• Section 1: Grant of License. The extension and acceptance of the license of the copyrights (and therefore the right to reproduce and distribute the Artwork). The license pertains the product/s listed in the invoice. There license grants a perpetual personal use license agreement to be used in a personal or commercial setting. The image can not be used for commercial gain without written consent.
• Section 2: No Assignment or Transfer. Unlike an assignment, in which an owner’s entire interest is transferred to the buyer, this Agreement gives the Licensee only specic, listed rights. The Licensee is not permitted to resell or transfer its rights, which are only partially and temporarily provided. This section reiterates that fact and requires the Licensee to obtain the Licensor’s written permission if it wants to do an assignment or transfer.
• (Optional) Section 3: Territory. Delimits the geographical area in which the Licensee can use the Artwork. This is an optional section and gives the Licensor the ability to further restrict the rights it is giving to the Licensee. If this section is not included, the Licensee (subject to the terms of the Agreement) will be able to use the Artwork without any physical restrictions (i.e., anywhere it wants). If you remove this section, correct the section numbers and the references in the document.
• Section 4: Restrictions.
(a) Limited Use. Allows the Licensee to use the Artwork only in the ways speci cally stated in the Agreement. Any use beyond that is considered against the law.
(b) No Modi cation. The Licensee can’t change the Artwork in any way.
(c) Right of Review. The Licensor can review an entire Collective or Derivative Work if the Artwork constitutes more than 10% of that work. Feel free to increase or decrease this percentage amount to better suit your agreement.
(d) Limitations on Transfer. Reiterates that the transfer is of certain rights only.
• Section 5: Credit and Samples.
(a) Credit. Allows the Parties to specify how the Licensor will be credited in any reproduction of the Artwork. Use the space provided to show how you want the copyright credit to look (e.g., “Reproduced with permission from [Licensor] ([Year]). Copyright [Year], [Licensor].”)
(b) Credit of Licensor in Collective or Derivative Work. Explains that credit must still be given to the Licensor or the artist in any publications that use the Artwork.
(c) Copy of Collective or Derivative Work. The Licensee must give the Licensor a copy of any Collective Work or Derivative Work to show it didn’t go beyond the terms of the Agreement.
(d) Copies of Advertisements. The Licensee must give the Licensor two copies of any ads used to promote the Artwork.
(e) Copy of Critical Work. The Licensee must give the Licensor a copy of any writing that criticizes the Artwork if that criticism is going to be a part of the nal Collective Work or Derivative Work.
• Section 6: Fees. In most agreements, each party is expected to do something. This obligation may be to perform a service, transfer ownership of property, or pay money. In this case, the Licensee is giving money (sometimes called “consideration”) to be able to use the Licensor’s property. There are two options provided and you should select the one that best suits your arrangement. In the rst, the amount the Licensor receives will be directly tied to the Licensee’s sales. This is more applicable to a large commercial venture and may not be appropriate for small journals or other limited editions.
License Issue Fee. This subsection provides for an initial payment by the Licensee for the ability to use the Artwork. Enter the amount of this rst payment.
Royalties. This is the meat of the payment that the Licensor will receive under this Agreement, if it selects the rst option. Essentially, the Licensee will pay a percentage of every sale it makes using the Artwork to the Licensor. You can change this to be a per-unit royalty (i.e., a
set fee every time a sale is made) or make the percentage rate variable (e.g., increasing over time based on an assumption that sales will increase over time). This is a matter of negotiation between the Parties and you should discuss which arrangement will best suit you. If you select the model provided, enter the percentage that the Licensee will pay to the Licensor on these sales. The royalty payments are scheduled to be reported and paid quarterly under the terms of this subsection. If you want these payments to be more frequent (e.g., monthly), change this sentence to t your agreement.
Minimum Royalty. To make sure the Licensor receives at least something every year in exchange for its agreement to let the Licensee use its Artwork, this subsection establishes a minimum annual payment. Enter the amount of the minimum you want to establish. Note that if this payment is not made, the Licensor has the right to terminate the Agreement.
In the second option, the Licensor will receive a set payment in exchange for the license it’s providing. The Parties can make this a one-time lump-sum fee or a set of installment payments made over time. A set fee structure will limit the amount of reporting and book-keeping that need to be done on both sides, but may or may not be as lucrative for the Licensor. You can also choose to designate when
this at fee will be paid (e.g., on the date the Agreement is signed or the date on which the Artwork is reproduced, or some other designated date).
Select the option that best suits your arrangement and preferences, and delete the other.
• Section 7: Maintenance of Records and Audit Rights.
Books and Records. Requires the Licensee to keep accurate books and records about sales made pursuant to this Agreement. This is particularly important when the Parties have decided to compensate the Licensor with royalty payments. To make sure that the Licensor is receiving its due share of the sales the Licensee makes of a work that incorporates the art, it is given the right under this subsection to review the Licensee’s books.
(include only if select Option 1 in Section 6) Underpayment of Royalties. Indicates that if the Licensee pays less than what is due in royalties, it will be required to pay that amount with interest to the Licensor.
(include only if select Option 1 in Section 6) Overpayment of Royalties. Indicates that if the Licensee pays more than what is due in royalties, it is entitled to deduct the amount of the overpayment from future royalties owed. If the overpayment came at the end of the term of the Agreement, the Licensor will simply return the money to the Licensee.
• Section 8: Delivery of Artwork. Allows the Parties to specify how the Artwork will be provided to the Licensee. You may select as many or as few of these options as you like.
• Section 9: Ownership and Use of Artwork.
(a) Ownership of Work. Reiterates that the Licensor is the owner of the copyright in the Artwork, and that no transfer of that ownership is taking place under this Agreement.
