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/

Answer 1

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.

Answer 2

Where a logo is concerned, or similar identity material, the client would have to be very naive, or very foolish, and the designer unethical, not to ensure that all rights in the finished design are transferred to the client upon acceptance of the finished work. As the designer, you never lose the right to display in your portfolio (including your website) a logo or other work you created, but the client must have exclusive, perpetual and transferable rights to their logo.

For other types of work, the exact transfer of which rights would be a matter of negotiation, preferably when the contract is made. Where stock photography is concerned, its license would have to be part of that. Royalty free images are licensed on a non-exclusive basis, as are the many templates licensed for web and print use. If these are part of the work, those licenses remain intact even if the rights in final design are transferred.

A client should have the confidence that you won't take the design they paid you for and sell it to someone else. That's what transfer of copyright is about. On the other hand, designs that were rejected are not part of the product that the client has contracted for, so those remain the copyright of the designer.

That the rights are transferred doesn't mean that all the materials (sketches, rejected alternates, etc.) must be handed over. If there's any doubt, consult a lawyer in your jurisdiction.

Answer 3

That depends on what was agreed upon. But most designers sell their finished artwork with all the files neccesary to produce the design. For example: a logo should always be handed over in vector format, but you can flatten it and clean it up so your drafts, alternatives and fonts aren't in the file anymore. For a website it depends on how it is made. Sometimes the dimensions, finished slices and colorsets are enough. A layout can be handed over as PDF.

I never hand over my working files unless it is agreed upon and charged extra. Plus, you have to protect the sources that went into the project as well. Using a brush set that you purchased but that isn't allowed to re-sell? Can't give that away.

How much? Well, you have to evaluate the know-how and investment that went into it. Complex InDesign File that took you forever to set up? Expensive brush set? Used elements that can be easily re-used but are hard to make? Ask more.

Additionally, it also depends on the circumstances. "Hand everything over" will probably not have a positive or cheap answer. "Can we have a copy of the handdrawing you made of our logo so we can hang it prominently?" will most likely be done free of charge.

Answer 4

An addition to the current answers:

Besides the choice you'd like to make, there is also the moment, when to make that choice (getting the question afterwards might mean that it should have been discussed earlier). I think there is an important part to solve in the communication proces with clients. Maybe having a contract is not enough. It ensures a clear position within the conversation, but it does not communicate well enough for the actual conversation.

So both timing and communication could be improved as well.

For example it is good to have a nicely designed white paper – pdf, with clear and short text and some proper graphics. To inform the clients about the options he can go for. After all, this is what we do for others and what we are good at, we might as well do it for our own businesses too!

This (or a similar) way the option to go for has been chosen and is assured to be covered, before you've even started making your quote. And the best thing about it is, you will never get this question again.

Answer 5

This is the way I see it. The work is the clients. They paid for it, so they should receive the final files. In the end, the final project is basically the collected final files. So the client already should have the final files of all their projects.

It's like double charging for a product that was already bought. I don't like it to be done to me, nor I would do it for my clients.

On the copyright, yes you do have copyright for the work you originally created from the group up. But once everything is said and done, you have to tread carefully. Because a lot of projects contain content that was given to you by the client, content that is their intellectual property. So keep that in mind too.

In my humble opinion, I suggest to give them the final files of each project that was submitted. No more and no less. All your conceptual and draft work is yours, not theirs. As for payment, charge them your time to collect all the files and cost of media to deliver them. Be fair and try not to burn a bridge that may help you in the future.

I'll put it to you this way. I have been a designer since 94'. 89, if we count my internships. I have burn bridges, but I learn that it's not worth losing a potential future resource over files you cannot really use for another client. I cannot tell you how important the people I have worked within the past 20 some years have been to my career in the past five years. All I am saying, don't be a jerk about it. Because you never know when you may need that client as a resource in the future.