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AIGA | the professional association for design

DESIGN BUSINESS + ETHICS


DESIGN
BUSINESS
+
AIGA | the professional association for design
ETHICS
164 Fifth Avenue
New York, NY 10010
212 807 1990, www.aiga.org AIGA | the professional association for design
DESIGN
BUSINESS
+
ETHICS
AIGA | the professional association for design

3
AIGA represents an authority on
professionalism within the design
disciplines. Its mission includes
educating designers, clients and
the public about ethical standards
and practices governing design.
The AIGA Design Business and Ethics
series was created to establish
consistent professional standards
and define the relationship among
designers, clients and content.
TABLE
OF
CONTENTS

AIGA | the professional association for design Disclaimer: Legal information is not legal advice. Introduction 9
164 Fifth Avenue, New York, NY 10010 This publication provides information about the
212 807 1990 www.aiga.org law designed to help designers safely cope with
their own legal needs. But legal information is A Client’s Guide
PUBLISHER not the same as legal advice — the application to Design 12
Richard Grefé, AIGA of law to an individual’s specific circumstances.
Although AIGA goes to great lengths to make sure Use of Fonts 40
our information is accurate and useful, we rec-
EDITORIAL CONTENT
ommend that you consult a lawyer if you want
A Client’s Guide to Design: Use of Illustration 46
professional assurance that our information, and
Joanne Stone and Lana Rigsby
your interpretation of it, is appropriate to your
Use of Fonts:
particular situation. Use of Software 54
Allan Haley
IN-KIND PAPER PARTNER
Contributing editors: Sam Berlow, Sales Tax 66
Matthew Carter, Jonathan Hoefler, Arctic Paper
Zusana Licko and Frank Martinez arcticpaper.com
Cover: Munken Polar, 300 g/m Guide to Copyright 78
Use of Illustration: Text: Munken Lynx, 130 g/m
Brad Holland and Tammy Shannon Use of Photography 88
PARTIAL IN-KIND PRINTING PARTNER
Use of Software: Blanchette Press
Standard Form
Business Software Alliance Richmond, BC, Canada
blanchettepress.com of Agreement for
Sales Tax: Design Services 96
Daniel Abraham and Marci Barbey DESIGN
Grant Design Collaborative, Atlanta About AIGA 148
Guide to Copyright:
Tad Crawford
PHOTOGRAPHY
Jerry Burns, StudioBurns, Atlanta
Use of Photography:
Tad Crawford
FONTS

Standard Form of Agreement for Design Services: Interstate and Filosofia


Jim Faris and Shel Perkins
COPYRIGHT
© 2009 AIGA
First edition published in 2001.

SPONSORED BY
INTRODUCTION

The AIGA Design Business and Ethics series represents statements on the
most important issues related to professionalism, principles and best
practices among working designers. This edition, the third to date,
has been updated to reflect changes in the business environment since
it was first published in 2001. Together these chapters comprise
AIGA’s statement of professional standards.

For the first time, this edition of Design Business and Ethics has been
consolidated into a single publication, rather than printed as separate
brochures in a binder. This new format responds to members’ recom-
mendations to minimize the resources used in the publication, both in
consideration of the environment and the current economic challenges.

Every new member receives Design Business and Ethics because AIGA
holds that adherence to a common set of principles is critical to estab-
lishing design as a true profession, with an ethos based on respect for
clients, other designers, audiences, society and the environment. In
addition, this document provides the basis for a common language with
clients, so that together designers can redefine clients’ expectations
of designers. Consistency is critical in establishing the foundation for
understanding, respect and integrity.

Each chapter is also available individually, at no cost and for unrestricted


use, at www.aiga.org/design-business-and-ethics, so that designers
can adapt and republish these standards as part of their own proposals
and conditions for clients.

AIGA’s position is consistent with practices upheld by designers around


the globe. In fact, while the legacy of design’s practice comes from the
guilds of our international peers, today other countries look to AIGA to
set the benchmark, since AIGA is the largest professional association
of communication designers in the world and represents a dynamic
community of (often pioneering) designers. AIGA Design Business and Ethics
has been translated into Mandarin and widely distributed in China,

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where AIGA China has an as advisory office to assist Chinese designers,
educators and students on the expectations of the global design economy.
This, de facto, reinforces the global nature of AIGA’s standards.

We hope you will find the information useful and appropriate. And we
welcome any comments, additions or revisions for future publications at
business_ethics@aiga.org.

Richard Grefé
Executive director
AIGA | the professional association for design

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A CLIENT’S HOW TO
GUIDE GET THE MOST
TO DESIGN: OUT OF
THE PROCESS

If you represent a corporation, institution,


advertising agency, investor or public
relations firm, or you are an individual in
need of graphic design, you’ve landed
exactly where you need to be. Welcome.

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A Client’s Guide to Design:
How to Get the Most Out
of the Process
Getting the most out
of the process 16

Finding the right designer 19

The design brief 27

Budgeting and managing


the process 29

AIGA standards of
professional practice 32

Business expectations for


the professional designer 36

15
Unlike so much in today’s busi- The value position We live in a time of sensory as- Books designers read:
ness world, graphic design is not a Design—good design—is not sault. Competing for “eyeballs”— ■ 6 Chapters in Design, Saul Bass
commodity. It is the highly indi- cheap. You would be better served which is to say, customers—is
vidualized result of people coming to spend your money on some- more than just an internet ■ AIGA: Professional Practices in
together to do something they thing else if you don’t place a phenomenon. The challenge for Graphic Design, AIGA
couldn’t do alone. When the col- high value on what it can achieve. companies everywhere is to at-
laboration is creative, the results There’s a view in Buddhism tract consumers to their products ■ Blur: The Speed of Change in the
usually are, too. This chapter is that there’s no “good” karma and services and keep them in Connected Economy, Stan Davis &
about how to get creative results. and no“bad” karma, there’s just the face of fickle markets. Christopher Meyer
Developed by AIGA, the discus- karma. The same can’t be said
sion that follows will give you for design. Karma is a universal The answer to this challenge ■ Bradbury Thompson:
realistic, useful information about condition. Design is a human act starts with each company’s people, The Art of Graphic Design,
the design process–from selecting (which often affects conditions) products and services, but it Bradbury Thompson
a design firm to providing a clear and, therefore, subject to many doesn’t end there. How companies
understanding of objectives, eval- variables. When the word “design” communicate to their markets ■ The Cluetrain Manifesto:
uating cost and guiding a project is used here, it is always in the and constituencies is becoming The End of Business as Usual,
to a desired end. It is a kind of context of good design. the primary means of differentia- Christopher Locke
“best practices” guide based upon tion today. Never, in fact, has ef-
the best thinking of many differ- A lot of famous people have written fective communication been more ■ The Death of Distance,
ent designers with very different many famous books on the im- important in business. And it has Francis Cairncross
specializations and points of view, portance of design and creativity. increased the pressure within
as well as clients of design who The subject matter ranges from companies to establish environ- ■ Jamming: The Art and Discipline
have a long history of using it suc- using design and creativity to gain ments and attitudes that support of Corporate Creativity, John Kao
cessfully for their companies. The a strategic advantage or make the the success of creative endeavors,
fundamental premise here is that world a more livable place—and internally and externally. More ■ The Lexus and the Olive Tree,
anything worth doing is worth more. Much more. The focus here often than not, companies that Thomas L. Friedman
doing well, but if it’s to be done is on how to make the process of value design lead the pack.
well, it must first be valued. design work in the business envi- ■ Looking Closer: Classical Writings
ronment so that the end product on Graphic Design,
lives up to its potential. ed. Michael Bierut

■ New Rules for the New Economy,


Kevin Kelly

■ Orbiting the Giant Hairball:


A Corporate Fool’s Guide to
Surviving With Grace,
Gordon MacKenzie

■ Thoughts on Design,
Paul Rand

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What design is and isn’t The objects of design

Design often has the properties Design is about the whole, not
of good looks, which perhaps the parts. If you wear your $2,500
is why it’s often confused with Armani suit with the wrong pair
style. But design is about the of shoes, you are apt to be remem-
underlying structure of com- bered for the shoes and not the
municating—the idea, not merely suit. Inconsistency raises doubt,
the surface qualities. The late, and doubt makes people wary.
great designer Saul Bass called This might not matter much if
this “idea nudity”—messages that
stand on their unadorned own.
customers didn’t have alternatives,
but they do. And they know it.
Finding the right designer
Certainly, it’s possible for a good
idea to be poorly executed. But So? People with a great deal of experience—both as
bad ideas can’t be rescued. When, designers and as clients—will tell you that if you
for example, a global fashion So, it isn’t enough for a company
house put verses from the Koran to have a great logo if the com- really do your homework in the selection process,
on the back pockets of its designer munications effort isn’t carried the chances are excellent that what follows will
jeans for all the world to sit on, out across the full spectrum of bring about the hoped–for results.
that was a bad idea before it was the company’s interaction with
ever designed and produced. And its marketplaces— from how the
the outcry of indignant Muslims telephone is answered to corporate
worldwide loudly attested to this. identity; branding; packaging;
Using a different color or type print materials; advertising;
style wouldn’t have changed internet, intranet, interactive
the outcome. multimedia and web-related
communications; and environ-
Ideas give design its weight, its mental graphics. The “swoosh”
ability to influence audiences didn’t make Nike a successful
positively, negatively or not at all. company. Nike made the
“swoosh” an iconic reflection of a
carefully orchestrated approach
to the marketplace. (For better
or worse, the marketplace is
now deluged with “swoosh”-like
shapes, identifying companies
ranging from sportswear to
software. It’s the frame of refer-
ence for what many think of when
visualizing the word “mark.”) It’s
unlikely the “swoosh” would be
so memorable had it stayed con-
fined to, say, hangtags on shoes.

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Where to look Design industry publications are Designers themselves are also If you have a retail packaging
There are more than 22,000 another source. They are both good sources. Ask them whom project, a firm that designs only
members of AIGA, and there numerous and accessible. Not they respect within their field. environmental graphics might not
are hundreds, if not thousands, only do they publish the work There’s nothing wrong with getting be your best choice. Why? Well, the
of other businesses providing of designers on a regular basis, them to name their competition. reasons have less to do with design
graphic design that aren’t mem- many also publish design annuals While it might make choosing than with technical requirements,
bers. There are also other graphic that display what the publica- tougher, when you make the final vendor knowledge, pricing and
design associations with their own tions judge to be the best design selection from among designers scheduling. The designer who
memberships. And this is just the in a variety of categories. These who are peers, you usually come knows how paint and materials
United States. It’s a big community publications will not only show out better than when you don’t. hold up in weather or how signage
and, as with all businesses, design you what designers are capable of (And if the relationship doesn’t is viewed from a moving vehicle
is increasingly global. Where do producing, but also how compa- work, well, you have some future may not know a thing about seam
you start? nies of all sizes and from every contenders you already know wraps and how products are treated
sector of industry are using design something about.) on retail shelves.
The membership lists of AIGA to communicate effectively.
and other design organizations What to look for Still, there is no litmus test to say
are available to the public. Reviewing them is a fairly easy Locating designers to interview is a one firm can do the job and the
They are a good place to begin, way to see a lot of work quickly. fairly uncomplicated proposition. other can’t, or that a firm without
especially if you’re starting from Doing so may also tell you some- What to look for among the poten- a certain kind of experience can’t
ground zero. You will find the thing about where your own de- tial candidates—what makes one or learn. In fact, some companies see
lists arranged by city and state, sign comfort zone lies. And while the other the right firm for you— a real benefit in hiring a design
so that if location is an issue for your personal comfort zone isn’t is more complex. It’s not a beauty firm that brings neither prior
you, you can define your search necessarily the right yardstick contest. Seeing work that you like experience nor preconceptions to
geographically. Start with AIGA’s for making a selection, knowing is important and altogether ap- their project. If you’ve identified
online membership directory it will help you in the “briefing” propriate as a point of departure. a firm you’d like to work with and
at www.aiga.org/directory. process (more on this shortly). But it’s not enough to warrant a are comfortable making a leap of
marriage proposal. faith, you probably should.
The AIGA Design Archives, Still another way to find designers
designarchives.aiga.org, is to look around at what other The nature and technology of what
the largest searchable online companies are doing; call the is designed today is changing and
archive of curated communication companies whose efforts you expanding, and so is the discipline
design selections in existence, admire and ask for their recom- of design. As with many businesses
represents selections from AIGA mendations. Companies that are and professions today, there’s
design exhibition catalogues doing a good job of communicat- more to know, and the knowledge
dating back to 1924. The goal of ing are companies who care about itself has a shrinking shelf life.
the online archive is to provide it, and they’re typically willing to Some design firms have organized
access to examples of design discuss the subject. Furthermore, themselves to do everything, add-
excellence from AIGA competitions, if they’re doing good work, it usu- ing new capabilities as the demand
which are central to the history ally means they are good clients. warrants. Others do related things,
of the design profession, and to Find out from them what makes a such as corporate identity and
promote discovery. Visitors are design client a good client. annual reports. And still others do
able to create lightboxes of images, one thing—web design, for example.
annotate them for reference and
share them with others.

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The “discovery” process is where And don’t stop there. Some of these questions are Top 10 questions
you can make that determination. subjective, intuitive. Most have
1. How does the firm like
And the more thorough you are, How effective has the design concrete answers. If, for example,
to work?
the more likely you are to find a firm’s work been from project to a firm can’t tell you what its clients
firm with whom you can achieve project? Does it even know? And were trying to achieve or how it
2. Who are its clients?
great—who knows, perhaps does it know why? Can the firm arrived at its solutions, chances are
even spectacular—results. So ask demonstrate that it has done what it doesn’t deal in ideas. If it isn’t
3. How knowledgeable is it
questions. Lots of them. it promised in terms of budgets adept at running its own business,
about them?
and schedules? Are you talking it probably won’t be good at
What’s the design firm like to with the people who will do the running your project. If it talks
4. How is it viewed by them?
work with? What is its culture work for you? Are they the ones only about itself, it may not be a
By its peers?
and how does that match up with who did the work you liked? good listener.
your company’s? How flexible If not, have you seen their work?
5. What is its design process?
is it? Does it want lots of direc- Does the firm share the credit— To get your answers, go first to the
tion? Or lots of latitude? And how good and bad—for its work? Does design firms you are considering.
6. What kind of design
much of either are you prepared it exhibit a good grasp of business Then check out external refer-
experience does it have?
to give? Who are its clients? And and does the condition of the ences, especially clients—and not
how did it get them? Does it have a company reflect this? Do you feel just the references provided.
7. What kind of results has
thorough understanding of their that you will enjoy working with Get comfortable with the honesty
it achieved?
businesses? What kind of working the people you’ve met? of the firms you are talking to.
relationships does it have with Find out if their experiences and
8. Who will work on
them? And with its vendors— those of their clients gel. Trust is
your project?
from writers to photographers, essential when you are handing
printers, web consultants and over your wallet and your image to
9. Does the firm understand
fabricators? Is it a specialist? Or someone else.
the business?
generalist? Does it have the man-
power and technical capabilities If you find yourself wondering
10. Do you like the people
to do what you need? How does it whether all of this is really necessary,
you’ve met?
arrive at design solutions? ask yourself how seriously you
want to compete in the market-
place. Because that is exactly what
a good designer will help you do.

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What about design competitions aren’t that many multibillion- Egalitarian or just too eager? from its creator. Who loses? The
and spec work? dollar companies, for one thing. A typical design competition can designer, the client and the profes-
There are differing views on For another, few companies be drawn from experience with the sion. The designer gives up creative
these two closely related subjects. cast such a wide net in search of International Olympic Committee, property without a fair level of
Some designers are absolutely design. The more common specu- the U.S. government or even busi- control or compensation. The
opposed to design competitions lative scenario includes noncom- ness enterprise, and it usually goes client fails to get the full benefit of
and speculative work. Period. pensated competitions and work something like this: A competition the designer’s talent and guidance.
Others are open to them, provided that’s commissioned but paid is announced for a new logo and The profession is misrepresented,
they are compensated fairly for for only upon approval. In either identity. No creative brief outlines indeed compromised, by specula-
their work (i.e., according to the case, the situation is the same: the communication challenges or tive commercial art.
market value of the work). little or no value is placed upon objectives from the perspective
the designer as a professional, as of the client. A jury will select the Unpaid design presentations are
The design competitions being someone whose purpose is to give winner and a prize may be given fraught with economic risk—risk
discussed here are those that trusted advice on matters signifi- (recent examples include a color that is absorbed entirely by the
require design firms to do original cant to the company. TV and stipends of $15 and $2,000). designer. Why, then, do some
work for a company in an effort Often the client indicates one of design firms agree to participate?
to get that company’s business— Please visit www.aiga.org/position- the “rewards” will be the use
not the kind held by nonprofit spec-work for more information of the design by the client—i.e., Sometimes a new firm or a firm
professional organizations, such about AIGA’s position on exposure. The rules of competition without strong design abilities
as AIGA, for the purpose of recog- spec work. include granting the client owner- will offer the excuse that this is
nizing design excellence. ship of the selected entries. (In the only way for it to get work or
one recent competition, the client exposure. A slump in business
Consider this real-world scenar- asked for ownership even of might make a designer more will-
io: A multibillion-dollar, publicly designs that were not selected.) ing to gamble. Whatever the reason
held global corporation with huge Once a design is chosen, develop- given, this short-term approach
brand awareness surveys the work ment of it may or may not involve to hiring a design firm is not in
of several dozen graphic design the designer. the best interests of either party.
firms for the purpose of selecting
one to design its annual report. But the issues go beyond econom-
A competition like this prevents ics. The financial burden borne by
After narrowing the field to a half-
the client from having the benefit the design team translates into risk
dozen candidates, the company
of professional consultation in for the client. To protect their “in-
offers each design firm $25,000
framing and solving a communica- vestment” in a design competition,
to provide it with a mock design of
tion problem. The client receives competing firms often play it safe,
the report, issuing well-defined
artwork at a cost below market providing solutions that don’t offer
design parameters. Assuming the
value, owns the intellectual or fresh, new ideas—in which case,
compensation reflects the effort
creative property and can exploit the client gets what it paid for.
required (it did), this isn’t an
the work without involvement
unreasonable way to approach the
selection process. And many de-
signers would opt to participate.
Yes, speculation is involved, but
so is reciprocal value—up front.
Real though it is, however, this
scenario isn’t the norm. There

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You wouldn’t ask a law firm or The “product” comes at the end
management consultant to provide of a long engagement (in the case
you with recommendations prior of architecture) or is the cumula-
to hiring them. A design firm, no tive effect of a long engagement (as
less than a law firm or manage- in advertising campaigns). Either
ment consultant, has to know its way, initial design represents only
client thoroughly if it’s to give a small part of the project’s total
valid advice. This takes time and value to both client and architect
commitment from both sides. or agency. Not so with graphic
Design competitions—even paid design. The design approach rep-
ones—just don’t allow for this level resents the real value offered by The design brief
of participation. the design firm, and the bulk of the
work may well be completed at
A design brief is a written explanation given by the
Comparisons sometimes are made the front end of a project.
with design competitions held for client to the designer at the outset of a project. As
the purpose of selecting architects the client, you are spelling out your objectives and
or advertising agencies. Where expectations and defining a scope of work when
these analogies fall short is in the
initial effort required versus future you issue one. You’re also committing to a concrete
potential. Architects and adver- expression that can be revisited as a project moves
tising agencies typically present forward. It’s an honest way to keep everyone honest.
design alternatives in order to win
assignments that represent sub- If the brief raises questions, all the better. Questions
stantial future billings and ongoing early are better than questions late.
consulting services to the client.

