Illustration Licensing 101

Or, what to factor into your project pricing

Fellow illustrators often ask me to speak on the subject of licensing. I’ve spoken about it at conferences, on podcasts and in presentations to college classes, and I am always met with wide eyes, thankful emails and follow-up-questions.

I’ve summarized the bulk of my talks below as a free resource for anyone who is on the hunt for this information.

Please note: I am not an attorney, this is all researched and learned experience after 10+ years in the field. Laws differ by country, so it’s best to double-check laws in your own domicile when applicable. Additionally, this does not speak to Graphic Design, and is only applicable to illustrations, which are legally considered bespoke artwork.

What is Illustration Licensing, exactly?

Licensing, sometimes referred to as Usage or Rights, is an agreement between the Illustrator (Licensor) and their client (Licensee). The agreement allows the Licensee to use the illustrated work (the Art) in a commercial capacity.

In plain English: You allow your client to use your illustration in exchange for payment.

The terms of the License (The Terms) are negotiable between both parties and may include many factors, which I’ll go into below.

Who licenses illustrations?

You may choose to license your Art for a wide variety of purposes. Companies license illustrations to be used on packaging, in advertisements (print and/or digital), for textiles, website graphics, clothing, homewares, paper goods like invitations and stationery, etc.

Ok, but is there an actual “license”?

Well, yes and no. A license is a document both the Licensor and Licensee sign that clearly states the terms of the agreement. Sometimes this is a very formal, legal document drafted by an attorney (usually provided by the client), but it may also be a signed contract or Statement of Work (SOW) clearly stating the terms of the agreement.

Do I need to register my illustrations?

Again, yes and no. Your illustrations are inherently copyrighted to you the moment you create them. You own the intellectual property and you own all rights to the art without having to register them anywhere.

How to protect yourself:

• Keep screenshots / records / dated files + examples of your original works.

• You may choose to watermark your designs

• In the case of patterns: consider warping the versions you put on the internet, making the repeat much harder to edit / copy.

In a case of copyright infringement, registering / copywriting your work can make the whole nasty process a lot easier to defend, and typically you cannot file a claim against someone else until your copyright is registered.

The easiest / cheapest way to register your artwork is after you have created it, but BEFORE you have published it. Copyright.gov allows you to register up to 10 pieces of like-kind, unpublished works at a time with a shared fee (this saves you some serious cash). You can still register single pieces after they are published, but it only allows one image at a time, for a flat fee of $65, which can really add up.

Look closely, and you’ll see the same leopard licensed between two clients. First, designer cocktail glasses in Germany. Second, a large outdoor installation in England.

Factors that impact the cost of licensing illustrations:

When you’re coming to terms on a licensing agreement, it is important to consider all of the following:

Duration / Time

Geographic / Region

Type

Exclusivity

Let’s dive into each one individually below:

Duration / Time - How long will the Art be in use?

Is the Licensee a new company / start-up? Is this a holiday or limited-edition packaging project? Consider that each case is unique in the duration the Licensee may need to use your Art.

Here are some of the Licensing Terms I offer:

12 or 18 month:

The shortest license available. This is a great option for many start-ups or new brands who need to limit overhead spending as they launch their brand.

2 year:

Ideal for limited edition / special edition projects. Because, if it’s Holiday 2022, the Licensee likely doesn’t need to use the artwork after the holiday season ends. This term length allows time for the artwork to be produced, printed, sold, and to ensure no competitive products with the same design will be in the market for the duration of the licensing term.

3-5 year:

Will your Art be used prominently, as the core aesthetic of the brand? In this case, a longer licensing term is most appropriate.

Perpetuity:

Forever. And ever. And ever. Candidly, most packaging clients request ownership / exclusive* use in perpetuity. Remember, this takes away any rights you have to re-license the work at a later time, and thus it should be priced accordingly.

*I’ll go more into exclusivity below.

I completed this illustration for the Los Angeles Times in 2022. We agreed to an exclusive one-year license, which means that when the agreement expires, rights to the artwork will revert back to me, to use however I see fit.

Geography / Region - Where will the Art be used?

Assess whether the Licensee will need to use the Art globally, nationally, regionally or locally (limited).

For example:

Let’s say your client is a small, artisanal coffee shop in Boise. You charge them a low, flat-fee for licensing your artwork because, hey, it’s a local business!

2 years later, they pick up a distribution deal through Whole Foods, yay! Suddenly, packaging with your artwork on it is being sold in 500 stores across the country. Your work is valuable: it’s appealing to customers! Unfortunately, you would have no claim to limiting the artwork distribution or charging more.

Instead: offer a regional license to your smaller clients that applies to everywhere they currently distribute. Include very clear language and/or a price list so your client knows what to expect should their distribution ever substantially scale up.

Same goes for national clients: do they distribute only in North America, or do they anticipate distributing globally at any point? Have an honest conversation and structure your deal accordingly.

Type of License - What is being produced?

Is this for advertising / display only?

Is this going to be produced and sold on for-profit products?

Is this for promotional products only (not for sale?)

Is this being used for 10 t-shirts, or 50,000 t-shirts?

Understand the exact needs of your client / the Licensee, and exactly how and where they intend to use your Art.

Example:

You license a design to a brewery, which they tell you they will use on their 6-pack of cans. Weeks later, they start selling shirts, hats and tote bags with your design on them.

