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The quick answer is, of course, to refer to your written terms and conditions, in particular the clause relating to artwork files. When I had a studio I used to assign limited copyright only for the design used (nothing else) and specify that the client owned the artwork files, and I made sure that my fees reflected that value. On the other hand, if you don't have a clause that covers the situation, then what you have is a negotiation situation and a pressing need to create a clause immediately! It may seem like a simple situation, but it involves the fundamentals of being in business, so in fact it can be very complex.

The key factors in this potentially messy situation are:

• what will be done to them once the client has them?
• who owns the files?
• how much are they worth?
• what can I negotiate?

When a client asks for the files, a designer is often suspicious about why. The designer may think, "the client is going to give the files to some other studio or an inhouse person to work on, the work will be perverted and I am going to lose the relationship." There are two independent concerns here, "the work will be perverted" and "lose the relationship." Either or both of these things could happen, but they are not related other than by the fact that the client is the active party in each situation.

The first concern, "the work will be perverted" is actually a concern about the 'personal, moral right' of the creator. In our Practice Note, "Copyright and the Designer", ( section of this site) Chris Finn explains this concept, "the Berne Convention requires that, even after the transfer of an author's economic rights in a work, an author shall continue to have the right to, among other things, object to any distortion, mutilation or other modification of the work. This moral right, imposed on Australia by international convention, has yet to be brought into law, although legislation is presently being considered by the Commonwealth Government."

• Copyright and the Designer Practice Note.pdf [88 KB]

In other words, in Australia today you can 'object' to the adaptation of your work (presumably by someone else) on the basis of that international convention, but you cannot enlist the law to protect you.

The second concern, "I am going to lose the relationship," is not the only possible consequence of handing over the artwork files. The client may simply want to archive and protect what they believe they have paid for. Alternatively, they may hand over updating of the work to someone else, while continuing the main creative relationship with you. Finally, don't forget that there are many other reasons why relationships between clients and designers terminate, which have nothing to do with ownership issues.

Who owns the files?

If your written terms and conditions specify that the client owns the artwork files, then you have nothing to do except copy them onto a cartridge and courier them to the client (for a handling charge, of course). In this situation, the designer will have already received full payment for the files as part of the total project fee.

If you do not have a clause specifying ownership of the files, then you will need to negotiate an agreement with your client specifying ownership and value. Ownership is fairly straightforward, either you are prepared to sell the files or not.

However, your client may feel very strongly about the ownership of the files if they have assumed they already own them, so much so that if you refuse outright to sell the files, they will terminate the relationship. That's why AGDA recommends that its members always provide written proposals, with terms and conditions (See AGDA's Written Proposal Template which includes Terms & Conditions), for every project, because then these issues are clarified before the works starts, rather than afterwards.

What are the files worth?

The trickiest bit in this situation is the value of the files. I have heard of some designers who do not include the full value of their time and materials into a project, on the 'understanding' that over the long term, the relationship will become mutually profitable. This is effectively giving that client a 'loyalty incentive discount.'

All I will say here is that you will need to be a pretty good judge, not only of character but also of corporate policy, in order to decide not only whether the individual can be 'bought' in this way, but also whether the corporation itself will allow its employees to be 'bought' in this way.'For example, all government departments are bound by a policy demanding that competitive quotes are procured for every purchase agreement. Designers need to be clear that without a proposal in writing, there is no legal protection for the 'understanding.' If you enter into this type of implicit agreement as standard practice, then in my opinion you are either exceptionally good or a complete fool (or maybe even both).

Let's get back to the pricing issue. If you're smart, you have already been covered by your original project fee in terms of the time and materials that went into the creation of the artwork files. If you weren't, then you need to negotiate some form of compensation to cover that value, which would be the difference between what you originally were paid for, and the full value of the work. Get out the calculator, work it out and there you have your negotiation target.