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Why provide a design brief? How to write one

The purpose of the brief is to get A brief is not a blueprint. It


everyone started with a common shouldn’t tell the designer how to
understanding of what’s to be do the work. It’s a statement of
accomplished. It gives direction purpose, a concise declaration of
and serves as a benchmark against a client’s expectations of what the
which to test concepts and execu- design should accomplish. And
tion as you move through a project. while briefs will differ depending
Some designers provide clients upon the project, there are some
with their own set of questions.
Even so, the ultimate responsibility
general guidelines to direct the
process. Among them:
Budgeting and managing
for defining goals and objectives the process
and identifying audience and ■ Provide a clear statement of
context lies with the client. objectives, with priorities
If the briefing effort is thorough, budgeting and
■ Relate the objectives to overall
Another benefit of the design company positioning managing a project is easier. It takes two to budget
brief is the clarity it provides you and manage a design project: the client and
as the client about why you’re em- ■ Indicate if and how you’ll
barking on a project. If you don’t measure achievement of the designer. The most successful collaborations
know why, you can’t possibly hope your goals are always those where all the information
to achieve anything worthwhile. ■ Define, characterize and is on the table and expectations are in the open
Nor are you likely to get your com- prioritize your audiences
pany behind your project. A brief from the outset.
■ Define budgets and time frames
can be as valuable internally as
it is externally. ■ Explain the internal
approval process
If you present it to the people ■ Be clear about procedural
within the company most directly requirements (e.g., if more than
affected by whatever is being pro- one bid is needed from fabrica-
duced, you not only elicit valuable tors, or if there’s a minimum
input, but also pave the way for acceptable level of detail for
their buy-in. design presentations)
When you think about it, the last In the final analysis, design briefs
thing you want is for your project are about paving the way for a suc-
to be a test of the designer’s skills. cessful design effort that reflects
Your responsibility is to help well on everyone involved.
the design firm do the best work
it can. That’s why you hired the
firm. And why you give it a brief.

28 29
Design costs money ment and production, photogra- Who leads? Who follows? If you identify and articulate your
As one very seasoned and gifted phy, illustration, copywriting and It is the client’s responsibility to objectives, establish your process
designer says, “There is always a printing for a print piece (or, lead a project and the designer’s early, see that the design team
budget,” whether it is revealed in the case of a website, estimates to design and manage the design has access to what it needs from
to the design team or not. Clients for programming, proprietary process. Don’t confuse leadership you, have a detailed budget and
often are hesitant to announce software and equipment). with involvement. As the person schedule to measure progress
how much they have to spend for representing the client, you might with, and lead the process from
fear that if they do, the designer The more informed you are as a want a great deal of involvement, beginning to end, there is no
will design to that number when client about what things cost, the or very little. If you provide lead- reason that you won’t be able to
a different solution for less more effective you can be in guid- ership, your participation can be enjoy the design process as much
money might otherwise have ing a project. You should know, for whatever you want it to be. as the end product.
been reached. This is a reason- instance, that if your design firm
able concern and yet, it’s as risky hires outside talent such as writers, “The first responsibility of a At least, that’s how many of our
to design in a budgetary vacuum photographers and illustrators leader is to define reality. members and their clients see it.
as it is to design without a goal. If and pays them, it is standard The last is to say thank you.”
your utility vehicle budget stops policy to mark up (generally, 20 Max DePree, CEO,
at four cylinders, four gears and a percent) the fees charged by these Herman Miller, Inc.,
radio, there’s no point in looking professionals. You can choose to Leadership as an Art
at Range Rovers. pay these contributors directly to
avoid the markup, but this should There are countless volumes on
If you have $100,000 to spend be addressed at the time they’re the subject of leadership, so we
and you’d really like to dedi- hired. Printing, historically, has won’t presume to give leadership
cate $15,000 of it to something been treated the same way. lessons here. The same gen-
else, giving the design team that eral principles apply. In a design
knowledge helps everyone. Then You should also be aware that project, leadership requires that
you won’t get something that costs photographers, illustrators and you give clear direction at the
$110,000 that you want but cannot writers are generally paid a “kill outset. You must be available
pay for. The trust factor is the fee” if a project is cancelled after when needed by the design team
800-pound gorilla in the budget- work has started. That’s because and ready to make decisions in a
ing phase. Without trust, there talent is in constant demand and timely manner. You should un-
isn’t a basis for working together. accepting one project often means derstand how the design supports
turning other work away. In the your objectives (so you can sell it).
The ideal approach is to bring in case of photography, expect to pay And you’ll need to monitor major
your designer as early as you can. when a photo shoot is cancelled. delivery points and be prepared
The design team can then help you And remember that unless you to get the necessary approvals.
arrive at realistic cost parameters stipulate otherwise, you are buying On this last point, some designers
that relate to your objectives in one-time usage of the photo- are excellent presenters, and, in
lieu of an arbitrary budget figure. graphs— not the work itself—and fact, like to present their work to
At this stage it is quite feasible to that copyright laws are in force the the final authority. But while they
put together a budget range based moment the shutter trips. If you can be persuasive, they are not the
upon a broad scope of a project want unlimited use, you will have ones to get the final sign-off. As
or program. Individual estimates to negotiate and pay for it. the leader of the team, you are the
can be provided, for example, for deal-maker, the closer.
design concepts, design develop-

30 31
The designer’s responsibility The designer’s responsibility
to clients to other designers

A professional designer shall Designers in pursuit of business


acquaint himself or herself with a opportunities should support fair
client’s business and design stan- and open competition.
dards and shall act in the client’s
best interest within the limits of A professional designer shall
professional responsibility. not knowingly accept any pro-
fessional assignment on which
A professional designer shall not another designer has been or is
Standards of work simultaneously on assign- working without notifying the
professional practice ments that create a conflict of other designer or until he or she
interest without agreement of the is satisfied that any previous ap-
clients or employers concerned, pointments have been properly
A professional designer adheres to principles of except in specific cases where it terminated and that all materials
integrity that demonstrate respect for the profession, is the convention of a particular relevant to the continuation of the
for colleagues, for clients, for audiences or consumers, trade for a designer to work at the project are the clear property of
same time for various competitors. the client.
and for society as a whole.
A professional designer shall treat A professional designer must not
These standards define the expectations of a all work in progress prior to the attempt, directly or indirectly, to
completion of a project and all supplant or compete with another
professional designer and represent the distinction knowledge of a client’s intentions, designer by means of unethical
of an AIGA member in the practice of design. production methods and business inducements.
organization as confidential and
shall not divulge such information A professional designer shall be
in any manner whatsoever without objective and balanced in criticiz-
the consent of the client. It is ing another designer’s work and
the designer’s responsibility to shall not denigrate the work or
ensure that all staff members act reputation of a fellow designer.
accordingly.
A professional designer shall not
A professional designer who ac- accept instructions from a client
cepts instructions from a client that involve infringement of
or employer that involve violation another person’s property rights
of the designer’s ethical stan- without permission, or consciously
dards should be corrected by the act in any manner involving any
designer, or the designer should such infringement.
refuse the assignment.
A professional designer working
in a country other than his or her
own shall observe the relevant
Code of Conduct of the national
society concerned.

32 33
Fees a client to use his or her name for in a negative or dehumanizing A professional designer shall
A professional designer shall the promotion of work designed way. A professional designer shall refuse to engage in or countenance
work only for a fee, a royalty, sal- or services provided in a manner strive to be sensitive to cultural discrimination on the basis of race,
ary or other agreed-upon form that is appropriate to the status values and beliefs and engages in sex, age, religion, national origin,
of compensation. A professional of the profession. fair and balanced communication sexual orientation or disability.
designer shall not retain any design that fosters and encourages
kickbacks, hidden discounts, Authorship mutual understanding. A professional designer shall
commission, allowances or pay- A professional designer shall strive to understand and support
ment in kind from contractors not claim sole credit for a design The designer’s responsibility to the principles of free speech,
or suppliers. Clients should be on which other designers have society and the environment freedom of assembly and access
made aware of markups. collaborated. A professional designer, while en- to an open marketplace of ideas,
gaged in the practice or instruction and shall act accordingly.
A reasonable handling and When not the sole author of a of design, shall not knowingly do
administration charge may be design, it is incumbent upon a or fail to do anything that consti-
added, with the knowledge and professional designer to clearly tutes a deliberate or reckless disre-
understanding of the client, as a identify his or her specific re- gard for the health and safety of the
percentage to all reimbursable sponsibilities or involvement with communities in which he or she
items, billable to a client, that pass the design. Examples of such work lives and practices or the privacy
through the designer’s account. may not be used for publicity, of the individuals and businesses
display or portfolio samples with- therein. A professional designer
A professional designer who has a out clear identification of precise shall take a responsible role in
financial interest in any suppliers areas of authorship. the visual portrayal of people, the
who may benefit from a recom- consumption of natural resources,
mendation made by the designer The designer’s responsibility and the protection of animals and
in the course of a project will to the public the environment.
inform the client or employer A professional designer shall
of this fact in advance of the avoid projects that will result in A professional designer shall
recommendation. harm to the public. not knowingly accept instructions
from a client or employer that
A professional designer who is A professional designer shall involve infringement of another
asked to advise on the selection of communicate the truth in all situ- person’s or group’s human rights
designers or the consultants shall ations and at all times; his or her or property rights without permis-
not base such advice in the receipt work shall not make false claims sion of such other person or group,
of payment from the designer nor knowingly misinform. A pro- or consciously act in any manner
or consultants recommended. fessional designer shall represent involving any such infringement.
messages in a clear manner in all
Publicity
forms of communication design A professional designer shall not
Any self-promotion, advertising and avoid false, misleading and knowingly make use of goods or
or publicity must not contain de- deceptive promotion. A profes- services offered by manufacturers,
liberate misstatements of compe- sional designer shall respect the suppliers or contractors that are
tence, experience or professional dignity of all audiences and shall accompanied by an obligation that
capabilities. It must be fair both value individual differences even is substantively detrimental to the
to clients and other designers. as they avoid depicting or stereo- best interests of his or her client,
A professional designer may allow typing people or groups of people society or the environment.

34 35
Experience and knowledge management for approval and
A professional designer is quali- meet with a client as often
fied by education, experience and as necessary to define ongoing
practice to assist organizations processes and strategy.
with strategic communication
Compensation and
design. A professional designer
financial practices
has mastered a broad range of
conceptual, formal and techno- A professional designer provides
logical skills. the client with a working agree-
Business expectations for A professional designer applies
ment or estimate for all projects.

a professional designer his or her knowledge about physi- A professional designer will not
cal, cognitive, social and cultural incur any expenses in excess
human factors to communication of the budget without the client’s
In today’s information-saturated world, where an planning and the creation of an advance approval.
organization’s success is determined by the power of appropriate form that interprets,
its brand, professional designers become even more informs, instructs or persuades. A professional designer may
apply reasonable handling and
important in ensuring that companies communicate Strategic process administrative charges to reim-
effectively—an imperative with bottom-line impact. A professional designer combines bursable items that pass through
Furthermore, a professional designer’s ability to execute creative criteria with sound the designer’s account with the
problem-solving strategy to knowledge and understanding of
communications projects efficiently and economically the client.
create and implement effective
is more critical than ever.
communication design.
A professional designer does not
A professional designer solves undertake speculative work or
When a client invests in the services of a professional
communication problems proposals (spec work) in which
designer, he or she hires an individual who aspires to a client requests work without
with effective and impactful
the highest level of strategic design, ensuring a higher information architecture. providing compensation and
return on investment. If a designer meets the following without developing a professional
A professional designer becomes relationship that permits the
criteria, he or she will demonstrate the integrity and designer sufficient access to the
acquainted with the necessary
honor of the professional designer. elements of a client’s business client to provide a responsible
and design standards. recommendation.

A professional designer con-


ducts the necessary research and
analysis to create sound commu-
nication design with clearly stated
goals and objectives.

A professional designer will


submit an initial communication
strategy to an organization’s

36 37
Ethical standards Clients can expect AIGA members
A professional designer does not to live up to these business and
work on assignments that create ethical standards for professional
potential conflicts of interest designers. Through consistently
without a client’s prior consent. professional work, AIGA members
A professional designer treats all have documented substantial
work and knowledge of a client’s bottom-line contributions to corpo-
business as confidential. rations and organizations. For more
information and case studies about
A professional designer provides how professional designers have
realistic design and production produced excellent business results,
schedules for all projects and will visit www.aiga.org.
notify the client when unforeseen
circumstances may alter those
schedules.

A professional designer will clearly


outline all intellectual property
ownership and usage rights in a
project proposal or estimate.

38
USE
OF
FONTS

Fonts are creative, intellectual property,


similar to designers’ creative work or to
proprietary business products. Since type
is so ubiquitous and fonts are so easy to
share among computer users, the legal
and moral issues of the simple process of
using a font are often overlooked.

40 41
There are four good rules ■ Don’t lend or give fonts to Fonts are creative, You do not own a font.
that guide ethical practice others to use. Your friends, intellectual property. You license it for limited uses.
in font licensing: clients and colleagues need to Typefaces are collections of Fonts are not bought. The right
■ If you are using a font, whether acquire the rights to use them. letterforms. They endow written to reproduce them is licensed,
it’s on your computer or that When it comes to licensing communications with a style that and the license to use them states
of someone else, make sure you fonts, ethical practice makes ultimately reflects the character specific terms.
have a license to use the font. sense legally and financially. and style of the originator of
Violating the terms of a license the communication, whether a The right to use a font designed
■ If you want to use a font that is agreement puts the designer, corporation or an individual. by someone else is acquired from
not installed on your computer, the client and future business Typefaces are the result of extensive the foundry that created the font
you must either ensure that you relationships at risk. An ethical research, study and experimenta- and is granted in the form of an
or your employer has a license approach to font use and font tion, and for some designers, end-user license agreement, or
to install the font on your licenses is therefore both the creation of typefaces is a full- EULA. Some foundries will allow a
computer or else acquire a good business practice and time occupation. The training and supplier to administer the license
license to use it. good business. expertise required to develop a agreements for a font, but the
typeface qualifies the product as agreement itself is always between
■ If you have any questions about intellectual property and merits the licensee and the foundry that
your font license, contact the its protection under copyright law created the font.
foundry or supplier of the font. in many countries.
(If you do not know the foundry The terms of use described by an
or supplier, almost any foundry A font is the software that describes end-user license agreement vary
or supplier can help you identify the characters in a typeface. Digi- from foundry to foundry and may
the source.) tal fonts, like any software, are vary depending on the scope of
intellectual property and may be the desired use. Licenses usually
subject to federal copyright and grant permission for the licensee
trademark laws. to install a given font on a certain
number of computers. However,
For additional guidance on soft- licenses can also specify use on
ware use and management, you printers, periods of exclusivity for
can refer to the “Use of Software” custom typefaces and distribu-
chapter in this book, on page 54. tion rights. If you have questions
about what you may or may not do
with the font you are using, the
best thing to do is to contact the
foundry or supplier of the font.

42 43
You need permission to alter You cannot share a font with You can embed a font in a file This is an issue of ethics,
a font for use in your design. someone who does not have his or to have it viewed or printed respect and law.
her own license to use it. by others.
Because the software that de- There are tangible and intangible
scribes a typeface is automatically Font software may not be given A font may only be sent with a job consequences of using a font
subject to copyright protection or loaned to anyone who does to a service bureau, consultant without a license. If caught using
upon its creation, any version of not also have a license to use it. or freelancer if the contractor has a font without the proper license,
the original font is considered a Therefore, misuse or unauthor- a license for the font or if the the user will have to purchase the
“derivative work” under copyright ized copying of a font that belongs license agreement makes provision correct license for the font and
law. The revision should not be to a client or your employer is for it. When necessary, it can in some cases pay damages to the
considered an authorized deriva- an infringement of the designer’s be acceptable for font data to be originating foundry. More im-
tive work because the adaptation rights and could subject you to embedded in file formats such as portantly, using a font without the
is derived from copyrighted legal action. EPS and PDF only for printing and proper license could prevent a
software. It cannot be used for previewing purposes, but not for professional designer from being
commercial purposes without When the client is the “end user” editing. However, embedding is fully compensated.
violating the copyright. of the license agreement, the not allowed by all foundries, so an
designer may not take the font additional license may need to It is the value of the intellectual
Some font licenses allow the with him or her when the project be purchased. property of a colleague that is
licensee to alter the characters is over, even though it may ultimately at stake in the licensing
in a font or to convert the font to mean another license must be of fonts. To purchase the proper
other formats. Other foundries purchased for the next job. license for a font, especially as
do not allow derivative works at all a practicing design professional,
without permission. Therefore, is to recognize the value of a
many designers, when asked to colleague’s work, to respect the
create a derivative work, have made practice of another designer and
it standard ethical practice to get to uphold the integrity of the
permission from the font designer design profession.
before altering any font data.

If you need to find out who de-


signed the font you want to alter,
you should contact the foundry
or font supplier.

44 45
USE
OF
ILLUSTRATION

AIGA supports the use of original illustration


in design solutions. Illustration can provide
a unique sensibility to certain projects. This
chapter offers insight into professional
practices and ethical considerations within
the illustration community.