Yes, it’s cool to see your artwork in so many places, but it may not be what you agreed to. Clearly state the type of license your client has. State that—should these desire to produce additional products—they would have to extend their license.

You could structure it in the following way:

($) Packaging only

($$) Packaging + promotional (not for sale items)

($$$) Packaging + retail items

Exclusivity

Exclusive:

While your client / Licensee holds the license, they are the only one that can use the artwork for the agreed-upon length of time.

Non-Exclusive:

Your client / Licensee may use and produce the artwork, but you are free to continue licensing the Art elsewhere during the same time.*

*I offer non-exclusive licenses based on industry. So if I license a non-exclusive design to be used on fabric, I won’t license to another fabric company for that duration, but I could license the artwork to be used on wallpaper, glassware, greeting cards, etc. This is a personal decision, and one you should discuss clearly with your client(s). It’s best to be clear with anyone who licenses your work, especially if it may be in the same or similar industry.

On the left + center, a spread from Nature Conservancy Magazine that I illustrated. Because I offered a non-exclusive license, I am also able to offer the artwork as a print in my own shop, as shown on the right.

Examples

Here are some examples of licensing agreements, considering all of the above:

• 3 year, exclusive license for display-only, North America (The Licensee can use the Art in advertisements, not for-profit products, in North America, for 3 years, and they are the only one who can use the Art during that duration.)

• 18-month non-exclusive fabric license, global (The Licensee can use the Art on fabric that they can sell and produce around the world for 18 months, but you are free to also license the artwork elsewhere)

• 12-month exclusive product packaging license, US + Europe (The licensee can produce and sell products featuring your Art for a duration of one year, in the United States and Europe, and you may not license the Art elsewhere during that term.)

What is “Full Buy-Out”?

Full buy-out is the whole shebang. Essentially it means World-wide, Exclusive, in Perpetuity. You may not license your Art to anyone else, ever again, anywhere, for forever.

Full Buy-out isn’t necessarily a bad thing (Real Talk: 75% of my clients request it), but it should understandably be priced accordingly.

What is “Work-for-hire”?

Work-for-hire (or Work-made-for-hire) is Full Buy-out, it’s just called something else and is used to justify underpaying artists for their work. Work-for-hire should be priced just as high as Full Buy-out, but is unfortunately one of the lowest-paid categories of work for any designer / illustrator. Be very weary signing a Work-for-hire agreement, as it strips the creator of all rights to their work in perpetuity.

Ok, but how do I price all of this?

I generally price using the following calculations, thought I’m sure that—based on the above—you understand this can vary vastly depending on duration / geography / products being produced, etc.

Artwork Creation + Value (Licensing) = Price

Artwork Creation: 

The cost of producing the artwork based on your time, effort and skill level. Consider: research, size, style, sketches, anticipated revisions, final artwork delivery. 

Sometimes this is based on your hourly rate, sometimes it may be a flat-fee.

(Understand, for instance, that my illustrations usually take 30 hours minimum, so if I used an hourly rate my fees would be astronomical. For someone who does, say, minimalist line illustrations and has spent a lifetime perfecting that style: should they be punished by using an hourly rate as a base fee? Not on my watch!)

Value / Licensing:  

The cost for the client to use your artwork commercially. Top-level, this is the value of your artwork to the client: the products they sell and the story they tell. Great design creates brand recognition, sells products and catches the attention of their audience. Concretely, this is a number based on the factors listed above in this blog post.

A small (limited) license may be around 50-100% of the Artwork Creation fee. (So, perhaps a 12 month license, or a very small production run of promotional items, regional use only.)

A non-exclusive or mid-sized license may be around 75-200% of the Artwork Creation fee. (Yes, this is a wide range. Again, SO MANY FACTORS.)

A full buy-out is likely between 200-300% of the Artwork Creation fee. This is industry standard.

An example quote structure is below. (Go ahead and steal it: I made it. I don’t mind.)
Imagine ticking the corresponding box for each option, either to facilitate the conversation with your client, or after you’ve got an idea of what they require.

Remember, the client-artist relationship should be a happy, respectful one. Most issues arise due to unmet expectations on one end or the other. Don’t be afraid to have open, candid conversation about expectations before a project begins.

Do I need an agent?

I do not have an agent, and never have.

You can do all of the above entirely on your own. In many cases it may be much easier to have an agent advocating for you, registering your copyrighted work and generally being in your corner, but that does not mean it’s the only way to successfully license your illustrations. (Also, they take a cut of the $)

Additional Reading:

I’ve said it once and I’ll say it a thousand times. The Graphic Artists Guild Handbook, (16th Edition at the time of this writing) is one of the best investments you can make as an independent artist. READ IT.

As for me, you can always find my most up-to-date work over on instagram @littlepatterns. If you’re looking for bespoke illustrations for your brand, please reach out to maggie@littlepatterns.com to discuss further. And thanks for reading! It’s even more exciting to work with clients who understand the business side of illustration.

How you can support me as a working artist:

• Purchase a print from my online shop: littlepatterns.com/shop (I make ~$11.50)

• Purchase one of my coloring books: colorflowerscape.com (I make ~$.60)

• Follow me on Instagram @littlepatterns, and don’t be a stranger. Comment, engage, and share with your friends!