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In my last article (Copyright Basics 1), I explained how copyright covers most of the work created by graphic designers, and the basic principle behind licensing according to limited usage. Licensing is the key to making more money from your work.

This is fine in theory, but one of the biggest hurdles designers face to implementing the licence is communicating with clients.

Bad communication causes 90% of the designers' legal disputes that we handle.

To do it properly, you will need to understand this fact: most clients do not understand copyright.

From my experience, size does not matter. We have negotiated contracts for and with the biggest multinational consumer product companies, and have found that they do not understand copyright. The same goes for experienced businesspeople. Copyright is a new problem, and has only recently become an issue. Even the average lawyer is no wiser. Copyright is an optional subject at law school, so most lawyers don't understand it either.

Darren Woolley, former president of the MADC and former Creative Director of JWT Melbourne, has a great saying: "Copyright is like sex. You learn about it in the playground, and most of it is wrong".

Like sex, copyright is surrounded by fear and misunderstanding.

Because people in large companies do not understand copyright and are driven by fear, they go to lawyers in big firms for advice. Because most of these lawyers do not understand how design is purchased, they make guesses about how the process works. And end up preparing contracts which have an idealised (from their point of view) version of how design is purchased.

For example, a common clause states that "copyright in all work created for the client vests immediately upon creation in the client".

This means as soon as you create something, it is owned by the client. The client may not even have to pay for it. The moment you save the file, the client can theoretically order you to send it to them, and they can do whatever they like with it.

Including taking the contract off you and giving it to another designer to work on.

Because the client owns copyright "immediately upon creation", it means the client owns all concepts and ideas. You may come up with 20 different ideas for a potential logo. The client may only approve one to proceed, rejecting 19. But the client owns the rights to all 19, and can sue you if you use any of them as a basis for another client's logo.

Often it is physically impossible to transfer all copyright to a client. You may not own it. Stock illustration or photography is an example. The stock image library (or the illustrator or photographer) owns copyright. That does not matter. A nasty client can force you to pay for full rights to the image.

All this from just one clause. One example of a company which uses similar clauses in its supplier contracts is Telstra.

There are several other problematic 'standard' clauses in the average large client contract. An example is a clause which make you pay hundreds of thousands in clients' legal fees if a competitor sues them over a logo (but through no fault of your own). Or clauses which say that you are responsible for mistakes even if the client has signed off on work. Or clauses which stop you from using work in your folio. So you will often need to factor in legal fees for you to engage a copyright lawyer to negotiate changes to contracts with large clients.

So far, I have explained the dangers of not communicating with clients properly. In my next article, I will explain how it can be done.

Trevor Choy is the principal of Choy Lawyers, ranked as one of the top 10 intellectual property law firms in Melbourne by Legal Profiles 2001/02, the legal who's who. Trevor is the only Australian lawyer who has worked in the advertising industry, and for the last 8 years has focussed on advising Melbourne's top graphic designers, ad agencies and consumer product companies. In recent months, he has been interviewed by the Age, Sydney Morning Herald, Herald Sun, Channel 9's Small Business Show, Channel 7's Today Tonight, Radio National and Robert Gottliebsen for Business Daily, as well as a number of specialist publications. More information is available at http://www.choylawyers.com.au

"I have a question regarding copyright and 'pitching'. I know that the word itself can be seen as evil, but it lets face it, it happens.

If there is not monetary transaction nor contract and an identity is proposed to a client, who owns the copyright on the work?"

"Martin, your contractual obligation under the clause I wrote about is to ensure that all copyright is transferred to the client. Stock photography, for example, is not going to be owned by the client unless a hefty fee is paid. You have to pay that fee if the client insists that it wants to own the copyright in the stock photography. As per your obligation."

"Hi Trevor, i have read this article with great interest! Are you able to give a little more detail on

"A nasty client can force you to pay for full rights to the image."

Many Thanks Martin"

"Hi John

Absolutely correct, designers lose all rights when it comes to government work (they wrote the copyright law, so it's not surprising). So because there's nothing you can do, I didn't think it was worth including a discussion on government. I'd prefer to focus on what designers can do with commercial jobs where knowledge can make a difference.

Unfortunately, moral rights are also difficult to enforce for all but the wealthiest designers (if there are enough designers with a spare $50,000 or more, maybe we can look at them in a future article!).

Trevor"

"Hi Trevor, most interesting. You might like to consider government instrumentalities who seem to be enjoy copyright ownership irrespective of any clauses in contracts. I suspect that government work counts for a good 25 percent of all design work. And I bet that most designers aren't aware that the rights to their work are automatically appropriated.

Maybe you would like to look at this issue, and whether moral rights of the creator are appropriated as well by the government instrumentality.

Cheers - John"

"Hypothetical situation: an employee of a company that develops photographic film into prints, eg Kodak Express Mini Lab, is also a photographer in his/her spare time. If this employee takes photographs and then develops them while on a paid shift at said Kodak Express Mini Lab, who owns the copyright of any developed material - the company, or the employee? And is the employee obliged to pay Kodak as a supplier for the development of these materials?"