46 47
Illustration offers visual solutions Select an illustrator based Within the illustration community, Illustration sources
to design challenges. on previous work. the most reputable stock agencies
Illustration can transcend the There are countless ways to locate are considered those whose Annuals:
limits of the written word. It is the perfect illustrator for a par- pricing and usage are handled 365: AIGA Year in Design
an art of opposites, an intricate ticular project. Many buyers turn by the creator, whose fees are fair The Society of Illustrators
dance between art and commerce to annuals, sourcebooks and the and reasonable to creators and American Illustration
that is created by people who find internet, along with local illus- who recognize the creator with Communication Arts
freedom in solving visual riddles tration clubs, organizations and credit lines for the illustration. Illustration Annual
and in filling dictated space with personal recommendations. There is some concern over agen- Print Magazine
inventiveness, creativity and cies that fail to protect the client
added value. Typically, a buyer will either from acquiring an illustration Sourcebooks:
request a portfolio or review the without a clear measure of how The Workbook
Each illustrator brings a different work online. It is not appropriate broadly the image is already being The Alternative Pick
perspective, vision and idea to to ask for original sketches for an used, from acquiring an image for The Blackbook
play that, when married with great assignment without compensating which the rights are not available The Directory of Illustration
design, becomes an original art the illustrator (asking for “spec” and from acquiring illustrations
form. Illustration brings spon- or speculative work). The selec- that misappropriate an original Websites:
taneity, freshness and a unique tion should be based on seeing artist’s style. In other words, www.theispot.com
point of view to the design of previous work and discussing the it is important for the client to www.workbook.com
content. It helps to communicate assignment with the illustrator. work with intermediaries who www.directoryofillustration.com
both simple and complex mes- demonstrate the same respect
sages while enhancing a design There are also archives avail- for the integrity of illustration as
through the unique vision and able of pre-existing illustration intellectual property as the client
skill of the selected illustrator. commonly referred to as “stock” would expect in the treatment of
and “royalty-free” illustration. its own assets. This protects the
When a designer selects an In many instances, it may not be value of both the illustrator’s and
illustrator to use, he or she is not possible to commission a unique the client’s finished property.
only receiving the rights to repro- illustration, so a designer may
duce the finished piece, but is decide to license this existing art Although convenient, stock
also receiving the fruits of years to illustrate a project. does not always serve the creative
of exploration and the develop- process. Many believe it is an
ment of an individual style. This It’s a safe assumption to state alternative best utilized when
individual style becomes the core that a client is best protected—in there are no other options.
of the product, the individual terms of the quality of the work
service offered and the asset that and assurances on the limited
embodies the completed cre- availability of the work—when
ative work. This intellectual and illustrations are licensed directly
creative property is no different from the illustrator or his or her
from other proprietary business authorized representative. The
products and services. It is devel- alternative is to license the work
oped—and protected—to enhance through a stock agency.
the value of the finished user.

48 49
Price is directly related to use. Every agreement should Original artwork belongs Original artwork cannot be
There are many considerations exist in writing. to the illustrator. changed without the creator’s
for pricing a piece of illustration. Once the appropriate talent has There are concerns that the approval. Changes to an illustra-
One common misperception is been selected, negotiations begin buyer and illustrator must keep tor’s work must be made by the
that fees are based on whether it taking into account the following in mind to protect the value of illustrator, unless permission is
is original or stock art. The fee for criteria: rights, usage, schedule, the work, both within and outside secured from the illustrator first.
the use of illustration should be exclusivity, complexity, extended the context of the contracted us- It constitutes creating a derivative
based on the use of an illustration rights and, in some cases, the age. These issues are understood work from copyrighted mate-
and the exclusivity of its use, not reputation of the talent selected. within the industry and are ad- rial, which, intentionally or not,
on whether it is original or stock. hered to by professionals on both violates federal law and places the
The fee will vary based on how Written and signed documenta- ends of the creative exchange. buyer at risk. Many are simply not
exclusive the use of the image is tion should be completed before aware of this law and unintention-
in the use that is contemplated work is begun (even on a rush An artist’s copyright is owned by ally violate it, so please be aware.
for it, and whether the client project) to ensure that everyone the artist and is protected from
wants rights for all uses for a set has the same understanding. This the moment it is created by the For additional up-to-date
period of time (which is a licens- document should outline in detail 1976 Copyright Act. This pro- information about the copyright
ing equivalent to purchasing the the usage, deadlines, level of cor- tection covers the work for the law, please visit www.copyright.gov/
illustration). rections allowed before incurring artist’s lifetime plus 70 years. If title17.
additional charges, potential kill agreed to in writing, the copyright
Specification of the anticipated fees, payment details, form of may be assigned elsewhere.
use must be clearly stated in a delivery for final art, expenses, etc.
written agreement. A troubling Original artwork belongs to the
ambiguity often exists, however, Typically there is one sketch sub- illustrator, regardless of the use
about whether an image licensed mitted unless otherwise negoti- rights that are licensed. Original
for use in a print medium is then ated. If the project requires more artwork is provided temporarily to
included in the internet version of than this standard, then this must licensees for reproduction. Even
the print piece. Unless the be communicated and negotiated the purchase of “exclusive rights”
usage was specified, the rights are beforehand. Often“corrections” represents rights to reproduce
not automatically granted. As in or small adjustments are made, the artwork only. The original
any agreement, it is important to but only to the original agreed- illustration remains the property
clearly state all usage for purchase upon concept. These guidelines of the illustrator unless it is pur-
in detail; otherwise the rights stand for computer-generated chased explicitly and separately
not specifically purchased remain illustrations as well. Although from the rights.
the property of the illustrator. the work is created in a different
manner, the same considerations
are adhered to.

“Changes” reflect new ideas that


are brought into the sketch or
finish stages. These are negotiated
before the changes begin and
are added as an addendum to
the contract.

50 51
It is important to work with Illustrations should not be used In addition, much of this work is An illustrator can serve as
professional integrity. without gaining permission from imitative, since the creative pro- a creative consultant.

Dealing respectfully with another the creator. Accessing and using fessional is being asked to create The possibility of unbound cre-
member of the design profession illustrations from print, portfolios, and sell images without sus- ativity in the digital age is endless.
goes far in ensuring a more stable the web or other materials— tained accountability, and some It is commonly known that im-
business environment for prac- whether for mock-ups, comps or of the work may cross the line of agery is the newest commodity in
titioners and clients alike. It also final designs—without first plagiarism. Although there are the current economy. Who better
supports one of the oldest and securing permission and estab- appropriate sources and uses of to recognize quality and develop
most basic tenets of our profes- lishing a basis for use rights is royalty-free work, it is the excep- the potential of this commodity
sion: the autonomy and freedom illegal and the most common law tion and otherwise may have some than the creators of the imagery?
necessary to create our own broken by clients, whether know- risk associated with its use. When Illustrators are being retained as
professional independence. ingly or unknowingly. (Refer to there is no accountability for the creative consultants for virtually
the 1976 Copyright Act for history of usage, you are lowering every stage of conceptual work. At
Respect for the rights of illustra- more details.) the value of the design. one time, art directors developed
tors is a matter of practice, ethics sketches of their ideas and hired
and law. It is the value of the intel- Make sure you are acquiring Illustration is a value-added artists to execute their ideas.
lectual property of a colleague— illustration from an accountable commodity, while royalty-free Today, illustrators often assume
and within the body of the in- and respectable source. For and stock serve a more decorative the role as consultants to art di-
tended user—that is ultimately at many within the illustration com- function. If you take an illustration rectors and clients in developing
stake in many of these concerns. munity, royalty-free illustration out of its intended use and use it the concepts for communicating
To deal honorably with illustra- is considered a questionable to simply fill space, you have less- content, as well as executing
tors is to recognize the value of practice. Royalty-free distributors ened the value of the final product. the ideas.
a colleague’s work, to respect do not generally license work
the practice of another creative from creators and do not always This involvement of an illustrator
professional and to uphold the compensate creators adequately from concept to execution on a
integrity of the design profession. (or at all) for giving up rights to project takes full advantage of an
their work. Many collections have artist’s creativity and experience
Illustrators invest substantially in been gathered through unwill- in integrating illustration into
the research and development of ing and/or unknowing sources the intended outcomes. Addi-
their technique and style. This, in over the years and simply do not tional roles include, but are not
turn, is the basis of their business compensate the talent that created limited to: animator, storyboard
and reputation. To ask an illustra- them. In other instances, royalty- artist, production designer, logo
tor to mimic the style of another free work is often produced by art- designer, character developer,
illustrator is not considered ethical ists who have inadequate concern illustrative journalist, internet
or, in some instances, even legal. for the integrity of how the work artist and mock-up/comp artist,
There is a difference between find- is used, or who have no bargaining among many others.
ing illustrators who are influenced power to defend their rights in
or inspired by other artists versus a competitive marketplace.
talent who directly infringe on
copyrighted material. (In recent
years, a number of illustrators
have won copyright infringement
lawsuits based on theft of an
illustrator’s intellectual property.)

52 53
USE
OF
SOFTWARE

Just as design is a designer’s creative


property, computer software is intellectual
property that is owned by the people who
created it. Without the expressed permission
of the manufacturer or publisher, it is illegal
to use software no matter how you got it.
That permission almost always takes the
form of a license from the publisher, which
accompanies authorized copies of software.

When you buy software, what you’re really


doing in almost every case is purchasing
a license to use it. Rather than owning the
software, you acquire limited rights to
use, reproduce and distribute the program
according to the terms spelled out in
the license.

54 55
Using software for which you have Illegal software carries Software is an asset: Learn to ■ Don’t permit employees to buy
not acquired a license is wrong. hidden risks. manage it. software directly or charge it to
A program can be installed and Software publishers offer their le- Before anything else, your com- their expense accounts
used on only one computer at a gitimate customers a wide array of pany culture must be one in which
time, although there are usually products and services in addition all your employees understand ■ Ensure that software cannot
provisions allowing you to make to the actual program: user manu- the value of software, learn the be downloaded from the
a “backup” copy for archival or als and other documentation, difference between legal and illegal internet by employees without
disaster-recovery purposes. If you notification of problems, train- use and pledge their commitment special approval
don’t comply with the terms of the ing, support services, repairs and to the proper use of software. To
license—for example, by install- upgrades. A legitimate copy also do this, you must have a clear Whatever your policy, make sure
ing the same copy of a single-user ensures you that you’re getting the statement of policy. The statement that it is included in any infor-
program on several computers— quality product produced by the should express the company’s mation given to new employees,
that’s software piracy. The rightful owner of the program. goals to manage software for distributed to all current employ-
publisher can take legal action maximum benefit, deal only in ees, posted on company bulletin
against you or your business. An illegal copy enjoys none of legally licensed software from an boards and available on company
these benefits. Further, it could authorized dealer and spell out the computer networks. Every
The license isn’t the only way in well be an outdated version of the company’s procedure for acquiring employee needs to acknowledge
which software is protected. software, a test copy with bugs, legal software. An effective soft- the statement of policy and the
Copyright and sometimes patent an improperly made copy that can ware purchase procedure consists consequences of violating it. In
law protect software from unau- damage data or hide a damaging of the following: turn, employers must take steps
thorized copying, distribution virus. Any one of these problems to educate employees on what
and sale. The law also recognizes could quickly escalate into costly ■ Centralize all your purchases constitutes illegal use of software.
the internet and prohibits users damage recovery far more expen- through a single professional
from uploading, downloading or sive than the money you “saved” on your staff
transmitting unauthorized copies by purchasing illegal software.
of software online. An indi- ■ Ensure the software being
vidual who breaks these laws—or Illegal software cheats its creators requested is on the company’s
a company that looks the other way out of their fair reward for the list of supported software
when an employee does—is liable innovation they have created and
to civil and criminal action. The cheats your company out of the ■ Buy only from reputable,
consequences range from public full value of the software. And authorized sellers
embarrassment through adverse it could well damage your data,
publicity to significant civil dam- tarnish your business reputation, ■ Work only with reputable
ages, criminal fines and even subject you to fines or even land application service providers
the possibility of imprisonment. you in prison. In many respects, (ASPs) and ensure you maintain
the most important issue is all relevant licenses and
your integrity. You cannot fairly documentation with that ASP
advocate the protection of what
you create without respecting the ■ Get original user materials
comparable rights of others. (manuals, registration cards,
etc.), licenses and receipts
with each purchase

56 57
Sample Software 6. Any doubts concerning Take inventory of your software. No matter what tools you use,
Management Policy whether any employee may copy Once you have a policy, your next make sure to collect product
1. (Organization) licenses the or use a given software program step is to take inventory of your name, version number and serial
use of computer software from should be raised with a respon- software assets. Only by knowing number for each copy of software
a variety of outside companies. sible manager before proceeding. what programs are installed on installed on each computer.
(Organization) does not own this all the computers in your organi-
software or its related documen- I am fully aware of the software zation—desktops, laptops and You should also take an inventory
tation and, unless authorized by use policies of (Organization) and any copies of programs from of material related to software on
the software developer, does agree to uphold those policies. work installed by employees on your computers, including:
not have the right to reproduce it their home computers—can you
except for backup purposes. ____________________________________ determine how to proceed. An ■ All original CDs or other storage
(Employee signature and date) accurate inventory can answer media used to install the
2. With regard to Client/Server the following questions: programs on your computers
and network applications, (Orga-
nization) employees shall use ■ Are we using the most recent ■ All original manuals and
the software only in accordance or most suitable version of reference documentation
with the license agreements. programs we need?
■ All license documentation
3. (Organization) employees ■ Are we using outdated or
shall not download or upload unnecessary programs that ■ All invoices, proofs of purchase
unauthorized software over can be deleted? and other documents proving
the internet. the legitimacy of your software.
■ Are there other programs we This includes invoices for
4. (Organization) employees should obtain to become more computer systems that were
learning of any misuse of software productive or efficient? sold to you with software
or related documentation already installed.
with the Company shall notify ■ Does each employee have
their manager. the correct set of programs
available to him or her?
5. According to applicable copy-
right law, persons involved in the ■ Are employees properly trained
illegal reproduction of software to use the software we have?
can be subject to civil damages and
criminal penalties. (Organiza- ■ Do we have illegal, unauthorized
tion) does not condone the illegal or unlicensed programs or
duplication of software. (Orga- copies in our business?
nization) employees who make,
acquire or use unauthorized copies
of computer software shall be
disciplined as appropriate under
the circumstances. Such discipline
may include termination.

58 59
Once the inventory is completed, Next, compare the legitimate Follow through on End-user piracy
you should carefully store the copies of software that remain on software management.
End-user piracy occurs when an
documentation, original copies of your computers with the needs Effective software management employee of your company repro-
your software and other material of your company that you identi- is a continual process. You need duces copies of software without
in a secure place. That way, you fied when taking the inventory. to monitor employee adherence, authorization. End-user piracy
can take advantage of services, You can make informed deci- guard against the introduction can take the following forms:
upgrade offers and the like from sions about which software you of illegal software, keep your list
publishers and be more easily legally have that you want to keep, of supported software up to date ■ Using one licensed copy to
able to reinstall software in case upgrade or discard. Programs can and plan ahead for the next three install a program on multiple
of a disaster. be moved from computers where years. It makes sense to have computers
they are not needed to comput- someone within your studio re-
With your inventory in hand, you ers where they are. Programs can sponsible for the process in order ■ Copying disks for installation
can compare the software that’s be upgraded, if necessary, so that to centralize the job. and distribution
installed on your company’s com- everyone is using the version of
puters to what’s allowed under the the program that’s most appropri- Periodically, it’s a good idea to ■ Taking advantage of upgrade
terms of your licenses.(Remember ate for your company. And you can perform spot checks on individual offers without having a
that some licenses allow you to purchase only the new, legitimate computers to make sure illegal legal copy of the version to
make a certain number of copies software you need. software has not been inadver- be upgraded
of a program from a single source, tently or deliberately installed. It
or to have a limited number of Based on the inventory, upgrades, also makes sense to conduct an ■ Acquiring academic or other
employees use the software at the new purchases and input from inventory every year, as you might restricted or nonretail
same time from a network. The employees, you can now create for other valuable assets. When software without a license
original license will tell you how a formal list of the software that employees leave the company, for commercial use
many.) Also remember that simply your company will allow its em- make sure the software they
having an original CD or DVD for ployees to use. It should include worked with remains with your ■ Swapping disks in or outside
the software doesn’t necessarily program names, serial numbers, company and that they do not take the workplace
mean you have authorized copies. version numbers, number of or keep copies. Prevent piracy
Only the original license spells out copies or users permitted by the from damaging the operations or
the terms and gives you the right license, the computers on which integrity of your studio.
to use the software. the copies are installed and plans
to add, upgrade or discard the After you’ve put your software
Once you have identified any software in the future. assets in good order, you’ll still
illegal software copies in your need to monitor your workplace
business, you should delete them for illegal software. There are five
from your computers. This is also common types of end-user piracy,
an ideal time to remind employ- and understanding each will help
ees about the company’s software you and your employees avoid the
policy and the dangers associated problems of illegal software.
with using illegal software.

60 61
Client-server overuse Internet piracy The same purchasing rules should Hard-disk loading

Client-server overuse occurs The software industry plays a apply to online software purchases Hard-disk loading occurs when
when too many employees on a leading role in ensuring that the as for those bought in traditional the business that sells you a new
network are using a central copy internet reaches its full potential. ways. Organizations should have a computer loads illegal copies
of a program at the same time. To date, software publishers have clear policy as to when, whether of software onto its hard disk to
If you have a local-area network contributed in countless ways to or with whose authorization em- make the purchase of the ma-
(LAN) and install programs on the the internet’s success, provid- ployees may download or acquire chine more attractive. The same
server for several people to use, ing the means by which content software from websites. concerns and issues apply when
you have to be sure your license can be created, displayed and you engage a value-added re-
entitles you to do so. If you have exchanged, and providing some Below are some tips to help en- seller (VAR) to sell or install new
more users than allowed by the of the most desired content itself. sure that the public and business- software onto computers in your
license, that’s “overuse.” You can However, intellectual property es are purchasing legal software office. You can avoid purchasing
correct this problem by making theft on the internet constrains on auction sites: such software by ensuring that
sure employees understand the the software industry and sig- all hardware and software pur-
restrictions, by installing “meter- nificantly reduces its positive ■ If a price for a software product chases are centrally coordinated
ing” software that ensures only impact on economies throughout seems too good to be true, through your organization and
the licensed number of users have the world. There are thousands it probably is. all purchases are made through
access or by purchasing another of fraudulent websites selling a reputable suppliers. Most im-
license that covers the number of variety of illegitimate software ■ Be wary of software products portantly, require receipt of all
users you need. products. Internet piracy repre- that come without any original software licenses, disks
sents a serious threat to electronic documentation or manuals. and documentation with every
commerce. hardware purchase.
■ Beware of products that do not
While there are many publish- look genuine, such as those with
ers that offer authorized versions hand-written labels.
of their software for sale online,
there are also numerous pirate ■ Beware of sellers offering to
operations to be aware of on the make “backup”copies.
internet as well:
■ Watch out for products labeled
■ Websites that make software as academic, OEM, NFR or CDR.
available for free downloading
or in exchange for uploaded ■ Be wary of compilations of
programs software titles from different
publishers on a single disk.
■ Internet auction sites that offer
counterfeit, out-of-channel or ■ Do not give out your credit card
nontransferable software details unless you know it’s a
that infringes on copyrights secure transaction.

