Protect Your Art With a ‘Shopping Doc’

14 02 2014

red heart sheildMany years ago I remember the first time I heard a manufacturer say, “I’d like to ‘shop’ your art around and see if we can get some interest from retailers.” Since then I’ve heard it 1000’s of times, as it’s become a very common practice in the art licensing industry.

As the economy hit below the belt, manufacturers needed a way to hedge their bets.  They no longer wanted to create volumes of inventory that might not sell quickly. This saves them up-front manufacturing costs, warehousing space, time, and of course, prevents them from having to ‘eat’ the cost of goods that don’t sell.

On the artist side, it poses some problems.  Manufacturers are now asking for high-resolution art to create sophisticated mock-ups, and to often produce a very small quantity of product in order to make their retail presentations.  If the retailer ‘buys in,’ then you could have yourself a licensing deal, but if not, the art is already in the hands of the manufacturer and you have no deal and few recourses to ever get digital art destroyed.

So without so much as an agreement, how can you be sure that manufacturers are not utilizing your exclusive art to sell larger quantities of products?  Well, I think there are many (and mostly) reputable manufacturers, who wouldn’t consider taking your art without paying for it.  But there is always someone willing to take advantage of the situation.  And it would make you would feel very vulnerable to send final art to someone when you don’t have a formal agreement.

With my lawyer, I created what I call a ‘Shopping Doc.’ It’s a short document that I can use when this type of circumstance occurs.  It all boils down to keeping track of what the manufacturer said they will do, and what you said you will do, just as with any contractual arrangement.  This is just a short letter, in which you give the manufacturer permission to ‘Shop’ your art to retailers with specific restrictions. It is very clear, in that, a manufacturer has only the right to shop

a) specific pieces of art,

b) for a certain amount of time, and

c) to listed retailers.

It also specifies that you retain the rights to your art AND it allows you to choose between whether or not you will continue to show the art to other manufacturers, during that same time period.  For the manufacturer, it does not obligate them in any way to concluding a deal with you.  So if things do go well, then you just move to a deal memo or straight to a licensing contract.

I believe that whether you use this form, or make up your own, it’s the best way to keep track of your art and what the manufacturer is doing.  It also gives you a detailed time frame in which to follow-up and determine how things are going and what the next steps should be. I find that, in general, keeping everyone accountable is really important. Also, deals are more likely to get signed.

Feel free to click here and get your copy of my ‘Shop Doc’ and to adapt it to your own situations.  No legal document is fool-proof, but it does help provide guidelines in which the manufacturer has set responsibilities with your art during the ‘shopping’ period. It also gives you the peace of mind that comes with knowing there is an end to their ‘shopping’ process, which would be enforceable in court if required.

I hope it makes your heart feel a bit more protected today, too.





Rule #7

10 10 2011

Get sound business advice before sound legal advice.  

This one is a little tricky. Licensing artists definitely need a good IP lawyer—that’s an Intellectual Property lawyer. But there are definitely ways of keeping expenses in check. For example, making sure you understand your business first, before you get the lawyer involved, is one great way to keep your costs down.

Every person who hires a lawyer is looking for legal advice, but few lawyers will provide business advice. First learn the business of Art Licensing through classes, coaching, blogs, articles, and by researching online. Everything you learn about the Art Licensing business is going to save you time and money in the long run.

Educating yourself about standard terms, royalties, advances, agreements, art development, approvals, product design, manufacturers, line development, production processes and retail distribution will be invaluable when it comes to creating contracts. This is because, while the lawyer can create the contract, they don’t know what business decisions are right for you (the licensor) and your business partner (the licensee).

Let me repeat that: your lawyer can create a contract, but they can’t possibly know what business decisions are right for you and the manufacturer. And every contract has a significant part of it which requires art licensing business decisions, such as the royalty rate, advance, grant of rights, territory, length of the agreement, to name a few. These are the ‘terms’ that the licensor and licensee must ‘plug’ into the contract, and they should not (generally) be recommended by your lawyer.

So back to Rule #1 of our ’20 Rules for Starting Your Art Licensing Business’—learn as much as you can about the Art Licensing business, and I recommend getting advice from licensing experts, as well as colleagues, manufacturers and fellow artists who have experience in the business. But don’t expect a lawyer to give you advice on the business terms for your contract.








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