Property Rights

Alvalyn Lundgren
ARTICLES

Although it’s a common assumption, clients are not automatically entitled to a designer’s working files. The tools, preliminary concepts and layouts remain the property of the person producing the work. The client pays for and receives the end product, not the elements that went into creating it. It’s much like dining at a restaurant. The customer receives the end result of the recipe, preparation and cooking process, not the recipe itself. Design is a creative work that, like all creative work, is protected by copyright, which vests ownership of and rights to the work with the author (creator), even when it is created for someone else. An independently-contracted designer is the author and owner of the work he creates, including copyright, even though his client is paying him to produce it. The designer owns the bundle of rights to the work, including: the right to make and distribute copies, to display the work publicly, to make adaptations or derivative works. These rights cannot be transferred to anyone else just because they paid for the work. In order to give copyright, limited rights or a “buy-out” of all rights, there has to be a specific written assignment of copyright. The client receives rights as specified in a contract or as outlined in an invoice. Rights transferred should be appropriate to the client’s needs. It would not be appropriate for a designer to withhold rights that would compromise the client’s ability to compete in the marketplace. For example, giving limited rights to a logo design would prevent the client from being able to fully market and promote his business. Sketches, whether hand drawn or digitally created; computer files in the software of origin; and all preliminary concepts, layouts and designs up until the final, approved design are considered tools of production. Even the PDF (Portable Document File) of a business card that is sent to the the printer is not the client’s property (nor does it belong to the printer), because it is not the design in its final form (the printed business cards). When a designer is hired as an employee (independent designers are not hired unless the contract specifies a work-for-hire) and is paid a salary and benefits, then the work created in that situation would belong to the employer. Designers and production artists working at design firms, advertising agencies and corporate art departments fall into this scenario. As part of the company, the work they produce belongs to the company.

It’s not appropriate to withhold rights that would compromise the client’s ability to compete in the marketplace.

In my case, you have contracted, not hired me, and we have established a peer relationship in which we are independent of each other. I provide a final design file, and you are paying for its development, research and production. If the project involves web site design and development, you receive the site, locked and loaded, as the final design. If it’s a printed piece, you receive that piece. Anything involved up until the final result is my property. Generally, clients don’t need working files and wouldn’t know what to do with them if they had them. If the idea is to hand them off to another creative, it’s best to let that them create their own work from scratch rather than modify existing artwork. When a client hands me files created by someone else, I operate under the assumption that the client legitimately has the right to those files. Even then, I begin my own unique design for the client. If the client specifically requests the working files, it’s customary to pay an additional amount for them. Designers charge 100%–300% of the original creative fees to provide copies. This offsets potential loss of work if the client selects another designer, and places a value on the files that is separate from the value of the original creative efforts. In all cases it’s optimal to discuss specific usage and terms up front to avoid misunderstanding and confusion, and to ensure the designer’s services are appropriately valued. A client should should communicate anticipated needs when the project scope is initially determined. If a working relationship is terminated, the client should be able to purchase copies of the working files if he intends to continue using the design but anticipates changes (example: business cards for new hires at the client’s company). Be aware that certain elements of a design are never transferrable. Fonts are licensed for use, and cannot be transferred to a third party. The client should expect to purchase their own font licenses directly from the foundries. This is also the case with many stock image purchases, whether the license was purchased under rights-managed or royalty-free terms of use. Custom illustration, photography and copywriting may require separate purchase arrangement with their respective creators. Another thing to be aware of is that rights transfer only when payment has been made in full. This creates a conundrum for creative pros whose clients request or assume 30-day terms but begin using the work before they’ve paid for it. This is a violation of copyright, and requires the creative to extend credit to the client. Clients should be prepared to pay invoices immediately so that they are not using the design in violation of copyright. Contract terms stating payments due on receipt of invoice, with enforcement by the creative, allow the client to use the design immediately, and prevents the creative from incurring additional expenses while waiting to be paid. The effort which goes into developing a design, photograph, illustration or copy — from initial concept to final product — is valuable. The creative’s thinking, experience, development process and tools of their trade are proprietary. Providing a client with working files is the exception, not the rule, in professional practice.

Disclaimer: I am not an attorney and do not provide advice or counsel regarding intellectual property law. Please direct your questions to the government agencies linked below, or consult an attorney.