■ Peer-to-peer networks that ■ Check with organizations such


enable unauthorized transfer of as the Business Software Alliance
copyrighted programs (www.bsa.org) should you be-
come a victim of software fraud.

62 63
Software counterfeiting ■ The CD has a gold, blue or
Software counterfeiting is the il- blue-green appearance, as op-
legal duplication and sale of copy- posed to the silver appearance
righted material with the intent of that characterizes legitimate
directly imitating the copyrighted product.
product. In the case of packaged
software, it is common to find ■ The CD contains software from
counterfeit copies of the CDs more than one manufacturer or
incorporating the software pro- programs that are not typically
gram, as well as related packaging, sold as a “suite.”
manuals, license agreements,
labels, registration cards and ■ The software is distributed via
security features. Sometimes it is mail order or online by sellers
clear the product is not legitimate, who fail to provide appropri-
but often it is not. Look for the ate guarantees of legitimate
following warning signs: product.

■ You’re offered software whose The guiding principle: Respect


price appears “too good to intellectual and creative property
be true.” rights—they could be yours.
Designers know from their own
■ The software comes in a CD experience the importance of
jewel case without the packag- respecting intellectual and creative
ing and materials that typi- property rights. Designers also
cally accompany a legitimate know the difference between
product. ownership and use rights. The
design profession should respect
■ The software lacks the manufac- the rights of other professionals
turer’s standard security features. because it is right, because it is the
law and because any failure to do
■ The software lacks an original so undermines the moral standing
license or other materials that of the profession in arguing for
typically accompany legitimate its own rights.
products (original registration
card, manual, etc.).

■ The packaging or materials that


accompany the software have
been copied or are of inferior
print quality.

■ The software is offered on an


auction site.

64 65
SALES
TAX

This review of sales tax practices in New


York and California was commissioned by
AIGA based on success in clarifying the
issue in these bellwether states through
legal and administrative proceedings.
The intention of this chapter is to provide
information to all AIGA members and to
allow members in other states to use the
New York and California examples as
support in clarifying their sales tax liability
in their own states.

66 67
As tax agencies more aggressively You should be aware, however, A key distinction: Is your work according to the laws of the
enforce the sales tax laws, more that many accountants, even those tangible or intangible? home jurisdiction.
are eager to audit for possibly “familiar with sales tax issues,” The basic divide that determines
overlooked revenue. Designers may have no idea whatsoever what what is subject to sales tax is the Services
can best protect themselves from the sales tax issues are with regard sometimes-blurry line between Services, as noted above, are
unexpected tax liability by learn- to this poorly defined area of the the tangible and the intangible. usually not subject to tax unless
ing when they are and are not design profession, and may sug- Transfers of tangible goods are specifically included in a statute
required to collect sales tax on the gest the safest course (but most generally taxed, unless specifically or regulation. This is the general
work they provide for clients. costly to designers): to charge tax exempted by statutes or regula- category under which to group
on everything. A better course tions; services and intangible charges for time and labor; bill-
Sales tax is a state—and occasionally will be for designers to contact an property are generally exempt able time for producing concepts
a local—matter, which prevents accountant, and armed with this and designs, scanning and ma-
from tax, unless statutes or
AIGA from pursuing a single document, raise their conscious- nipulation, time spent on press,
regulations specifically render
national clarification of the issue. ness of this issue, and then get time spent building and encoding
them taxable. Designers typi-
Statutes and the practice of the their advice on how this affects a website and similar billables
cally provide services that are in
taxing authority will vary somewhat your personal situation. should be calculated as services
most cases nontaxable, and grant
from jurisdiction to jurisdiction. and so noted in all contracts and
or license to clients the right to
In addition, design services are invoice terms.
reproduce their work. Licenses
seldom addressed explicitly
are considered intangible per-
in state sales tax laws. The many Intangible property
sonal property, and transfers of
things that design embraces—
such are generally not subject to Copyright licenses are intan-
design services, illustration, print-
ing specifications and delivery tax. Designers may, however, also gible property, as opposed to the
of printed matter or digital files— provide their clients with tangible intangible services of time and
are viewed as different forms of personal property such as fin- labor. Designers, unlike illus-
property and are treated and ished printed matter or a disk that trators, tend not to treat their
grouped differently for tax pur- contains the intangible personal client commissions as copyright
poses from state to state. While property—a reproduction rights licensing transactions. The
AIGA offers a general guide to transfer—that is the substance images that a designer creates,
sales tax principles, dealing with of the contract. Tangible personal however—whether the logo, which
sales tax should be worked out in property is generally subject to is clearly a free-standing im-
consultation with an accountant. tax. While tangible printed mat- age, or the larger images created
ter should be presumed taxable, by arranging type, illustrations
treatment of disks or other layout and photographs in a brochure
transfers may vary widely from or package or poster design—are
jurisdiction to jurisdiction. copyrightable works of graphic
art that the designer licenses to
The designer, then, must consider the client. This is not the place
what is being done, and what is for a lengthy examination of
being transferred, in the various the copyrightability of design.
elements of each client contract, But the designer who registers
and separate out a job’s taxable designs when appropriate and
elements from its nontaxable who, with or without registration,
elements as precisely as possible makes clear to the client that he
in all contracts or invoices, or she is acquiring a license, not

68 69
purchasing ownership of either (however calculated) and the The New York example rather than a license of “repro-
the original design itself or the licenses granted, from the taxable Nowhere in these classifications duction rights.”
boards or disks on which the costs of the tangible printing and does the designer, as such, clearly
design is embodied, is better able production, is essential to avoid appear. Under New York tax law, Nonetheless, designers generally
to retain control of the design and unnecessary tax liability. then, a designer’s services and license original work to the client.
its integrity. Regarding sales tax, licenses are potentially exempt Even if the original work of an an-
a clear paper trail that indicates What is less clear:
from tax, but the designer must nual report, book jacket design or
the design is a copyright property Is design tangible?
know in which category to classify brochure design incorporates il-
being licensed to the client makes While most states do not tax different jobs. lustrations or photography which
clear to a taxing authority that the intangible services or copyright are someone else’s original work,
portion of a job not tax-exempt as transfers, the state laws and New York exempts grants of the the end result which the designer
“services” is a nontaxable transfer regulations may not be clear as right to reproduce an “original licenses to the client is an original
of intangible property. to whether or not “design” falls image” from sales tax and also work in itself, in the form of a
within provision of services and exempts “the services of an ad- collective work which arranges
Tangible property
copyright license transfers or is vertising agency or other persons the type, images, colors, paper,
Printed matter, such as bro- merely a production adjunct of the acting in a representative capac- etc., into a different whole. The
chures, stationery or posters, printing trade. Many state laws are ity.” Thus creation of an original designer may have to pay tax on a
is taxable as tangible property woefully out of date—having been work, such as a logo or creative “license to use” a stock image that
if the designer sells them to the drafted long before the adoption services of a consulting nature, he or she manipulates to create
client. If, however, the designer of the current copyright law, in appears to be excluded. the original design licensed to the
simply acts as the client’s agent in the era of engraving houses, hot end client, but the designer’s end
dealing with the printer, with the type and keylining—and do not New York does not, however, design, if reproduced as is, is a
client paying the printer directly, even recognize the existence of extend that exemption to what it license of reproduction rights and
the transfer to the client will still the designer independent from a terms a “license to use.” Licens- not taxable. If the client, rather
be subject to tax; in this instance printing or typesetting establish- ing of “original work”—i.e., cre- than the designer, adapts it and
the printer, not the designer, will ment. As an auditor’s knowledge ated by the licensor—is a transfer manipulates it, then it would ap-
have to collect the tax. The issue of the industry may well con- of reproduction rights under pear the end client is licensing to
that arises when the designer sist entirely of regulations that New York law, and not subject to “use” rather than to “reproduce,”
transfers tangible personal prop- describe the industry as of 20 or tax, if it is used as is. If, however, and must pay tax.
erty to the client in addition to more years ago, it falls entirely on one is merely licensing the use of
performing services and licensing the designer to provide clarifica- another’s work, that is a “license This would seem to be a strong
the design is how, and where, the tion within the relevant laws and to use” and subject to tax. It is incentive for both designers and
line will be drawn between the regulations, no matter how out also considered a taxable “license clients to not have the client “adapt
intangible, nontaxable portion of of date, to explain why design to use” if the licensee retouches and apply” a design, but rather
the transaction and the tangible, should be exempt from collection or alters the work. The taxable license it for straight reproduction.
taxable portion. Taxing authori- of tax in the event of an audit. “license to use” may apply to the Not only does the client avoid
ties are typically concerned that designer who licenses an image paying tax, as does the designer
in a transaction of this nature the from an archive or stock house, avoid having to collect it, but
bulk of the value will be loaded where the archive or stock house the designer retains a greater level
into the nontaxable portion of is not the creator of the work. of control over his or her work.
the transaction as an exercise in If the designer manipulates the
tax evasion, which is why a clear image in the sense of retouching
paper trail—differentiating the it, the license paid by the designer
value of the intangible services is also a taxable “license to use”

70 71
“Original work,” even that images that the designer has (3) Where some use other than changed or altered. The receipts
incorporating the licensed work retouched or otherwise manipu- reproduction is made of the origi- from such transactions are subject
of others, is the property of the lated. In the case of the logo, the nal work such as retouching to the tax. Since the dealer merely
designer whether the designer is designer’s grant of reproduction or exhibiting a photograph, the collects the photographic prints
a sole proprietor, or whether the rights is clearly not subject to tax; transaction is a license to use, and does not have the right to
designer is a commercial entity in the case of manipulated im- which is taxable. grant the right to reproduce
such as a partnership or corpora- ages, to avoid tax liability under a the original, the transaction is
tion. In the latter instance, the “license to use,” it would be nec- Example 1: A person contracts deemed a license to use tangible
original work of authorship— essary for the designer to be able with an artist for a right to repro- personal property.
“the design”—is a work-for-hire either to classify the job as being duce one of the artist’s paint-
work of authorship owned by done in the role of an “advertising ings on a book cover. No other ¶ 165-033 (b)(5) “Exclusions”
the commercial entity. True, the agency or other person acting in a right is given by the artist for the Fees for the services of advertising
term “work-for-hire” raises the representative capacity,” or as the use of his or her painting. The agencies or other persons acting
hackles on every creator, but if a grantor of rights in the original person who obtains the repro- in a representative capacity are
work of authorship is created by derivative image, of which the duction right to the painting may excluded from the tax. Advertising
several creatives in a company, designer is in fact the author. have copies made and returns services consist of consultation
and the end result is licensed the painting to the artist without and development of advertis-
by the company rather than an Explanations in New York sales alteration, change or correction, ing campaigns, and placement of
individual, the work is a “work for and use tax law and without having destroyed advertisements with the media
hire” owned by the company, and ¶165-018 (f) “Reproduction rights” or publicly exhibited the painting. without the transfer of tangible
the company is the author. (1) The granting of a right to The transfer is not held to be a personal property. The furnishing
reproduce an original painting, il- transaction subject to the sales tax, of a personal report containing
In New York, design fees are not lustration, photograph, sculpture, as a rental, lease or license to use. information derived from infor-
taxable, but transfers of tangible manuscript or other similar work mation services, by an advertising
personal property such as layouts, is not a license to use or a sale, Example 2: A photographer takes agency to its client for a fee, is
printing plates, catalogues and and is not taxable, where the pay- photographs and furnishes the not a taxable information service.
promotional handouts are. If you ment made for such right is in the same to a magazine publisher for However, if an advertising agency
actually hand over design in a nature of a royalty to the grantor the purpose of reproduction. In is engaged only for the purpose of
tangible form, rather than allow- under the laws relating to artistic the course of reproduction, the conducting a survey or if a survey
ing the client to transfer design and literary property. publisher retouches the photo- is separately authorized and billed
electronically for specified uses graph. After reproduction, the to the customer, the taxability
(without leaving a disk or tangible (2) Mere temporary possession or photograph is returned to the of such survey is determined in
product), you are less likely to be custody for the purpose of making photographer. The receipts from accordance with the provisions of
liable for tax on a tangible product. the reproduction is not deemed such a transaction are subject to subdivision (a) of this section and
to be a transfer of possession the tax as a license to use. the other provisions of this subdi-
The designer may sometimes act which would convert the repro- vision. Sales of tangible personal
as an advertising agency, or as an duction right into a license to use. Example 3: A dealer collects property such as layouts, printing
“other person acting in a repre- See Howitt v. Street and Smith photographs and photographic plates, catalogs, mailing devices
sentative capacity,” avoiding tax Publications, Inc., 276 NY 345 and prints. He or she furnishes the or promotional handouts, tapes or
on fees charged in both cases. A Frissell v. McGoldrick, 300 NY 370. prints to a magazine publisher films by an advertising agency for
designer may also, however, grant for the purpose of further repro- its own account are taxable sales
a license to reproduce an original duction. After reproduction the of tangible personal property.
image—as in the case of a logo— prints are returned to the dealer.
or may license, or sublicense, The prints may or may not be

72 73
Example 4: An advertising agency The California example during the development of Silicon This presumption of a taxable 25
is hired to design an advertising Unlike New York, California Valley, and which exempts trans- percent can be reduced in three
program and to furnish artwork does directly refer to designers fers of intangible rights to images ways. (1) If the designer’s contract
and layouts to the media. The fee in its regulations, but the under- but does impose a minimal sales or invoice states the fee for the
charged by the agency to its clients standing of the design industry tax when such rights are trans- copyright license separately from
for this service is not subject to reflected there has traditionally ferred even temporarily in a tan- the sale price for permanent
the tax. However, if the layout and rendered most finished work li- gible medium. The regulations af- transfer of the tangible material,
artwork are sold by the advertising able to tax. California in the past fected include California sales and or the lease price for temporary
agency to the customer for his or has exempted what it calls “pre- use tax regulations 1528, 1540, transfer of the tangible material,
her use, the advertising agency is liminary art”—conceptual work, 1541 and 1543, and new regula- the copyright license is nontax-
making a sale of tangible personal sketches and preliminary lay- tion 1507; the most important for able and the sale or lease price is
property which is subject to the outs—but subjected “total charges designers are regulations 1507, the amount on which tax is due.
sales tax. for finished art”—used for actual which discusses the technology (2) If the contract or invoice does
reproduction—to sales tax. Until transfer concept, and 1540, which not separately state the charge for
recently, California’s sales tax applies that concept to design, transferring the tangible work,
authority consistently refused to but most designers will at some the designer can calculate this
recognize the concept of licensing time or other have to familiarize taxable amount by referencing the
or reproduction rights as applied themselves with regulations 1528 taxable amounts of similar work
to images, though it did recognize (photography), 1541 (printing) done in the past. (3) The third
these rights with regard to written and 1543 (publishing). option is to calculate the taxable
works of authorship. amount at 200 percent of the costs
In brief, images transferred in of materials and third-party labor.
In the decision of Preston v. State intangible form—e.g., by mo-
Board of Equalization, the California dem—are wholly exempt from tax, Under this last option, if a designer
Supreme Court rejected the state’s but when the rights to an image has no third-party labor costs
traditional application of sales are transferred using tangible (e.g., is a sole proprietor without
tax to image-based transfers of means, such as flat art, boards or employees or other assistance)
rights. In that case, an illustrator disks, the rights transfer itself is and does the work on a computer,
successfully sued the board for exempt from tax, but the transfer the sole taxable amount would be
applying tax to payments for the of the tangible medium remains 200 percent of the cost of materials
copyright licenses she transferred taxable, even if the transfer is (i.e., of the disk or CD on which the
to various publishers, and to the temporary. Calculation of the final files are recorded and turned
royalties she was subsequently amount subject to tax begins with over to the client). Thus, with good
paid. As a result of this favorable a rebuttable presumption. If pay- record keeping, the actual tax
decision, brought about largely ment is received in a lump sum burden can be calculated so as to
through an amicus brief filed by without distinguishing between be reduced to almost nothing.
the Graphic Artists Guild and “conceptual services” (which
strongly supported by AIGA, the include all preliminary sketches
California sales tax regulations and presentation pieces) and
have been extensively redrafted. “finished art” (the final used for
The redrafted regulations discuss reproduction), it is presumed
rights transfers in terms of “tech- that 75 percent of the job fee is for
nology transfer agreements,” a conceptual services, leaving only
California concept which evolved 25 percent of the fee subject to tax.