Another consideration is that once you hand over the files, the client will theoretically save themselves the cost of recreating the artwork. So here, your benchmark of comparison is what the client will have to pay for that duplication. If the client can get it done inhouse, then the cash cost is effectively zero, but time and skill 'costs' remain. If the client has to get the duplication done by another studio, then the benchmark cost is whatever another studio will charge. Don't forget that desktop publishing bureaus will probably charge less than a studio for this type of work.

I had several clients who specifically needed templates for use by their inhouse art departments, so we simply billed them for not only the full value of creating the designs and artwork files, but also a fee that covered the future cost-savings associated with that internal use. Let's face it, how many designers really want to make their money by churning out reruns and trival text updates? I didn't.

What can be negotiated?

The short answer is, "everything!" The outcome, however, is dependent on: copyright, value and negotiation skills.

If you own the copyright, then you can legally prevent the client from having the design copied and adapted. But to be realistic about it, you'll probably lose the client if you refuse outright.

The value I have already discussed. The trick here is to recognise that you and the client will probably have quite different perceptions of that value, which brings us to the next point, negotiation skills.

If you don't want to negotiate, stop reading here and think seriously about how you badly you want to be in business at all. If you are not prepared to accept the possibility that you may not get everything you want out of the negotiation, the same comment applies.

Let me digress for a minute on a vital principle of free market economies. "Caveat vendor" (seller beware) applies just as much as "caveat emptor" (buyer beware). If a seller of services (such as a designer) has been suckered out of a lot of value by a smart negotiator, that seller is responsible for their own decision, ie. "tough luck, hope you learnt something" because the fact remains that the seller didn't have to agree to sell at all. Worthy bodies such as the ACCC (Australian Consumer and Competition Commission) are specifically charged with the responsibility of protecting buyers rights, while no corresponding government body looks after sellers rights.

So, to get on with the negotiations, you will need to be very clear in your own head about:

• the value of the files (your perception and the client's perception)
• your reasons as to why they have that value
• the client's reasons as to why they have a different value
• what else is at stake (ie. the entire relationship)

Fix the problem before it begins

I am sorry that the discussion has gone on as long as it has, and you are too (probably). The easy way to fix the problem is to deal with it before it arises, in your terms and conditions. This approach is also a lot more professional. Spell out your firm's position on copyright and on artwork files and if necessary, negotiate modifications with the client prior to starting the work. The AGDA written proposal template is a good starting point, but you really should invest some time and money with a good solicitor to adapt them to your specific preferences.

Now that the internet has really taken off, many clients are more aware of the value of copyright so don't be surprised if they insist on negotiating that point. It is up to you to decide what is acceptable compensation.

One last comment - a colleague once complained to me that the client had taken their design (the client had the copyright) and adapted it for use throughout the entire Asian market, without paying any additional fees to the designer. At the time, I thought, "what a clever client to see that potential, how thoughtless of the designer for not having seen it as well." The way to prevent unlimited usage of your design is via the copyright clause, so that copyright is only granted for limited use. Then when they want to use it for additional purposes or regions, you have a basis for negotiation.

When major design firms say that they 'understand' the client's business, this is precisely the type of situation they are talking about. They identify the full value of the project upfront and negotiate their fees on that basis. If you can't cut it on that basis, be happy with what you can get because that's probably all you deserve as a business person and a negotiator. Too many designers have 'jobs' as opposed to 'businesses.' I know I am very tough on this point, but hey, being in business is a very big responsibility!

"while no corresponding government body looks after sellers rights" is not entirely correct, for example: IP Australia, The Copyright Council, Australian Business Council to name a few."

"was good to know because so many times my people in doubt, is this or not. Thanks"

"Simply Superb!!!!!!!! I had my own experience when half of the quoted price was not paid, and the Client alleged the design of the logo was "under his guidance". If I would have known all these, a much happier outcome would have favoured me. Thank You Greatly."

"this was such a good article! i am a student who has just finished college, and boy did i run head first into a copyright scramble! bastards trying to ripp me off! thanks for all the advice!"

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