made-for-hire” agreement may be for a single assignment, it is equivalent to being hired by a company as an company employee. This means that under a “work-made-for-hire” arrangement, the copyright ownership of any works produced would belong to the hiring client, not to the illustrator. The client could then control and profit from the use of the illustrations. The client could reproduce them, or create derivative works, all without having to compensate, or even credit the illustrator, see “10 Digital Art Copyright Definitions” posted 9/11/12.

Illustrator Intellectual Property

The intellectual property right refers to the ownership of the copyright of an illustration. Simply put, the right to control the usage of an illustration. The illustrator is the copyright owner, which should be plainly stated in an agreement or contract -- unless the copyright was sold as a buyout, assigned over to another party, or the work was produced under a work-made-for-hire agreement. For more information on intellectual property see “Copyright Intellectual Property” posted 11/6/12. For more information on work-made-for-hire see “10 Digital Art Copyright Definitions” posted 9/11/12.

Intellectual Property Future Use
Future use should be addressed. This relates directly to the copyright ownership. Illustrators should retain the rights to future use of the images they create, including the right to create derivative works from their original illustration. Unless specified by an image “buyout” or a “work-made-for-hire” employment arrangement, the illustrator shall retain the copyright to the illustration(s) created for a client. This means the illustrator has the right to resell the illustration, create other illustrations based on it, and use it for any form of self-promotion they wish.

Derivative Intellectual Property Ownership
The ownership of any derivative works based on illustrations produced for a client should be clarified in an agreement or contract. Relating to copyright ownership, derivative ownership conditions that are noted in an agreement, provide additional clarity and protection for the illustrator if an illustration is altered and used by a client without the consent of the illustrator.

Client Provisions

Client Intellectual Property Rights (Non-Illustrator)

Some illustration assignments become part of, or are absorbed by, the intellectual property rights of the client. There are many instances where this can occur.  Common ones involve illustrated trademarks, service marks, or illustrations applied to inventions or patents. In these instances, through contractual agreement, the copyright ownership of the client or company will supersede the copyright of the individual creating the work.

Client Confidential Information

Illustrators are considered consultants by the clients that hire them, and by the very nature of an illustrators work, clients will often provide confidential information to illustrators in the form of project input and company inside information. Clients will require that illustrators, i.e., the image consultants, not disclose any proprietary confidential information.

Client Confidential Information Content
Confidential proprietary information can take many forms such as product information and development, marketing or communication strategies, content of publications, research and development activities, company policies, inventions and technical information, trade secrets, management and financial strategies, etc.

Client Confidentiality Timeframe

The timeframe of confidentiality depends on the type of project and the type of information involved with it. In the case of an editorial illustration for a magazine, the confidentiality timeframe usually ends when it is published.

Client Property Handling

A property clause is to address the handling of property provided to the illustrator for use during the course of an assignment. This provision defines the date, cost arrangement, and method of return of company property.

Client Work Restrictions

Related to “Illustrator Conflicts of Interest” and “Client Confidential Information”, it is not uncommon for a client to limit an illustrator from providing work for a third party, usually a direct competitor, while the assignment is being produced and/or for a period of time afterwards. Through disclosure of prior working relationships with other competitive clients, an agreement limit can be appropriately managed. Agreements and contract limitations should never extend beyond what is reasonable. It is not uncommon for illustrators to be able to work for a third party, with the understanding that they be bound by an agreement or contract terms of confidentiality. Especially if the type of work done is dissimilar.

Client Non-Compete Restriction

Similar to the concept of an illustrator work agreement, a non-compete restriction goes one step furthering restricting the employment possibilities of an illustrator. It specifies that the illustrator may not become a competitor to the client. Although seemingly obvious and avoidable, illustrators should consider future opportunities that could arise before agreeing to any non-compete provision. Non-compete clauses demand careful consideration.

Here is a relevant story. A freelance illustrator completed a storyboard assignment for toy product commercial for a local ad agency. The agreement had a limited work restriction, so the illustrator could not produce a storyboard for another toy company for one year, but the agreement signed for the storyboard also contained a non-compete clause. Soon after, the illustrator was offered a staff position by a different ad agency in town, and because that ad agency had an account with a toy company, the illustrator could not accept the position without a special negotiation with the first company.

Client Restrictions Timeframe

One or more specific restrictions can be bound by a timeframe. Alternatively all restrictions can fall under the timeframe for the entire agreement or contract.


Breach of Confidentiality

In some agreements or contracts, clients reserve the right to take action against a consultant, i.e., the illustrator, for any disclosure of confidential information. Rarely limited by specification, clients prefer to leave the ramifications of a confidentiality breach, and course of action in dealing with one, open ended.

Breach of Contract

Clients reserve the right to take action against a consultant, i.e., the illustrator, for a breach of contract. This could involve a breach of one or more components, provisions or “terms” of the contract.