74 75
Sales tax venue Contract language that unaltered and unretouched to To minimize your sales tax
Sales tax applies only to business
clarifies the tax status [the name and address of liability, you should consider the
conducted within the designer’s The contract or proposal should the designer].” following practices:
home state, with two exceptions. contain language permitting the
A few contiguous states, usu- designer to pass through to the The following wording should ■ Differentiate on your invoices
ally adjoining, have reciprocal client any sales tax he or she must be in all contracts for taxable the fees for design services
agreements; the designer living pay on a project and protecting projects: “This estimate does not (consulting), intangible prod-
in a state that has one of these the designer in the event that any include sales tax. Sales tax will be ucts (use licenses) and tangible
agreements should consult an taxing authority assesses sales tax charged for that portion of the job products (boards and disks,
accountant to determine if tax is on audit. The following word- delivered in [State] when the which should be treated as a
due on transactions with clients ing should be in all contracts job is invoiced.” commodity rather than as a
in the reciprocal state. Also, if an for nontaxable transactions and specialized product to which
out-of-state client has a substan- grants of rights for one-time Recommendations to minimize all of the value of your creativity
tial business nexus such as a store reproduction of designs only: sales tax liability accrues). This may not be
or branch office in the designer’s “Client is liable for sales tax paid Most states fall somewhere sufficient. An even more
home state, tax will apply if due. by [the designer] to vendors or between New York and Califor- explicit approach would be to
If the designer is having printing freelancers for services rendered nia in their application of sales execute separate contracts
done out of state for an in-state or materials purchased relating tax to designers. The statutes for tangible and intangible
client, the shipping of the com- to the execution of this project. and regulations may or may not products and services.
pleted printed matter from out of The client shall also pay any sales, recognize designers as such, or
state will still be subject to tax if use or other transfer taxes that the existence and intangibility ■ Clarify in your written
the designer, not the printer, bills may be applicable to the services of reproduction rights, but most agreement with the client that
the client. provided, including any tax that states—including California, you are providing the rights
may be assessed on subsequent once the regulatory revisions are to use your work, but not the
The designer’s role audit of [the designer’s] books of complete—exempt most aspects ownership of the work itself.
in collecting sales tax accounts.” of design transactions except for
the delivery of tangible printed ■ Specify on your boards or
Clients, understandably, do not disks that they are the property
On projects where the client is matter. The designer who wishes
want to pay tax if they can avoid of your studio and should
being provided the grant of a to avoid needlessly collecting tax,
doing so, and frequently attempt be returned.
right for one-time reproduction and to avoid unnecessary liabil-
to evade sales tax by the simple
of the designs only, all mechani- ity for sales tax if audited, must
expedient of refusing to pay or Have clients pay directly for
cals and disks sent to the client be aware of how his or her home ■
ignoring the line item on the tangible products, such as
must be marked with a stamp or state statutes and regulations are
invoice. The designer, however, printing, so that you do not
label that provides the following configured, and adjust contracts
is liable to the state for the tax have to assume the sales tax
message to avoid appearing to be and billing to clearly distinguish
owed, whether or not the client collection role.
a taxable transaction: “Ownership tangibles from intangibles, and
pays—and so should stress to the
and title of all drawings, artwork, taxable transfers from nontax-
client that sales tax is “charged”
electronic files and other visual able, in a manner that conforms
by the state, not the designer,
presentations at all times remains to them. Initial consultation with
who merely collects it on behalf
the property of [the designer]. an accountant familiar with sales
of the state, as mandated under
Temporary transfer of possession tax can provide the designer with
state law.
is granted only for the purpose a template for design transactions
of reproduction after which all that will enable the designer to
materials must be returned, avoid unpleasant surprises.

76 77
GUIDE
TO
COPYRIGHT

Copyright defines the ownership of work


created by a designer. Copyright is what
allows a designer to control whether or not
a work may be copied. If the designer
permits a work to be copied, it is the copy-
right that gives the designer the right to
negotiate for fees or royalties. If the client
of a designer is to be protected from the
theft of designs by competitors, it is because
the copyright law gives such protection.
Furthermore, an understanding of copyright
is necessary if the designer is to obtain for
the client appropriate licenses of copyright
from suppliers such as photographers,
illustrators and authors.

78 79
What is copyrightable? but artistic combinations of these Exclusive rights ing. Offering to distribute copies
Work must be original and cre- shapes can be copyrighted. Type- The designer, as the copyright to a group of persons for further
ative to be copyrightable. Here, face designs are also excluded owner, has the exclusive rights distribution or public display also
“originality” simply means that from being copyrightable (see the to reproduce work; license work; constitutes publication. Exhibit-
the designer created the work and chapter “Use of Fonts,” page 40). prepare derivative works, such ing a work on the internet would
did not copy it from someone else. Calligraphy would appear to as a poster copied from a design; also be a publication.
If, by some incredible chance, two be copyrightable if expressed in perform work; and display work.
designers independently cre- artwork, especially insofar as the However, the owner of a copy of
ated an identical work, each work characters are embellished, but the work can also display it. Any-
would be original and copyright- oddly, may not be copyrightable one who violates these rights is an
able. “Creative,” in the Copyright alone, if merely expressed in the infringer whom the designer can
Office’s definition, means that the form of a guide such as an alpha- sue for damages and prevent from
work has some minimal aesthetic bet.Computer programs and the continuing the infringement. If
qualities. A child’s painting, images created through the use of the designer were to have trouble
for example, could meet this computers are both copyrightable. proving actual damages, which
standard. Although the Copyright include the designer’s losses and
Office has sometimes shown a the infringer’s profits, the law
limited understanding of the art- provides for statutory damages
istry of graphic design, especially that are awarded in the court’s
when uncopyrightable elements discretion in the amount of $750
are arranged to create a new de- to $30,000 for each infringe-
sign, most graphic design should ment. If the designer can prove
be copyrightable. that the infringement was willful,
the court, under the copyright
Ideas, titles, names and short law, can award up to $150,000 in
phrases are usually not copyright- statutory damages. Infringers can
able because they lack a sufficient also be required to pay attorney’s
amount of expression. Ideas can fees. However, to be eligible for
sometimes be protected by an statutory damages and attorney’s
idea disclosure agreement, which fees, designs or other works must
expressly provides compensation be registered with the Copyright
if the idea is used by the party Office prior to the commence-
to which it is submitted. Style is ment of the infringement. For
not copyrightable, but specific newly published works, regis-
designs created as the expres- tration within three months of
sion of a style are copyrightable. publication will be treated as hav-
Utilitarian objects are not copy- ing taken place on the publication
rightable, but a utilitarian object date for purposes of eligibility for
incorporating an artistic motif, statutory damages and attorney’s
such as a lamp base in the form fees. It should be noted that the
of a statue, can be copyrighted to copyright law defines publication
protect the artistic material. Basic as the distribution of a work to the
geometric shapes, such as squares public by sale, other transfer of
and circles, are not copyrightable, ownership, rental, lease or lend-

80 81
Fair use Transfers and terminations Copyright notice Copyright duration

Fair use is a limited exception to The copyright law explicitly states The copyright notice is Copyright, Designers now have federal copy-
the exclusive power of the designer that copyrights are separate from Copr. or ©; the designer’s name, right as soon as a design is cre-
(or client, if the designer has the physical design, such as a an abbreviation for the name or ated—without putting a copyright
transferred rights to the client) to mechanical or, more recently, an alternate designation by which notice on it or registering it with
control the uses of designs. Fair use digital storage media. Selling the designer is known to the pub- the Copyright Office. Copyrights
permits someone to use work with- the physical design would not lic; and the year of publication. created after January 1, 1978, as
out permission for a purpose that is transfer the copyright, because For example, notice could take the well as those already existing in
basically not going to compete with any copyright or any exclusive form of © Jane Designer 2009. works not published or registered,
or injure the market for the work, right of use of a copyright must Copyright notice is now optional, will last for the designer’s life plus
such as using a design in an article always be transferred in a written but it should not be considered 70 years. If the designer is an
about the designer’s career. The instrument signed by the de- unimportant. The designer has employee, the copyright term will
court’s tests for whether a use signer. Only a nonexclusive right a copyright as soon as a work is be 95 years from the date of first
is fair or infringing turns on the can be transferred verbally, such created and is no longer required publication or 120 years from
following factors: as when the designer licenses to place copyright notice on the the year of creation, whichever
a design to one client, such as a design at the time of publication. expires first. In this case, how-
■ The purpose and character of the wallpaper company, but doesn’t However, placing the copyright ever, the design will belong to the
use, including whether or not it is make the transfer exclusive so notice on the work, or requiring employer, since it was created as a
for profit that it can also be licensed to that it appear with the work when work-for-hire.
another client, such as a placemat published, has certain advan-
■ The nature and character of the company. Both exclusive transfers tages. If notice is omitted when a
copyrighted work of copyrights or parts of copy- design is published, an infringer
rights and nonexclusive licenses may convince the court to lower
■ The amount and substantiality of copyrights can be terminated the amount of damages on the
of the portion used, not only in by the designer during a five-year grounds that the infringement was
relation to the copyrighted work period starting 35 years after the innocent; that is, the infringer
as a whole, but also, in some cas- date of publication or 40 years wasn’t warned off by a copyright
es, in relation to the defendant’s after the date of execution of the notice. In addition, copyright
work (and this can be a qualita- transfer, whichever period ends notice informs the public as to
tive as well as quantitative test) earlier. This right of termination the designer’s creative authorship
is an important right, but it does of the work. The best course is
■ The effect the use will have on not apply to works for hire or simply to place the copyright no-
the market for the copyrighted transfers made by will. tice on the design before it leaves
work or the actual value of the the studio and make certain that
copyrighted work copyright notice accompanies the
design when published, even if, in
some cases, the copyright notice
on publication may be the client’s
rather than the designer’s.

82 83
Registering creative work deposit materials that will show The copyright forms Group registration

Almost all designs can be reg- what the designer, in fact, created. Most designs would be registered Unpublished works may be reg-
istered, whether published or Groups of unpublished designs on Form VA (which stands for “vi- istered as a group under a single
unpublished. One might ask why can be registered for a single sual arts”). If a designer wants to title for a single registration fee.
one should pay the application fee using an alternative form of register a work with both text and This will dramatically reduce the
fee (currently $35) if copyright deposit, such as slides or copies of design, Form VA should be used expense of registration, and no
protection already exists simply the designs. This greatly reduces if the design predominates and copyright notice need be placed on
by creating the design. There are the expense of registration, since Form TX if the text predominates. unpublished work. The following
several reasons: almost all designs the designs will not have to be Since these classifications are conditions must be met to allow
must be registered in order to registered again when published. only for administrative purposes, for group deposit:
sue, except if the design is not of rights will not be lost if an error
United States origin; registra- The Copyright Office maintains a is made in choosing the correct ■ The deposit materials must be
tion is proof that the statements website at www.loc.gov/copyright. classification. assembled in an orderly form.
in the Certificate of Registration Included on the site are down-
are true, such as that the designer loadable application forms and a Form VA is a simple two-page ■ The collection must have a single
is the creator of the design; and great deal of information about form with step-by-step directions title identifying the work as a
registration is necessary for the copyright, including the latest fee explaining how to fill it out. The whole, such as “Collected
designer to be entitled to the schedules. filing fee and copies of the work Designs of Jane Designer, 2009.”
statutory damages and attorney’s being registered should be sent
fees discussed earlier with respect with the application form to the ■ The person claiming copyright
to infringement. Registration Copyright Office, Library of Con- in each work forming part of the
allows the artist to make a record gress, Washington, D.C. 20559. collection must be the person
of the design and have that record There is also a Short Form VA that claiming copyright in the entire
held by a neutral party—the Copy- is even simpler than the Form collection.
right Office. Since registration is VA and can be used when the
so significant if a lawsuit is neces- designer is the only author, the ■ All the works in the collection
sary, the deposit materials that design is not work-for-hire and must be by the same person or,
accompany the application are the work is completely new. Reg- if by different people, at least
especially important. It is these istration is effective as of the date one of them must have contrib-
when an acceptable application, uted copyrightable material to
deposit and fee have all arrived at each work in the collection. No
the Copyright Office. Although the limit is placed on the number of
certificate of registration will be works that can be included in
mailed later, this will not change such a collection.
the effective date. If there is an
error in a completed registration It is important that a work registered
or if information should be am- when unpublished need not be reg-
plified, Form CA for supplemen- istered again when published. But,
tary registration should be used. if new material is added to the work
or it is changed into a new medium—
creating a substantially different
work from that registered—it would
be wise to register the work again to
protect the changed version.

84 85
Work-for-hire For freelancers, the categories tion of use, geography of use and Sources of copyright

Work-for-hire is a highly prob- of specially ordered or commis- any other description that makes information

lematic provision of the copyright sioned works that can be work- clear what the parties intend. Legal Guide for the Visual Artist
law. If a designer provides services for-hire include: a contribution Ownership of any physical objects (Tad Crawford) contains an
as a work-for-hire, or if a designer to a collective work, such as a contained in the work should also extensive discussion of copyright.
hires a supplier as a work-for-hire, magazine, newspaper, encyclope- be clarified, and may have a bear- Business and Legal Forms for Graphic
the party executing the work under dia or anthology; a contribution ing on whether sales tax has to Designers (Eva Doman Bruck, Tad
the work-for-hire status loses all used as part of a motion picture be charged. Crawford) has forms for copyright
rights, including the right to ter- or other audiovisual work; and applications, copyright transfers,
minate the rights transferred after a supplementary work, which Unless generous compensation licensing and specifying rights
the 35-year period provided under includes pictorial illustrations is given to cover all conceivable either with a client or a supplier.
copyright law. The work-for-hire done to supplement a work by future uses, the designer should
status can come into existence in another author, a compilation, an seek to transfer only limited The Copyright Office makes avail-
two ways: 1) an employee creating instructional text, test or answer rights to the client. The client’s able free information and appli-
a copyright in the course of the material for a test or work for use desire for work-for-hire or all cation forms such as Form VA for
employment; or 2) a freelancer in an atlas. rights is often for the purpose of a work in the visual arts. To obtain
creating a specially ordered or preventing the client’s com- this information, the designer
commissioned work, if the work Commissioned design rarely petitors from using the design or should request the Copyright
falls into one of several categories falls into a category that can be images in the design. The client Information Kit for the visual arts.
defined under copyright law and work-for-hire, as defined under can be protected against such The application forms and Copy-
both parties sign a written contract the copyright law. Corporate competitive use by a simple clause right Information Kit are available
agreeing to consider the artwork attorneys often rely on work-for- in the contract stating: “The from the Copyright Office, Library
as a work-for-hire. hire because they lack complete designer agrees not to license the of Congress, Washington, D.C.
understanding of the tradition of design or any images contained 20559. Forms from the Copyright
creative rights or experience in therein to competitors of the cli- Office can also be requested by
For a design firm this can create defining the limited rights that ent.” This might be accompanied calling a telephone hotline: 202
some problems. For example, their employers actually need. On by the client’s right of approval 707 9100. The public information
since most design firms are the other hand, some firms may over some or any licensing of the number for the Copyright Office is
businesses, this means that the use work-for-hire with the intent design and incorporated images. 202 707 3000. Also, as mentioned
partners in design firms do not of reselling the design in The designer would then have earlier, the Copyright Office has a
own the copyrights for the work some form. to include similar restrictions in website at www.loc.gov/copyright
they create. Since most partners contracts with suppliers. that offers information about
are employees of the firm, the firm Contractual safeguards copyright and the functioning of
owns those copyrights, just as it
Often the term “work-for-hire” the Copyright Office as well as
owns the copyrights created by any
is loosely used to mean a buyout downloadable forms.
other employee.
or the transfer of all rights. It is
If a partner wants rights to what important to understand that
he or she has created, a special work-for-hire is defined in the
contract will be necessary. Also, copyright law, but neither “buy-
a salaried employee may request out” nor “all rights” has a univer-
or negotiate a written contractual sally agreed upon definition. To
agreement that allows the em- avoid ambiguity, designers should
ployee to retain some copyright spell out the rights transferred by
ownership. type of use, media of use, dura-

86 87
USE
OF
PHOTOGRAPHY

Use of photography in design work involves


choice and responsibilities. With the
growth of digital libraries of images, stock
photography has become far more accessible
to every designer, although there are also
strong reasons to commission photography
specifically for a project. This chapter
reviews the options available to designers,
considerations in contracting for the rights
for use of photographic images and the
means of using photography while fully
respecting the intellectual property rights
of the photographer.

88 89
Contracting with a photographer Specifications and deadlines At the same time, the designer Fees and rights

It is important to decide whether To begin with, specifications for needs protection against the A professional photographer sells
the designer or the client will the images should be as clear and situation in which the designer is a license to use a photograph in
contract with the photographer, detailed as possible. What is the satisfied with the photography but particular circumstances; he or
since the contracting party will subject to be photographed? Will the client is not. Client, designer she does not sell the photograph
be liable for any money owed to the art director or designer give a and photographer all should make itself or the copyright to it. The
the photographer. If the client sketch to the photographer or be certain that each party will be photographer owns the opportu-
contracts directly, many of the present during the shoot for ap- fairly treated and benefit from the nity to use or sell the image in all
points made in this chapter would provals? Should the images be in project. One way to do this is to other uses, unless he or she sells
be relevant to the client instead black-and-white or in color? How involve the client in the decision- the copyright in writing prior to
of the designer. The designer’s many images are to be delivered? making process with respect to the photoshoot.
willingness to be the contracting In what format will the images the photography.
party will depend on such factors delivered—positive, negative, There must be agreement as to
as whether the photography bud- digital file? Any changes in the assignment the fee and what is purchased
get is relatively small compared should be documented in writ- for the fee. Most photographers
to the total design budget and The photographer must work ing. Even in the rush of meeting seek to sell only limited rights.
whether the client has proven to on schedule. Failure to do this deadlines and finishing work, If greater rights are desired,
be reliable with respect to paying should be a reason for the de- the careful practice is always to they will ask for a higher fee. If the
the designer in the past. Certainly signer to terminate the contract. have a written confirmation of designer is sensitive to this, the
the designer should not take the If the designer’s schedule allows any changes. This helps avoid best approach may be to ask for
risk of paying for photography if some flexibility with respect to the disagreements as to whether the limited rights. This should avoid
there is any risk the client won’t photographer’s deadline, then ill- assignment as delivered meets paying for usage rights that will
reimburse the designer. ness or other unavoidable delays the specifications. If the changes not be exploited.
might extend the photographer’s aren’t written down, it is easier
deadline. However, there must to forget exactly what was dis- On the other hand, the designer
be a deadline for when the work cussed or misinterpret what was must obtain all of the rights that his
should be delivered or else the intended. or her client needs. In the first in-
designer may use another photog- stance, the designer must consider
rapher. If even a short delay would what rights will be transferred to
be damaging, the designer might the client. Rights can be limited in
consider making “time of the many ways, including the duration
essence” in the contract, in which of use, geographic area of use, type
case the deadline will have no of product or publication, title
leeway. The designer will want of the product or publication, and
the contract to require that the whether the use is exclusive or
assignment satisfy the designer, nonexclusive. An important aspect
while the photographer will want of the grant of rights is whether
to include that the satisfaction be the work may be used in electronic
“reasonable” to avoid having to media (such as on a website or
do endless work to accommodate a DVD) as well as in traditional
an unreasonable designer. media. In electronic media, each
category of use (such as a ban-
ner ad, email blast or website) is
considered discrete use.