(b) Validity of Registrations. The Licensee’s acknowledgment that the copyright registrations in the Artwork are valid.
(c) Limitation on Actions. States that the Licensee will not challenge the Licensor’s copyright registrations, or help a third party make a challenge against them.
• Section 10: Representations and Warranties. Each Party’s promises that certain things are true (or will be true) to motivate the other Party to enter into the Agreement. The rst three relate
to both Parties: essentially, both are stating that they have the right to enter into the Agreement and that doing so won’t violate any contract they’re a part of. The second section relates to the Licensor’s promises about the art being licensed. More speci cally, the Licensor is swearing that:
10(A): it is the only person or company that has the authority to license the Artwork. 10(B): it can give permission to use the Artwork.
10(C): the Artwork is not copied from anywhere, and has not fallen into the public domain (either because of failure to maintain the copyright or by expiration).
10(D): it has not already sold or transferred all of its rights in the Artwork to any third party.
10(E): does not believe that the Artwork has been taken from any third party without authorization.
10(F): does not know of any permissions that have to be obtained in order for the license to be granted. In other words, once the Agreement is signed, the grant will be effective without anyone else’s input.
10(G): the Artwork wasn’t created while the creator was employed by a third party. In many cases, if an individual was employed by a company and created something, the company will own that creation. This section offers assurance to the Licensees that there are no companies that will make that claim about the Artwork.
If the Parties want to include additional representations and warranties, you can do so here.
• Section 11: Documentation. This section relates to the recording of the Agreement with the U.S. Copyright Of ce. Recording here simply means sending a copy of the Agreement (together with a cover sheet) to that agency. The Agreement is valid even if you don’t record it. However, providing notice that the Licensee has the right to use the Artwork can protect it from infringement claims or claims by third parties licensees that they did not know about any other party’s rights.
Recordation. The Licensor’s promise to help with any paperwork needed to complete or record the license (e.g., ling information about the license with the Copyright Of ce). The bracketed phrases make the additional promise that the Licensor will help with paperwork for lings outside of the country. If this is not relevant to your agreement, delete the bracketed phrases.
Licensee Assistance in Maintaining Copyrights. The Licensee’s promise that it will assist the Licensor in maintaining the copyright registrations of and in the Artwork.
• Section 12: Indemni cation. A description of each Party’s future obligations if the Artwork is found to infringe on a third party’s rights. There are two options provided and you should choose the one that best ts your situation. In the rst, the Licensor takes all responsibility for infringement, promising to pay all expenses and costs relating to the claim. In the second, the Licensor makes its responsibilities conditional, greatly limiting its obligations if a claim is brought. Select only one of these options, and delete the other.
• Section 13: Termination. Explains that some actions or events, including certain wrongful actions on the part of the Licensee, will cause the Agreement to end early.
(a) Termination Procedures. Note that there are speci c actions that will automatically terminate the Agreement. These are all actions that relate speci cally to the Licensee’s use (or non-use) of the Artwork, and this provision allows the Licensor to maintain control over (and protect the value of) its property.
(b) Effect of Termination. Provides that after the termination of the Agreement for any reason, the Licensee must stop using the Artwork, any Collective Work, or any Derivative Work. If there are already printed books or periodicals, the Licensee can sell those for a certain period of time. Enter the amount of time the Licensee has to make those additional sales. Note that there
is an optional bracketed provision, which is applicable only if you selected the royalty form of payment in Section 6. This provision says that should the Licensee sells existing reproductions of Artwork, Collective Works, or Derivative Works, the Licensor gets royalties from those sales. Delete this clause if it doesn’t suit your arrangement.
• Section 14: Successors and Assigns. States that the Parties’ rights and obligations will be passed on to successor organizations (if any), or organizations to which rights and obligations have been permissibly assigned.
• Section 15: No Implied Waiver. Explains that even if one Party allows the other to ignore break an obligation under the Agreement, it does not mean that Party waives any future rights to require the other to ful ll those (or any other) obligations.
• Section 16: No Agency Relationship. Explains that the Parties are not in an agency relationship or any other relationship except for that of a licensor and a licensee. This is an important legal distinction, and is emphasized in this Agreement so that additional obligations are not pushed onto the Parties by law.
• Section 17: Notice. Lists the addresses to which all of cial or legal correspondence should be delivered. Write in a mailing address for both the Licensee and the Licensor.
• Section 18: Governing Law. Allows the Parties to choose the state laws that will be used to interpret the document. Note that this is not a venue provision. The included language will not impact where a potential claim can be brought. Write the applicable state in the blank provided.
• Section 19: Counterparts / Electronic Signatures. The title of this provision sounds complicated, but it is simple to explain: it says that even if the Parties sign the Agreement in different locations or use electronic devices to transmit signatures (e.g., fax machines or computers), all
of the separate pieces will be considered part of the same agreement. In a modern world where signing parties are often not in the same city - much less the same room - this provision ensures that business can be transacted ef ciently, without sacri cing the validity of the agreement as a whole.
• Section 20: Severability. Protects the terms of the Agreement as a whole, even if one part is later invalidated. For example, if a state law is passed prohibiting choice-of-law clauses, it will not undo the entire Agreement. Instead, only the section dealing with choice of law would be invalidated, leaving the remainder of the agreement enforceable.
• Section 21: Entire Agreement. The Parties’ agreement that the document they’re signing is “the agreement” about the issues involved. Unfortunately, the inclusion of this provision will not prevent a party from arguing that other enforceable promises exist, but it will provide you some protection from these claims.
• Section 22: Headings. Notes that the headings at the beginning of each section are meant to organize the document, and should not be considered operational parts of the agreement.