In what appears to be a frequently occurring situation, publishers seem to pay cover artists and illustrators to do work on the publisher’s books without having a legally sufficient writing covering the issues about who owns the rights to the artist’s/illustrator’s work as well as other clauses. (I will, in this article, refer to this legally sufficient writing as an “agreement” or a “contract” but it does not necessarily have to be a formal agreement or writing although it is much, much better to have a formal agreement. See “Playboy and the Work Made For Hire Agreement”) Or no contract at all. In such a situation, the publisher loses and the artist/illustrator wins.
Here is the basic premise of the United States’ copyright law: the creator of any copyrightable work owns all rights in and to that work unless, if there is to be an exclusive transfer of some or all of those rights, there is a sufficient, written agreement, signed by the creator, transferring some or all of those rights to another. And the publisher wants exclusive rights since non-exclusive rights may be not worth very much. Non-exclusive rights may be transferred orally but there still must be some form and evidence of an intent to actually transfer any rights. Without an agreement to transfer, the publisher owns no rights because there has not been a transfer. That agreement can be oral or written but if the publisher is to acquire exclusive rights, it must be written and signed by the creator.
This means that if you, as a publisher, have not entered into a legally sufficient written agreement with your artist/illustrator, you as the publisher probably own no exclusive rights in and to the work done by that artist/illustrator. And without exclusive rights, you may not be able to make any deals to exploit that cover or illustrations since the market for non-exclusive rights is often illusory. This means that as a practical matter, you probably own no real rights to use the artwork except on the cover or inside of the book but not for any other use whatsoever—not for use on the Internet, not for use in merchandising, not for use in marketing. You probably have no meaningful rights to translate your book containing that art into other languages nor any rights to make reprint deals in the English language anywhere in the world on that book. You probably have no exclusive right to use that artwork in book club editions nor other editions of the work. You probably cannot do a soft back book if your original edition was hard back. Nor vice versa. You probably cannot create derivative works based upon that artwork and those derivative works can be of extreme importance. For example, you probably cannot use that artwork from the book and create a CD-ROM from the book. You probably cannot use that artwork from the book to turn the book into a Saturday morning children’s television program. And so on. In sum, you probably have no meaningful rights to use the artwork in any manner except perhaps the non-exclusive right to use the cover or internal art in or on the particular edition of the particular book for which the artwork was done. And if there has been only a payment to the artist without any agreement, even an oral one, it is not clear even if there has been any transfer of even non-exclusive rights.
And what having no such exclusive rights means is that you are probably without any meaningful opportunity to reuse the art, especially the cover art, for any other purposes or in any other markets, which means that may have missed out on a potentially huge source of income. Cover art for example, can be extremely valuable and the owner of those exclusive rights in the cover art may be in a position to reap large rewards as a result of that ownership.
BUT I PAID FOR IT!
The response of many publishers is "But I paid the artist for the work. Therefore, I must own it."
And the response to this response is: merely paying for the work creates no right of ownership of the rights in the work. The mere ownership of the physical embodiment of a copyrightable work does not create the ownership of the underlying rights in that work. That is more basic United States copyright law. There must be evidenced an intent to transfer rights, whether orally or in writing. Thus, the best evidence of that intent is a written agreement.
Moreover, if you read what little paperwork is often generated in this type of transaction—an invoice from the artist/illustrator to the publisher—you may find an express statement to the effect that the artist/illustrator retains all rights to the artist/illustrator’s work. And even if there is no such statement, that is the effect of the United States copyright law because there is no express transfer of rights in a valid, written, signed agreement.
Additionally, what also seems to occur is that the publisher wakes to the fact that the publisher needs a contract after the work has been done and after the money has been paid to the artist/illustrator. In my nearly quarter of a century of practicing law, it is my experience that coming then to the artist/illustrator and trying to get that artist/illustrator to sign a contract after the fact is often quite expensive compared to the deal that could have been made had the contract been done in advance of the work being done and the money being paid. This does not make the artist/illustrator evil, just a good business person. It is the nature of free market capitalism that each side protects their rights to the fullest and if the other does not, then it is the other’s fault.
WHAT KINDS OF WRITTEN CONTRACTS ARE NECESSARY?
The artist/illustrator’s contribution can perhaps be the subject of a work made for hire contract since it is likely that the publisher "specially ordered and commissioned" the artist/illustrator’s work and that the artist/illustrator’s work may fall under one of the legally acceptable categories of work made for hire situations, and that the contract is sufficient in language to qualify as a work made for hire. But preparing a work made for hire agreement requires certain very specific language and you should read "Work Made For Hire Agreements" and "Playboy and the Work Made for Hire Agreement" on my site for more of the details.
The contract between the artist/illustrator and the publisher may also be a transfer of some or all of the rights but it must be sufficiently broad to include language transferring these rights to the artist/illustrator’s work exclusively to the publisher, if that is the intent of the parties. And the rights must be clearly set forth, in express language, so that both parties understand the meaning of the transfer. A contract is supposed to solve more problems than it creates and if the language is vague and uncertain, the contract may become the source of dispute and litigation, thereby tying up the rights for a long time.
In these contracts, and in the underlying deal, the artist/illustrator can adjust his or her price to reflect a larger transfer of rights to the publisher. This can be in the form of a flat fee, a percentage of the rights exploitation or some variation on those themes. Therefor, this type of transaction is one in which both sides can win. But the publisher must be given the exclusive right to control, administer and exploit the rights even if the artist/illustrator participates in the income from such exploitation. Without this exclusive right to administer, you have a potentially confusing situation, one in which both sides may exploit the rights and the net effect is that neither side can effectively do so.
Publishers frequently seem to approach their relationships with artist/illustrators without the benefit of a valid, written contract. This can only inure to the benefit of the artist/illustrator and to the detriment of the publisher. This one-sidedness can be avoided quite easily by the simple exercise of sound and wise business planning in the form of a valid, written contract.
If you are a publisher, protect your rights and have such a contract done before you start paying out any money.
© 1998 Ivan Hoffman. All rights reserved.
This article is not legal advice and is not intended as legal advice. This article is intended to provide only general, non-specific legal information. This article is not intended to cover all the issues related to the topic discussed. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. This article is based on United States law. You should consult with an attorney familiar with the issues and the laws of your country. This article does not create any attorney client relationship and is not a solicitation.
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