90 91
A photographer working on as- All rights and work-for-hire the allied creative professionals menced or if, due to the short
signment will expect reimburse- A client may want an all rights who will be asked to work on the notice of the cancellation, the
ment for direct expenses incurred contract. Having all rights would design project. Work-for-hire photographer will be unable to
in producing the images. The mean the client could use the vests the copyright in the client find other assignments for the
designer should carefully review work in any conceivable way. who is treated as the creator of the days that had been set aside for
the expenses to be reimbursed to However, on questioning the work and gains all the copyright the designer.
avoid the possibility of a dispute client, it often develops that the benefits that would normally
arising. Whether a cap can be client does not need all rights. belong to the creator. This type A different cancellation issue
placed on expenses, such as stat- Rather, the client wants to prevent of contract lowers standards arises if work is unsatisfactory.
ing that expenses shall not exceed competitors from using the protective of artists’ rights, has a Should the photographer be
the estimate by 10 percent, will photography (and, of course, the negative impact on the ability of given the first opportunity to
have to be negotiated along design). One approach would be creators to earn a livelihood and do a reshoot? Will there be any
with whether a markup is to be for the designer to promise by can have a demoralizing effect additional fee in that case?
charged by the photographer contract that no use will be made with respect to creativity. If the designer uses another
on some or all of the expenses. of the design in certain markets photographer, should the first
(The designer will face the same without first obtaining the In all cases, the designer would be photographer be paid anything
issues of cap and markups when written consent of the client. wise to use a written limited rights for the unsatisfactory work?
billing the client.) If the designer Another might be to agree that contract so that both parties These can be difficult situations
requires changes and this causes the client has exclusive rights know exactly what deal is being to resolve, even when both parties
reshoots, expenses may increase in those markets where the agreed to. make their best efforts to be fair.
dramatically. The designer has client faces competitors, but that
to be careful to not get caught in the client will not unreasonably Payments and cancellations Authorship credit and
a squeeze between a client with withhold from the designer Standard practices should copyright notice
a limited budget and an image (or photographer) the right to be documented in a written agree- There should be agreement as
cost which exceeds that bud- resell the image or design in a ment and should call for payment to whether the photographer will
get because of changes. When noncompetitive way. to the photographer within a cer- receive authorship credit for
expenses will be very substantial, tain number of days after delivery the photography that appears in
an advance against expenses may The designer may sometimes of the assignment (not publica- the final design. This would be
become part of the contract (in act as an intermediary—and, tion or printing of the images in expected in editorial or nonprofit
which case the designer would perhaps, as a mediator of sorts— the designer’s final work). This work, but is less likely for
want an advance from the client between the demands of the time period is often set at 30 days. advertising or corporate
sufficient to cover what is being client and the desire of the Any advances are subtracted from assignments. The same holds
paid on account to the photogra- photographer to retain rights the total bill, which should then true for copyright notice, which
pher). Whether or not sales tax and earn more money for greater be paid in a timely manner to would be much more likely for
will have to be paid, and who will usage. Designers must be careful the photographer. editorial or nonprofit usages
be expected to pay it, should also to make certain that their con- than for advertising or corporate
be resolved in the contract. tracts for rights with photogra- Provision should also be made for assignments. Again, the designer
phers and illustrators conform to what will happen if the assign- will have to ensure that the client
the rights that the designers have ment is cancelled. The designer and the photographer share the
contractually agreed to give should be able to terminate the understanding as to what will be
their clients. Ideally, therefore, assignment without liability done with respect to authorship
designers will resist clients that unless the photographer will be credit and copyright notice.
demand all rights or work-for- damaged in some way. This would
hire—both for themselves and for be the case if work has com-

92 93
A typical photo credit would appear The client or the designer may also including not only valuable origi- Resources
as: “Photograph by Sarah Pho- want the photographer to give a nal transparencies but also storage Legal Guide for the Visual Artist (Tad
tographer.” If the photographer warranty that the work is origi- media that contained digital ver- Crawford) and Business and Legal
is to receive a copyright notice, nal and not an infringement of sions of the work. If any physical Forms for Graphic Designers (Eva
this could take the form of “© copyright, an invasion of privacy, object is to be transferred in Doman Bruck, Tad Crawford) both
Sarah Photographer 2009.” Other libelous or otherwise unlawful. addition to the transfer of rights, offer sample contracts accom-
forms of copyright notice are also If the photographer gives such a the contract should specify the panied by extensive discussion.
possible, such as “copyright” or warranty, the photographer will ownership transfer. Pricing Photography (Michal Heron)
“copr.” The photo credit and copy- be subject to damages if any of gives instruction with respect
right notice would ideally be placed the warranties are found to not Assignment of money
to negotiation and includes
adjacent to the image, whether be true. and duties
pricing charts for different stock
horizontal or vertical, but can also The designer will need to be usages. The Graphic Designer’s Guide
be placed elsewhere as long as the The use of pre-existing images able to assign rights to the client. to Pricing, Estimating and Budgeting
reader will be able to relate them is another possibility for the Since the photographer has been (Theo Stephan Williams) discusses
to the image. If copyright notice designer. Use of stock images used based on his or her unique how to create a successful rela-
is not adjacent to the image, it avoids the many contractual issues style, it won’t be acceptable tionship with suppliers such as
might be wise to add the word that may arise when photography for the photographer to assign photographers. AIGA Professional
“photograph” in front of the is done on assignment. In using the work under the contract to Practices in Graphic Design (AIGA,
copyright notice. stock images the designer has another photographer. Tad Crawford) gives information
to be careful not to exceed the on fees, negotiating and dealing
Releases, warranties and license from the stock agency. If A creative relationship with suppliers. For more informa-
stock photography additional usage is needed, the de- tion and resources, please go to
signer has to go back to the agency The relationship between designer
Assignments often require and photographer can be highly AIGA’s website at www.aiga.org.
photographing people. If these and clear the rights by paying
an additional fee. In some cases creative. It can lead to visual solu-
images are used for advertising tions that are stunning and exceed
or trade purposes (such as on a the stock agency may limit use of
photographs because releases have the client’s expectations. For
product or for product packaging), creative relationships to thrive,
a release must be obtained from not been obtained from models.
Ignoring the agency’s restrictions however, there must be a basic
the person. This is true whether business understanding. A careful
or not the person is a professional as to use for advertising or trade in
such a case is inviting an inva- discussion of the creative goals
model. The release should be in and the business issues should be
writing. Although the photogra- sion of privacy lawsuit against the
designer and the client. followed by the signing of a written
pher will obtain the release, the contract. Such a contract grounds
release should protect the client both parties by resolving ambigui-
Ownership
and the designer as well as the ties and clarifying expectations. It
photographer. If either the de- Unless there is a special reason to is an important step in the shaping
signer or client is uncomfortable obtain ownership of preliminary of a harmonious partnership that
with the language in the photogra- materials used to create the leads to the creation of work of the
pher’s release, it would be wise to photograph, these would remain highest excellence.
ask for a second release to be the property of the photographer.
signed for the designer or client The photographer would also keep
(or both). ownership of any physical materi-
als submitted to the designer and
expect these to be returned,

94 95
STANDARD FORM
OF AGREEMENT FOR
DESIGN SERVICES

Every design project is different and the


best will result from trust between the client
and the designer. The most effective way to
assure trust meets both client and designer
expectations in an engagement is to codify
the relationship with a written agreement.
The standard agreement is adaptable to
unique circumstances while still drawing from
the best proven practices based on mutual
respect and clarity. It is a modular approach
that recognizes the different needs and
requirements of different types of engagements.

96 97
Standard Form of Agreement
for Design Services

Introduction:
AIGA Standard Form
of Agreement 101

Basic Terms and Conditions 125

Schedule A: Intellectual
Property Provisions 137

Supplement 1:
Print-specific
Terms and Conditions 141

Supplement 2:
Interactive-specific
Terms and Conditions 143

Supplement 3:
Environmental-specific
Terms and Conditions 145

98 99
Introduction:
AIGA Standard Form of Agreement

Welcome to the latest version of the AIGA Standard Form of Agreement for
Design Services. If you’re familiar with the previous versions, you’ll notice
that this one is quite different. It does not take a one-size-fits-all approach,
and it is not an extensive pre-printed document where you simply fill in
the blanks. Instead, it acknowledges that most design firms develop their
own custom proposal document for each project and are looking for an
appropriate set of terms and conditions to attach to it. When put together
and signed, the custom proposal document and its attached terms and
conditions comprise the binding agreement with the client.

With this in mind, the new focus of the AIGA Standard Form of Agreement is on
those terms and conditions. AIGA members are involved in many different
design disciplines. Because of this, the recommended terms and conditions
have been prepared in a modular format. This also helps to keep individual
agreements down to a more manageable size. The first two modules,
Basic Terms and Conditions and Intellectual Property Provisions, should be
used for all design assignments. An additional three modules are provided
as supplements that can be added to the agreement as needed: Print-
Specific Terms and Conditions, Interactive-Specific Terms and Conditions and
Environmental-Specific Terms and Conditions.

Prepare in your own style & format Then add the appropriate text modules from AIGA

Cover letter Proposal contents: Basic Terms Supplemental terms


Overview, Objectives, and Conditions for specific disciplines
Process, Milestones, plus Intellectual as needed
Fees, Expenses, Property Provisions
Work schedule,
Billing schedule,
Signature lines
100 101
This new format for the AIGA Standard Form of Agreement for Design Services Advance preparation and project planning
was developed by a team of industry experts: Don Brunsten (intellectual
property attorney, Don Brunsten & Associates), Jim Faris (co-founder A proposal is a detailed project document that defines the scope of work,
of The Management Innovation Group and former AIGA national board the process, the schedule, and the total price (usually in the form of a
member), Linda Joy Kattwinkel (intellectual property attorney, Owen, fixed fee). It is a discussion document where the designer puts forward a
Wickersham & Erickson), Frank Martinez (intellectual property attorney, recommended course of action for the client to consider. Many proposals
The Martinez Group) and Shel Perkins (design management consultant, go through several rounds of changes and negotiations before they
former AIGA treasurer and past president of AIGA San Francisco). are finalized. Some negotiations with the client may relate to project
It is being provided as a reference to all AIGA members. However, this specifications while other discussions might focus on the legal terms and
information is not a substitute for personalized professional advice from an conditions. The final goal is to have one comprehensive document that,
attorney. If you have specific legal questions, you should always seek the when accompanied by an appropriate set of terms and conditions and
services of appropriate legal counsel. signed by both parties, serves as your agreement for the project.

How to use it INITIAL STEPS FOR YOU

In general, the process of drafting, negotiating and finalizing an Start with some general preparation that is relevant to all of the work done
agreement with a client will follow this sequence of activities: by your firm:
■ Think about your creative process. Write down the ideal sequence of
■ Advance preparation and information gathering about the client activities —phases, steps and milestones — that allows you to produce
and the potential project your best work. If you are active in more than one practice area, you
■ Internal planning of budget and schedule may have several variations. Your own creative process should be the
■ Drafting a custom proposal document that the client will see framework that you use for planning and managing projects.
■ Attaching these AIGA modules for all design projects: Basic Terms and
■ Calculate a standard hourly rate. This is an important internal tool that
Conditions and Schedule A: Intellectual Property Provisions
you need in order to sketch out initial budgets. Rates vary from firm
■ Adding these AIGA supplements as needed: Print-specific Terms and
to firm based on the amount of overhead being carried, the number of
Conditions, Interactive-specific Terms and Conditions, Environmental-specific
hours available to devote to client projects and the target profit margin
Terms and Conditions included in the calculation. (A sample format for calculating an hourly
■ Reviewing the final AIGA checklist of options in the terms and rate can be found in the Graphic Artists Guild Handbook: Pricing and
conditions Ethical Guidelines.)
■ Presenting the agreement to the client and answering any questions
■ Negotiating any modifications requested by the client ■ Become familiar with standard terms and conditions appropriate to the
type of work that you are selling.
■ Finalizing the agreement with authorized signatures
Now you can zero in on the particular project that you are bidding on:
The following pages offer practical advice on the overall process and
■ Gather as much information as possible on the potential project.
discuss the important legal and financial issues to be addressed in the
If the client has provided you with an RFP document (a request for
“fine print” of any agreement. To help you with the jargon involved, basic
proposal), review all of the details carefully. Beyond this, you may
explanations of legal terms are included. However, these notes can only
want to complete your own form of project questionnaire to make sure
serve as a brief introduction to the issues involved. Depending on the type
that no important details are overlooked. This may involve additional
of work that you do and the size of your projects, some of the contractual
discussions with your client contact and possibly others at the client
issues can become rather complex. When finalizing an agreement with a
company in order to learn more.
client, you will of course want to have it reviewed by your attorney. With
that in mind, these notes end with some pointers on how to find the right ■ Now you’re ready to prepare a preliminary project plan and budget.
attorney and make the best use of his or her time and expertise. Even though you may be allergic to spreadsheets, it’s important to
get in the habit of using an internal planning worksheet to calculate a

102 103
“suggested retail” price for the project. This ballpark number has to Proposal document
be based on the scope of work required, your own step-by-step design
and implementation process, the size of the team that will be required, INFORMATION THAT IS SENT TO THE CLIENT
an estimated number hours for each team member (valued at your
standard hourly rate) and estimated outside purchases (including a Written proposals include specific details which vary quite a bit based
standard markup). Now you have to make a judgment call: adjust the on the individual project and the creative firm. However, there is
totals as needed in order to reflect market conditions and the ultimate a fairly standard structure for the proposal document itself. Typical
value of the work to the client. components include:
■ You’ll also need to draft a preliminary work schedule that shows the ■ An overview of the client situation (their industry and competitive
number of work days or work weeks required (don’t forget to factor challenges)
in your prior commitments to other clients). A good approach is to do ■ A description of the scope of work and specific objectives for this
this as a Gantt chart that shows blocks of time and indicates project project (the immediate need that must be addressed and the specific
activities that can happen concurrently. Whenever possible, it’s best targets that must be achieved)
to avoid locking in specific start dates, approval dates or completion
deadlines, because all of them are sure to change. It’s better to plan ■ The process that you are recommending (for each individual phase, spell
the schedule in terms of the elapsed time necessary. out what is included and what is not — describe the sequence of steps,
the deliverables and milestones, the number of creative directions
This internal preparation and planning has been just for you. The next that you will be showing, the number of revisions or refinements that
step is to begin drafting a document that the client will see. are included, the format for delivery, the necessary timeframe and
a subtotal of fees and expenses; along the way, be sure to clarify the
client’s responsibilities and explain how the client will be integrated
into the process)
■ A recap of the total timeframe, total fees and total expenses (plus any
applicable taxes)
■ A billing plan (a simple list of invoice amounts and when they will
occur during the project — the payment terms will be explained in the
terms and conditions)
■ Appropriate terms and conditions (discussed in detail below)
■ Two lines for authorized signatures at the end of the document
(submitted by and accepted by)
You may want to include some extra items, particularly if the client’s
approval process involves routing the proposal to an executive who has not
met you:
■ Capsule bios of senior team members
■ Background information on your design firm’s capabilities and
your credentials
When finalizing a proposal package, always include a cover letter. It will be
written last. Keep it short, professional and enthusiastic. Don’t repeat any
of the details that are in the proposal itself. The letter is simply an invitation
for a follow-up conversation and it should indicate your willingness to
update or revise the scope of work if necessary.

104 105
Next, consider the best way of getting the proposal package to the client. expenses while others may simply request the right to audit your project
Whenever possible, present it in person. This allows you to explain the records if they ever feel it’s necessary to do so. It’s not unusual for a client
contents, to address any concerns that the client might have, and to begin to require pre-approval if a purchase exceeds a certain amount. If you are
building a positive professional relationship. requesting a mileage reimbursement for automobile use, you may want to
use the standard rate published each year by the Internal Revenue Service
Notes on basic terms and conditions (available at www.irs.gov). In most design firms, out-of-pocket travel
expenses for projects are passed through at cost but all other expenses
This first module of the AIGA system includes general terms and are subject to a markup. State what percentage you use for your standard
conditions that apply to all creative disciplines, addressing such essential markup (20 percent is common). If a client wants to avoid a markup on a
issues as payment terms, client changes and portfolio usage. These large expense, consider allowing them to purchase it directly. However,
shared issues are discussed in detail below. Some descriptions of related your fee for services must cover the time that you put into vendor sourcing
concepts are included as well in order to provide additional context. and quality control. Many design firms do not want to take on the potential
legal liabilities of brokering expensive third-party services. If something
Definitions goes wrong with a third-party service such as printing, it’s much safer for
Important terms such as “Agreement” and “Deliverables” need to be used the designer if the client made the purchase directly.
in a consistent way in both the proposal document and the attached terms
and conditions. Internal conflicts in terminology will cause confusion Invoices
and weaken the agreement from a legal standpoint. After a term has been Your schedule for project billings should be stated in the body of the
defined, it will be capitalized each time that it is used. proposal. Progress billings can be based on phases or milestones, or they
can be weekly or monthly. You might also want to specify that you will print
Proposal hard copies in duplicate and send them via regular mail to the accounts
The terms and conditions should not restate any of the project specifications payable address given to you by the client.
already included in the body of your proposal document, but they should
include an expiration clause. This is a statement of how long the unsigned Payment terms
offer will remain valid. If the client sits on the proposal for a month or two, When you send an invoice to a client, full payment is due within a certain
you may need to update the document to reflect changes in your pricing number of days, counting from the day that the invoice was issued. For
or availability. example “Net 30” means that the client must get full payment to you within
30 days. Some corporate clients stretch this a bit by saying that the days
Fees should be counted from the date they receive the invoice. It’s common for
If you are charging for your services on a fixed-fee basis, the total amount design firms to establish client payment terms of “Net 15” because client
will be specified in the body of the proposal. cash must be received in time for the design firm to pay for related project
supplies purchased from vendors on terms of “Net 30.” Related to this, you
Taxes may want to put a limit on the amount of credit that you are willing to extend
It’s a good idea to state that the client is responsible for any applicable to a new client. This would be a judgment call based on the client’s credit
sales or use taxes, even if they are calculated after the fact (for example, history and your own financial needs. You should state that a project may be
during a subsequent audit of the designer’s tax returns). put on credit hold if required payments are not made.

