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Charging an Intellectual Property transfer fee for design work


Question

So, you've finished a design job (eg. a logo design) and the client asks for your IP surrounding the logo, eg copyright, original artwork files, notes, sketches, all of that stuff that went into creating the finished piece. Do you charge for this transfer? If so, how do you calculate your fee (eg. XX% of the value of the project, or perhaps a flat fee of $XXX)

Do you also hand over just the work that went into creating that finished concept, or do you hand over all of your alternate concept designs and ideas as well?

Edit: IP = Intellectual Property as defined here: http://www.ipaustralia.gov.au/understanding-intellectual-property/ip-for-designers/

2012/11/06
1
22
11/6/2012 12:15:00 PM

Accepted Answer

Any contract should clearly state what the client is purchasing rights to, what those rights are, and what the designer is retaining.

I never sell rights to sketches, preliminaries, notes, etc. They are always retained and the client is purchasing the final image/design/product only.

I will sell the rights to the final product if it's negotiated - this refers more to native files for layout such as Indesign files, layered Photoshop files, or Illustrator files. Logo projects are always assumed to include delivery of native files (vector artwork) and full rights to those files.

Fees vary based on project size and complexity, but a general rule of thumb I use is three times the fee for the project. (e.g. Design costs $500, Native files cost an additional $1500, total for design and native files $2000).

Additionally, if there are third party licenses which I own and can not transfer, those costs are added to any fees for deliverable native files. For example, I use a specific font in a print piece. Legally I can't simply give anyone the font. So, I factor in the purchase of an additional license which I will purchase for the client and include (with the associated license text) with any native files.

Final formula:
Design fee + (design fee x 3) + (third party licenses) = Fee for native files

I never sell rights to anything which is unrelated to the final design. Ever.

I would honestly be a tad wary of a client expressing interest in literally all IP - regardless of how, or if, it is related to the final design. This is especially true where logotypes are concerned or if the topic is broached AFTER a project is complete. If the contract doesn't expressly state it, we haven't discussed it before work began and pricing was based on traditional retainment of such rights. Generally such requests are made because someone, somewhere said something like... "Remember that first design with the boat, the one we didn't use. If we get that file we could use it for our other branch." I'm generalizing, but it happens often that a client sees a way they think will save them money. Whether maliciously or not, it is never favorable to supply multiple ideas/designs if they weren't initially discussed when a contract was signed.

Preliminary sketched art is a real commodity and can often be used to inspire work later for completely unrelated projects. Not directly, but reflecting on how a very early problem was solved via a sketch, which was not the direction the project went, could inspire something new and unrelated. (ooo.. what was that sketch of a dog I started to use for Client XXX and they hated.... that would work perfect here.) By selling all those preliminaries you've sold all possibility of anything even remotely associated with them. The price for such IP would be very, very, steep. But as I've posted, for me, they aren't even priced. I simply say no and point to the contract.

So essentially...

  • If you dont' use a contract. START. NOW.

  • Final deliverables - PDF, Vector art, HTML/CSS/PHP/MYSQL - that's the design fee.

  • Native files for final design (Indesign, Layered Photoshop/Illustrator files), yes I will sell them for a price. They are never free.

  • Preliminary sketches, notes, rough drafts, which were not used in the final design - never for sale.

  • Cost of any third party licenses are added to any fees for native files and any related license text is included with deliverables.

Yes, clients will and do complain. They are too accustomed to novice designers handing over absolutely anything and everything for nothing. I've had favorable discussions with clients once I explain how any such materials are commodities and it's merely fair practice to charge for relinquishing the rights to such commodities. After all unlimited future use of any and all art I create is one heck of a package.

2012/07/18
16
7/18/2012 8:52:00 AM