Expenses and additional costs Late payment penalties


Every project will involve at least a few expenses. They may be small like Most design firms charge clients interest on overdue payments. The
reimbursements for photocopies or taxi rides, or they may be large like standard rate is 1.5 percent per month (which is the equivalent of 18 percent
the purchase of photography. You should spell out for the client exactly per year). Separate invoices are not generated for the interest amounts.
how project expenses will be handled and whether or not estimated Instead, they appear as line items on monthly statements sent to clients
amounts for those expenses have been included in your proposal. Some to remind them of unpaid invoices. When client payments are received,
clients may want to receive photocopies of receipts for reimbursable the funds are applied first to the interest charges, and then to the unpaid
balance on each open invoice, starting with the oldest.

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Full payment Cure
If you have agreed that you will be transferring some or all rights to your Related to testing and acceptance is the concept of cure. If the client
client, you should definitely make any transfer of rights contingent upon notifies you that the work is not acceptable, you should have the
receipt of full payment from the client for your services. opportunity to effect a cure. This means to repair, correct or re-design
any work that does not conform to the project specifications in order
Changes to make it acceptable to the client.
It’s fairly common for minor client changes to be billed on a time-and-
materials basis, so your standard hourly rate(s) will be listed here. You Client responsibilities
might also want to state that your standard rates will not change without If a client has never purchased creative services before, they may not
30 days advance notice to the client. When a client requests additions or be aware of how extensive and important their own involvement in the
modifications, you should respond with a change order form. A change process will be. You’ll want to point out what is required of them in terms
order is a document drafted by the designer to acknowledge a client request of information, content, schedules, decision-making and approvals.
that is outside of the original scope for the project. The designer describes
the amount of additional time and money required and sends the change Accreditation/promotions
order to the client for review and an authorized signature. It is essentially This has to do with receiving proper credit for the work and being able
a mini-proposal. You’ll want to reference the original proposal and state to add it to your design portfolio. You should ask for a credit line to be
that the same terms and conditions will apply. Compensation for a change included in the work itself. You should state that, once the project has been
order can be calculated on a time-and-materials basis or as a fixed fee. completed and introduced to the public, you will have the right to add the
As the work involved is completed, each change order should be invoiced client’s name to your client list and the right to enter the work into design
separately. If a client requests substantial changes, however, it’s sometimes competitions. You’ll also want to be able to show and explain portions
cleaner and less confusing to start all over with a new proposal for the entire of the completed project to other companies when you are pitching new
project. You may want to define a substantive change as being anything that business. Sometimes clients who are in highly competitive industries have
exceeds a certain percentage of the original schedule or budget (such as 10 concerns about this. They may ask for the right to review and approve such
percent) or a certain dollar amount (such as $1,000), whichever is greater. promotional activity on a case-by-case basis. If you have licensed the final
art to the client rather than making a full assignment of rights, and the work
Timing does not fall within the category of work-for-hire (defined below), you are
It’s paradoxical that the typical client will negotiate for a very tight legally entitled to show the work in your portfolio. As a professional courtesy,
schedule yet, in the middle of the project, that same client may cause however, you will want to be sensitive to client concerns. (For more
serious delays by failing to provide necessary information, materials information about ownership and licensing, see Schedule A: Intellectual
or approvals. Most design firms specify that if a client causes a lengthy Property Provisions.)
delay it will result in a day-for-day extension of the project’s final
deadline. During that client delay, you may also have to reassign some of Confidential information
your resources to other projects, if you have any. You might have cleared In order for these terms and conditions to be complete and comprehensive,
the decks for the fast-track project by delaying or turning down other confidentiality should be included here even if you’ve already signed a sep-
assignments. The danger for you as a businessperson is that an unexpected arate confidentiality and non-disclosure agreement (perhaps during your
delay could mean that you’re temporarily unable to produce billable hours. very first meeting with the client). Depending on the type of work that you
To offset this risk, some creative firms attempt to charge a delay penalty do, you may want confidentiality and non-disclosure to be mutual so that
or a restart fee. You may want to raise this issue as a negotiating point. your own proprietary information is protected as well.
However, most clients are not very receptive to the idea.
Relationship of the parties
Testing and acceptance Your agreement should reiterate the fact that you are not an employee of
All work that you deliver to the client should be considered accepted your client and you are not forming a joint venture or partnership with
unless the client notifies you to the contrary within a specified period of them. As an outside supplier of services, you are functioning as an
time (usually 5–10 days). independent contractor. You will also want the ability to bring in your
own assistants or agents as needed.

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Work made for hire No exclusivity
Discussions with your client about independent contractor status You may want to add that the relationship between you and the client is
and about ownership and use of project deliverables are sometimes not an exclusive one. You sell services to a range of clients and some of
complicated by confusion over the related concept of work-for-hire. them may be competitors. If a company wants to be your only client in
This phrase comes from U.S. copyright law. It refers to original work made a particular category, your pricing will have to reflect that. An exclusive
by an employee within the scope of his or her job, in which copyright relationship would require you to turn down projects from similar firms.
ownership automatically belongs to the employer. However, it can also refer Higher rates are necessary in order to offset that lost business.
to original work made by an independent contractor or a design firm, in
which copyright ownership might automatically belong to the client. This Warranties and representations
is only true if the work meets very specific criteria—it must be specially A warranty is a promise in a contract. It is a written guarantee that the
ordered or commissioned, and it must fall within one of nine categories: subject of the agreement is as represented. As a designer, you might
warrant that your work is free from defective workmanship or that it is
■ A contribution to a collective work (such as a magazine, an anthology or original and does not infringe the intellectual property of others. If some
an encyclopedia) portion of the work turns out to be defective (for example, a problem
■ A work that is part of a motion picture or other audiovisual work (such with some line of custom computer code in an interactive project) then
as a website or multimedia project) it is your responsibility to repair or replace it. Legal issues related to
■ A translation originality can be a bit more challenging. You can only infringe a copyright
■ A supplement prepared as an adjunct to a work created by another author if you knowingly copy someone else’s work. However, trademark, trade
(such as a foreword, an appendix or charts) dress and patent rights can be infringed even if you create your work
■ A compilation (a new arrangement of pre-existing works, such as independently. Thus, it’s best to limit your warranty of non-infringement
a catalog) to “the best of your knowledge.” If you are going to provide a guarantee
■ An instructional text (whether it is literary, pictorial or graphic) of non-infringement without such limitation, then at some time before
the end of the project a formal search should be conducted to determine
■ A test
whether or not your work inadvertently resembles a third party’s
■ Answer material for a test
trademark or patent (“prior art”). It’s best to place responsibility for this
■ An atlas
type of prior art search on the client. If you agree to arrange for the search,
Also, a written agreement must be signed by both parties saying that it then your schedule and budget for the project must include the hiring
is a work made for hire. If the project doesn’t meet all of these criteria, of an attorney or legal service to actually carry it out. It’s best for warranties
work-for-hire does not apply. Copyright will belong to you unless you and representations to be reciprocal. The client should make the same
assign it to your client. (More information about copyright is available promises to you for any project components that they supply.
in the chapter “Guide to Copyright,” page 78, and directly from the U.S.
Copyright Office at www.copyright.gov.) Infringement
Infringement is the unauthorized use of someone else’s intellectual
No solicitation property. It is the opposite of seeking and receiving permission, using
It doesn’t happen very often, but sometimes a client is so pleased with correct notice of ownership, and contracting for payment of a royalty
the work of a particular member of the designer’s team that they will or fee. Even though the infringement may be accidental (you may
seek to establish a direct relationship with him or her. Some people refer independently create a logo for your client that looks like someone else’s
to this as “cherry picking.” If a client recruits one of your team mem- trademark), there may be infringement liability, and the infringer may
bers away from you, you should at least be entitled to a placement fee for be responsible for paying substantial damages and stopping the use of the
having made the introduction. Beyond that, you should also consider the infringing work.
impact on your operations. If your most experienced and productive team
member is no longer available, your business may be damaged by the Disclaimer of warranties and use of ALL CAPS
unexpected interruption to your activities. If an agreement includes a disclaimer of any warranty, many states
require by law that the disclaimer language be sufficiently “conspicuous”

110 111
in the document. It needs to stand out in such a way that any reasonable Damages
consumer would notice it. This usually means that the disclaimer must Damages are financial compensation for loss or injury suffered by a
be printed in all capital letters, or in type that is larger or in a contrasting plaintiff (the person suing). The amount of money awarded in a lawsuit
color. If you do not follow these guidelines, you run the risk of making can vary greatly. There are several different categories of damages,
the disclaimer invalid. including the following: actual damages, such as loss of money due on a
contract; general damages, which are more subjective and might relate to
Indemnification loss of reputation or anticipated business; and punitive damages, which
In the event that you breach any warranty that you have given, you agree may be awarded if the defendant acted in a fraudulent way.
to provide security against any hurt, loss or damage that might occur.
You would have to make the client “whole” by giving them something Term and termination
equal to what they have lost or protecting them from any judgments or The normal term of a project will begin with the signing of a written
damages that might have to be paid to third parties, along with attorney’s agreement and end with the client’s acceptance of your completed
fees. For example, you might be asked to provide indemnity against third- services. If something happens in the meantime to make cancellation
party infringement claims. At the same time, however, you need to have necessary, the agreement must describe in advance the process for
the client indemnify you against any breach of warranties that they have doing that, from notification through calculation of your final invoice.
made. Indemnification is a very important issue for designers because That final billing might cover time and materials for actual services
the scope of potential liability can be considerable. performed through the date of cancellation, or it might be a lump-sum
cancellation fee, or perhaps a combination of the two. Cancellation also
Liability raises questions about ownership of the unfinished work. Typically the
Liability means legal responsibility for the consequences of your acts designer will retain all preliminary art, including any studies and comps
or omissions. Your accountability to the client may be enforced by civil already rejected by the client, while the client might receive the most
remedies or criminal penalties. For example, a web developer who has recent approved version of the work in process.
agreed in writing to complete an e-commerce site by a specific date will
have liability to the client if the project is not completed on time. General items

Limitations on liability and use of ALL CAPS Most of the legal issues addressed in this section of the terms and
Again, if an agreement includes a limitation on liability, many states conditions are fairly self-explanatory. However, the following information
require by law that the limitation language be sufficiently “conspicuous” may be helpful.
in the document. It needs to stand out in such a way that any reasonable
consumer would notice it. This usually means that the limitation must be Force majeure
printed in all capital letters, or in type that is larger or in a contrasting This is a French term that means “superior force.” It refers to any event
color. If you do not follow these guidelines, you run the risk of making or effect that cannot be reasonably anticipated or controlled. If such an
the limitation invalid. It’s smart for a designer to ask a client to agree that event occurs (for example, a war, a labor strike, extreme weather or an
they may not recover any damages from you in excess of the total amount earthquake) it may delay or terminate the project without putting the
of money agreed to in the proposal. While it’s possible for you to limit the designer or client at fault.
amount that each of you might owe to the other in this way, you should
keep in mind that you cannot contract away the rights of any third party to Governing law
make a claim. This has to do with jurisdiction. You must identify the state whose laws
will govern the signed agreement. Your client will usually request the state
Remedy where their main office is located.
A remedy is the legal recourse available to an injured party. It may be
stipulated in an agreement or a court may order it. A remedy might
require that a certain act be performed or prohibited, or it might involve
the payment of money.

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Dispute resolution Notes on schedule A: Intellectual property provisions
There are three standard types of dispute resolution. Here is a brief
description of each one: Every designer produces original work that is covered by copyright
protection, and additional work that could possibly be registered under
■ Mediation is a non-binding intervention between parties in an trademark or patent laws. Because of this, every design contract needs to
informal setting in order to promote resolution of a dispute. It involves address the issues of ownership and usage of intellectual property. These
the active participation of a third party (a mediator) who facilitates can be negotiated in a variety ways, based on the nature of the work and
discussion in order to clarify issues, find points of agreement and the specific needs of the client.
encourage cooperation. A commitment to mediation is often included
in contracts. There are professional mediators and lawyers who offer Preliminary art versus final art
mediation services. There is an important distinction to be made between preliminary and
final art. Early in each project, a designer may produce a lot of discussion
■ The next step beyond mediation is arbitration, in which an impartial materials (such as sketches, rough layouts, visualizations or comps).
third party (an arbitrator) hears both sides of the dispute in an out-of- These are prepared solely for the purpose of demonstrating an idea or a
court setting. The arbitrator is an attorney who acts much like a judge, message to the client for acceptance. Normally the client does not receive
listening to both sides of the story but not actively participating in legal title to or permanent possession of these items, so it’s important for
discussion. You and your opponent will have the opportunity to present your contract to be clear on this point. Many preliminary concepts will
evidence and witnesses. After hearing the facts, the arbitrator will later be modified or rejected entirely. Usually only one concept will be
make a decision. In your contract, you will specify whether the decision taken through to completion and it is only the approved and finished final
of the arbitrator is binding or non-binding. Binding arbitration art that will be delivered to the client.
imposes a legal obligation on the parties to abide by the decision and
accept it as final. Arbitration proceedings are held in an attempt to Third-party materials
avoid a court trial. However, contract-required arbitration may later If intellectual property owned by a third party is to be used in a project
be converted into a legal judgment on petition to the court. The fees (for example, an illustration or a photograph), the designer should state
involved might be large (depending on the dispute, they could easily that the client is responsible for respecting any usage limitations placed
range from $3,000 to $20,000 or more), but usually they are less than on the property. You may even want the client to negotiate usage rights
those involved in pursuing a lawsuit. For the sake of convenience, with the third party and make payments directly to them.
many contracts identify a large, national arbitration service to be used
in the event of a dispute. However, it may be preferable for you to Trademarks
replace this national name with a local name, particularly if you can Issues related to trademarks are discussed in the warranties and
find a service that is geared toward the arts. infringement sections above.

■ Litigation means that you are pursuing a lawsuit through the court Designer tools
system in order to resolve a dispute. The time and expense involved This deals with the issue of background technology. If any code that is
may be considerable. proprietary to the designer is necessary to develop, run, display or use the
final deliverables, then the designer needs to retain ownership of it while
Attorneys’ fees granting a non-exclusive license for the client to copy and use it. This way
When a decision has been reached concerning a dispute, either through you can use that same technology on any other clients’ projects.
arbitration or litigation, the losing side may be liable to pay the winning
side’s costs and attorneys’ fees. Under copyright law, a winning plaintiff License
is entitled to recover his or her attorneys’ fees if the copyright was regis- A license is a limited grant by a designer to a client of rights to use the
tered before the infringement occurred. For other types of liability, the intellectual property comprising the final art in a specified way.
obligation to pay the prevailing party’s legal expenses must be established
in your contract.

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Scope of license Notes on supplements
The extent of the license that you grant will vary based on the type of
work involved. The rights may be limited to use on certain products, Beyond the basic issues discussed above, additional language may be
in particular media, in a certain territory, and/or for a specified time needed in the agreement to clarify issues that are specific to a particular
period. Other basic limitations include whether or not you will allow the design discipline. For example, web developers have particular concerns
client to modify your work in any way, or to turn around and license the that are different from those of packaging designers. Out of the many
work to a third party without your permission. If the client later decides possible variations, we have focused in on three areas that we feel will
that they need additional rights, they will have to come back to you, be most relevant to the majority of AIGA members. Most of the items
renegotiate and pay additional fees. in the supplements are fairly self-explanatory. However, the following
information may be helpful.
Exclusive license
If a license is exclusive it means that even though you have retained SUPPLEMENT 1: PRINT-SPECIFIC TERMS AND CONDITIONS
ownership of the work, you will not be giving permission to anyone else
to use it. This means that you will not be able to generate additional Samples
licensing income from other sources. Because of this, designers need to You will want to specify the number of printed samples to be provided to you.
negotiate higher prices for exclusive licenses.
Finished work
Liquidation for unlicensed use In the printing industry, it’s not unusual to encounter slight variations
When licensing rights, you may want to consider agreeing in advance on of specifications or materials (for example, substitution of a comparable
the amount of damages that would be payable by the client upon a breach paper stock due to limited availability) as well as a variance of plus or minus
of contract. These are called liquidated damages. At some point in the 10 percent on the final, delivered quantity. These should be considered
future, the client may be tempted to exceed the original scope of the normal and acceptable. Much more information is available about standard
license that you have granted. Instead of coming back and renegotiating trade practices in the printing industry from organizations such as the PIA
with you as they should, they might just begin unlicensed usage. (It’s a (Printing Industries of America) and the Graphic Arts Technical Foundation.
challenge that is faced all the time by stock photography businesses and
illustrators.) Since you can’t know in advance the extent of the actual SUPPLEMENT 2: INTERACTIVE-SPECIFIC TERMS AND CONDITIONS
damages that would be caused by the unlicensed usage, the amount of
money to be paid is calculated as a multiple of the original contract price Support services
(300 percent is common). An agreement on liquidated damages can help If you’re bidding on a website and the scope of services described in
to avoid potential lawsuits and serve as an incentive for the client not your proposal includes testing, hosting and/or maintenance, you are
to exceed the scope of the license. However, you’ll want to weigh your other taking on additional legal responsibilities that need to be described in
options carefully. If you reserve the right to sue for breach of contract or the agreement. Try to limit any additional liability as much as possible.
infringement, it’s conceivable that the amount of money awarded to you in On all interactive projects, you’ll want to be very specific about how much
a lawsuit could be higher. support or maintenance you will provide after delivery, and whether or
not those services will be billed in addition to the original contract price.
Assignment of rights
An assignment is a full transfer of intellectual property rights to your Compliance with laws
client. It might include copyright, patent, trademark, trade dress or other Section 508 of the Workforce Investment Act of 1998 is of particular
types of intellectual property. For example, when a new corporate identity importance to user interface designers as well as software and hardware
is developed and sold to a client, the sale typically includes an assignment developers. This law requires electronic and information technology
of all rights. The client will go on to complete U.S. and international purchased by the U.S. government to be accessible for people with
registration of copyright, trademark, patent and other rights in its own disabilities. It sets accessibility and usability requirements for any
name. Designers should charge a higher fee for any project that involves websites, video equipment, kiosks, computers, copiers, fax machines
a full assignment of rights.

116 117
and the like that may be procured by the government, thereby essentially Final checklist
affecting all such products in the American market. (The United Kingdom
and Japan have also put accessibility guidelines into place.) Before you send the draft agreement to the client, look through it one
more time for quality control purposes. In the terms and conditions
SUPPLEMENT 3: ENVIRONMENTAL-SPECIFIC TERMS AND CONDITIONS pages, there are several blanks that need to be filled in and some very
important options need to be selected.
Photographs of the project
After completion of an environmental/3-D project (such as a signage Basic Terms and Conditions
system, a trade show booth, a retail interior or an exhibit) you need the 2. Number of days that the unsigned proposal will remain valid.
right to photograph the result. This involves being able to access it and
take your photographs under optimal circumstances. 3.2 Standard markup percentage for expenses (and perhaps standard
rate for mileage reimbursement).
Additional client responsibilities 3.4 Number of days allowed for payment of invoices.
Environmental design projects often require various types of government
4.1 Hourly billing rate to be used for general client changes.
approval, such as building permits or zoning reviews. Be sure to state that
the client is responsible for these. 4.2 Percentage of original project schedule or budget that will be used to
determine whether or not changes are substantive instead of general.
Engineering and implementation 12.5 Name of state identified for governing law.
You will be providing specifications for materials and construction
details that will be interpreted by other professionals, such as architects, 12.8 Identify which supplements are attached, if any.
engineers and contractors. Typically the client will contract and pay for Last Add your name, signature and date.
such implementation services directly. Your agreement should include a
disclaimer that you are not licensed in those fields and that responsibility Schedule A: Intellectual Property Provisions
for the quality, safety, timeliness and cost of such work is the responsibility
Choose only one of these three options:
of the client and the architect, engineer or contractor involved. The client
should indemnify you against any claims in this regard. IP 2.A (1) (a) and IP 2.1
■ A license for limited usage, client may not modify the work.
Compliance with laws ■ Indicate whether it is for print, interactive or environmental.
Your project may be subject to the Americans with Disabilities Act ■ Describe the category, medium, duration, territory and size of
(ADA), which is a civil rights act that affects private businesses as well initial press run.
as governmental organizations. ADA requirements are of particular ■ Indicate whether the license is exclusive or nonexclusive.
importance to industrial designers, interior designers and architects.
IP 2.A (1) (b) and IP 2.2
■ A license for unlimited usage, client may not modify the work.
Client insurance
■ Indicate whether it is for print, interactive or environmental/3-D.
Ask your client to provide you with proof that they have adequate
insurance coverage in place for the duration of the project (one million ■ (This license is exclusive.)
dollars is a common minimum amount). IP 2.A (1) (c) and IP 2.3
■ A license for unlimited usage, client may modify the work.
■ Indicate whether it is for print, interactive or environmental/3-D.
■ (This license is exclusive.)

And, with any of the three options above, be sure to include the following
liquidation clause just in case the client later exceeds the usage rights that
you have granted:

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IP 2.A (2) and IP 2.4 Product liability
Fill in the percentage that will be used to calculate the amount of If you are working on the development of a product that will eventually
additional compensation. be sold to the public, this will be an important issue. Your client may ask
to have it included in the agreement. Product liability refers to the legal
Or skip all of the above and go directly to: responsibility of product designers, manufacturers, distributors and
sellers to deliver products to the public that are free of any defects that
IP 2.B and 2.5 could harm people. If a product is defective, the purchaser will probably
This assigns all rights to the client, with no limitations. sue the seller, who may then bring the distributor or manufacturer or
product designer into the lawsuit. Any one of the parties may be liable for
Supplement 1: Print-specific Terms and Conditions damages or may have to contribute toward a judgment.
P 1. Enter the number of printed samples that you want to receive.
Designer insurance
Supplement 2: Interactive-specific Terms and Conditions Large clients often specify minimum insurance levels for the designer’s
I 1.1 Enter the number of months in the warranty period and enter the business. Standard business requirements include general liability,
number of support hours to be provided at no additional cost. workers comp and automobile coverage. In addition, you may need to
carry professional liability insurance to cover such things as intellectual
I 1.2 Enter the number of months in the maintenance period and property infringement or errors and omissions. You’ll need to analyze
enter the flat fee to be charged per month, or the hourly billing your own needs in this area and do some research with an independent
rate for maintenance. insurance agent. Certain types of professional liability coverage may be
limited in scope and rather expensive. If designer insurance requirements
Supplement 3: Environmental-specific Terms and Conditions are added to the agreement, you must provide proof of coverage in the
3D 6. Insurance requirement for the client: enter a dollar amount. form of a certificate of insurance that is sent from your insurance agent
directly to the client.
Negotiating
ADDENDUM TO THE AGREEMENT
Present the draft agreement to the client in person, if possible, so
that you can explain the contents and answer any questions. Don’t be There are two ways to record the changes that result from your
surprised if they ask for modifications or additional items to be included. negotiations with the client. The most direct is to go back into the body
Here are some of the issues that may come up: of the agreement and change the original language. This is, in fact, what
you should do for all changes that relate to the scope and specifications in
Pricing the proposal document at the front of the agreement. However, things can
Often the initial client response will be to ask for a lower price. It’s best become quite confusing if you start to rewrite the attached terms and
for you to avoid getting into a discussion of standard hourly rates. Discuss conditions. It is sometimes better to list negotiated changes to the terms
the scope of work instead. Focus on the main objectives. Can portions of and conditions on a separate sheet, called an addendum. The addendum
the project be scaled back? Are there components that can be broken out must clearly describe exactly what is being changed and it must not create
as later projects? Reducing the scope of work will reduce the overall price. any contradictions or ambiguities. If you do you go back into the original
terms and conditions and make the changes directly, then you must be
Deposits cautious when you are drafting your next client agreement. If you’re in a
Whenever possible, you should ask for a deposit at the beginning of a hurry, it’s all too easy to copy the modified terms by mistake. Be sure that
project. There are different approaches to this. Some designers apply the you always go back to the standard language and not your most recent adap-
deposit to the first progress billing (making it essentially a pre-payment tation. The original text must always be your starting point—otherwise
of phase 1). Others state that the deposit will be held until the end of project you can stray quite far from the original intent.
and applied to the final billing. If that’s the case, point out that no interest
will be paid while it is being held. If the project is cancelled, the deposit will
be refunded less any amounts due to the designer.

120 121
NEGOTIATING JUST ONCE FOR THE ENTIRE RELATIONSHIP received from or sent to the client. Gather sample documents from your
Terms and conditions can be negotiated separately for each and every industry and become familiar with the basic legal issues relevant to
project, or they can be negotiated just once for the entire relationship. the creative services that you offer. You may be able to use one of these
If you start with a complete set and state that it will apply to all projects, reference documents as a draft for further discussion with your attorney.
then future proposals can just refer back to it. This can save on paper- Be completely honest and ask questions about anything that is not clear
work, time and legal expenses for both you and your client. to you. Together you will then craft a final version to send to your client.

Finding and working with an attorney


If your client is a small business, they may respond with some basic
questions that you will have no trouble answering. With large clients
It can be a challenge to find the right attorney and to use his or her time though, you may find that your document is routed to an in-house legal
in an efficient way. Most attorneys specialize in a single category of law, department. If questions come to you from an in-house attorney, consider
such as real estate or labor law. As a creative professional, you need to having that person negotiate the fine points directly with your own lawyer.
find an attorney who specializes in issues related to intellectual property If the in-house counsel is a specialist in some other area of law, your
(copyrights, trademarks, patents, trade secrets and moral rights). intellectual property attorney can explain the context for the agreement
Attorneys are licensed state by state, so you need to find one in your own language that you are requesting. Attorney-to-attorney negotiation
area. Start your search by visiting these online directories: creates additional expense, but if the resulting terms and conditions can
be accepted as the basis of an ongoing relationship, then you won’t have
■ Volunteer Lawyers for the Arts to go through the process a second time.
www.vlany.org
(A nonprofit listing of legal resources for artists in 25 states in the
United States, plus Canada and Australia)
■ Martindale-Hubbell
www.lawyers.com
(A commercial directory of U.S. and Canadian attorneys that you can
search by specialty and location)
■ FindLaw
www.findlaw.com
(A searchable commercial database of attorneys, along with articles on
various legal topics)

It’s a good idea to look for an attorney who has other designers as clients.
Speak with established members of your own design community—one of
them may be able to provide you with a local recommendation. Seek out
an appropriate attorney when you are first establishing your business.
Getting preventative advice on basic issues is much better than waiting
until you’re already in some sort of legal difficulty.

Initial discounts are sometimes available through groups such as Volunteer


Lawyers for the Arts, but in general legal services are not inexpensive.
Attorneys may charge a flat fee for assisting with certain basic transactions
such as setting up an LLC, but for the most part services are billed on a
time-and-materials basis. For this reason, you need to be efficient in the
way that you interact. Make the best use of your attorney’s time by being very
well prepared. Bring copies of any correspondence that you have already

122 123
Basic Terms and Conditions

1. DEFINITIONS

As used herein and throughout this Agreement:


1.1 Agreement means the entire content of this Basic Terms and
Conditions document, the Proposal document(s), Schedule A, together
with any other Supplements designated below, together with any exhibits,
schedules or attachments hereto.
1.2 Client Content means all materials, information, photography,
writings and other creative content provided by Client for use in the
preparation of and/or incorporation in the Deliverables.
1.3 Copyrights means the property rights in original works of
authorship, expressed in a tangible medium of expression, as defined
and enforceable under U.S. Copyright Law.
1.4 Deliverables means the services and work product specified in the
Proposal to be delivered by Designer to Client, in the form and media
specified in the Proposal.
1.5 Designer Tools means all design tools developed and/or utilized
by Designer in performing the Services, including without limitation
pre-existing and newly developed software including source code, Web
authoring tools, type fonts, and application tools, together with any other
software, or other inventions whether or not patentable, and general
non-copyrightable concepts such as website design, architecture, layout,
navigational and functional elements.
1.6 Final Art means all creative content developed or created by
Designer, or commissioned by Designer, exclusively for the Project
and incorporated into and delivered as part of the Final Deliverables,
including and by way of example, not limitation, any and all visual designs,
visual elements, graphic design, illustration, photography, animation,
sounds, typographic treatments and text, modifications to Client Content,
and Designer’s selection, arrangement and coordination of such elements
together with Client Content and/or Third Party Materials.
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1.7 Final Deliverables means the final versions of Deliverables provided transportation, meals, and lodging, incurred by Designer with Client’s
by Designer and accepted by Client. prior approval.
1.8 Preliminary Works means all artwork including, but not limited to, 3.3 Additional Costs. The Project pricing includes Designer’s fee only.
concepts, sketches, visual presentations, or other alternate or preliminary Any and all outside costs including, but not limited to, equipment rental,
designs and documents developed by Designer and which may or may not photographer’s costs and fees, photography and/or artwork licenses,
be shown and or delivered to Client for consideration but do not form part prototype production costs, talent fees, music licenses and online access
of the Final Art. or hosting fees, will be billed to Client unless specifically otherwise
1.9 Project means the scope and purpose of the Client’s identified usage provided for in the Proposal.
of the work product as described in the Proposal. 3.4 Invoices. All invoices are payable within ________ (__) days of receipt.
1.10 Services means all services and the work product to be provided to A 1.5 percent monthly service charge is payable on all overdue balances.
Client by Designer as described and otherwise further defined in Payments will be credited first to late payment charges and next to the
the Proposal. unpaid balance. Client shall be responsible for all collection or legal fees
necessitated by late or default in payment. Designer reserves the right to
1.11 Third Party Materials means proprietary third party materials which withhold delivery and any transfer of ownership of any current work if
are incorporated into the Final Deliverables, including without limitation accounts are not current or overdue invoices are not paid in full. All grants
stock photography or illustration. of any license to use or transfer of ownership of any intellectual property
1.12 Trademarks means trade names, words, symbols, designs, logos or rights under this Agreement are conditioned upon receipt of payment
other devices or designs used in the Final Deliverables to designate the in full which shall be inclusive of any and all outstanding Additional Costs,
origin or source of the goods or services of Client. Taxes, Expenses and Fees, Charges or the costs of Changes.

2. PROPOSAL 4. CHANGES

The terms of the Proposal shall be effective for _______ days after 4.1 General Changes. Unless otherwise provided in the Proposal, and
presentation to Client. In the event this Agreement is not executed by except as otherwise provided for herein, Client shall pay additional
Client within the time identified, the Proposal, together with any related charges for changes requested by Client which are outside the scope of the
terms and conditions and deliverables, may be subject to amendment, Services on a time and materials basis, at Designer’s standard hourly rate
change or substitution. of _______ per hour. Such charges shall be in addition to all other amounts
payable under the Proposal, despite any maximum budget, contract price
3. FEES AND CHARGES or final price identified therein. Designer may extend or modify any
delivery schedule or deadlines in the Proposal and Deliverables as may be
3.1 Fees. In consideration of the Services to be performed by Designer, required by such Changes.
Client shall pay to Designer fees in the amounts and according to the 4.2 Substantive Changes. If Client requests or instructs Changes that
payment schedule set forth in the Proposal, and all applicable sales, use amount to a revision in or near excess of ____ percent (____%) of the time
or value added taxes, even if calculated or assessed subsequent to the required to produce the Deliverables, and or the value or scope of
payment schedule. the Services, Designer shall be entitled to submit a new and separate
3.2 Expenses. Client shall pay Designer’s expenses incurred in Proposal to Client for written approval. Work shall not begin on the
connection with this Agreement as follows: (a) incidental and out-of- revised services until a fully signed revised Proposal and, if required,
pocket expenses including but not limited to costs for telephone calls, any additional retainer fees are received by Designer.
postage, shipping, overnight courier, service bureaus, typesetting, 4.3 Timing. Designer will prioritize performance of the Services as
blueprints, models, presentation materials, photocopies, computer may be necessary or as identified in the Proposal, and will undertake
expenses, parking fees and tolls, and taxis at cost plus Designer’s standard commercially reasonable efforts to perform the Services within the
markup of ___________ percent (___%), and, if applicable, a mileage time(s) identified in the Proposal. Client agrees to review Deliverables
reimbursement at _____ per mile; and (b) travel expenses including

126 127
within the time identified for such reviews and to promptly either, 6. ACCREDITATION/PROMOTIONS
(i) approve the Deliverables in writing or (ii) provide written comments
and/or corrections sufficient to identify the Client’s concerns, objections All displays or publications of the Deliverables shall bear accreditation
or corrections to Designer. The Designer shall be entitled to request and/or copyright notice in Designer’s name in the form, size and location
written clarification of any concern, objection or correction. Client as incorporated by Designer in the Deliverables, or as otherwise directed
acknowledges and agrees that Designer’s ability to meet any and all by Designer. Designer retains the right to reproduce, publish and
schedules is entirely dependent upon Client’s prompt performance display the Deliverables in Designer’s portfolios and websites, and in
of its obligations to provide materials and written approvals and/or galleries, design periodicals and other media or exhibits for the purposes
instructions pursuant to the Proposal and that any delays in Client’s of recognition of creative excellence or professional advancement, and
performance or Changes in the Services or Deliverables requested by to be credited with authorship of the Deliverables in connection with
Client may delay delivery of the Deliverables. Any such delay caused by such uses. Either party, subject to the other’s reasonable approval, may
Client shall not constitute a breach of any term, condition or Designer’s describe its role in relation to the Project and, if applicable, the services
obligations under this Agreement. provided to the other party on its website and in other promotional
4.4 Testing and Acceptance. Designer will exercise commercially materials, and, if not expressly objected to, include a link to the other
reasonable efforts to test Deliverables requiring testing and to make all party’s website.
necessary corrections prior to providing Deliverables to Client. Client,
7. CONFIDENTIAL INFORMATION
within five (5) business days of receipt of each Deliverable, shall notify
Designer, in writing, of any failure of such Deliverable to comply with Each party acknowledges that in connection with this Agreement it may
the specifications set forth in the Proposal, or of any other objections, receive certain confidential or proprietary technical and business
corrections, changes or amendments Client wishes made to such information and materials of the other party, including without limitation
Deliverable. Any such written notice shall be sufficient to identify with Preliminary Works (“Confidential Information”). Each party, its agents
clarity any objection, correction or change or amendment, and Designer and employees shall hold and maintain in strict confidence all Confidential
will undertake to make the same in a commercially timely manner. Any Information, shall not disclose Confidential Information to any third party,
and all objections, corrections, changes or amendments shall be subject and shall not use any Confidential Information except as may be necessary
to the terms and conditions of this Agreement. In the absence of such to perform its obligations under the Proposal except as may be required
notice from Client, the Deliverable shall be deemed accepted. by a court or governmental authority. Notwithstanding the foregoing,
Confidential Information shall not include any information that is in the
5. CLIENT RESPONSIBILITIES public domain or becomes publicly known through no fault of the receiving
party, or is otherwise properly received from a third party without an
Client acknowledges that it shall be responsible for performing the obligation of confidentiality.
following in a reasonable and timely manner:
(a) coordination of any decision-making with parties other than 8. RELATIONSHIP OF THE PARTIES
the Designer;
(b) provision of Client Content in a form suitable for reproduction or 8.1 Independent Contractor. Designer is an independent contractor, not
incorporation into the Deliverables without further preparation, unless an employee of Client or any company affiliated with Client. Designer
otherwise expressly provided in the Proposal; and shall provide the Services under the general direction of Client, but
(c) final proofreading and in the event that Client has approved Designer shall determine, in Designer’s sole discretion, the manner and
Deliverables but errors, such as, by way of example, not limitation, means by which the Services are accomplished. This Agreement does
typographic errors or misspellings, remain in the finished product, not create a partnership or joint venture and neither party is authorized
Client shall incur the cost of correcting such errors. to act as agent or bind the other party except as expressly stated in this
Agreement. Designer and the work product or Deliverables prepared
by Designer shall not be deemed a work for hire as that term is defined
under Copyright Law. All rights, if any, granted to Client are contractual
in nature and are wholly defined by the express written agreement of the
parties and the various terms and conditions of this Agreement.

128 129
8.2 Designer Agents. Designer shall be permitted to engage and/or 9.2 By Designer
use third party designers or other service providers as independent (a) Designer hereby represents, warrants and covenants to Client that
contractors in connection with the Services (“Design Agents”). Designer will provide the Services identified in the Agreement in
Notwithstanding, Designer shall remain fully responsible for such a professional and workmanlike manner and in accordance with all
Design Agents’ compliance with the various terms and conditions of reasonable professional standards for such services.
this Agreement. (b) Designer further represents, warrants and covenants to Client
8.3 No Solicitation. During the term of this Agreement, and for a period that (i) except for Third Party Materials and Client Content, the Final
of six (6) months after expiration or termination of this Agreement, Deliverables shall be the original work of Designer and/or its independent
Client agrees not to solicit, recruit, engage or otherwise employ or contractors, (ii) in the event that the Final Deliverables include the work
retain, on a full-time, part-time, consulting, work-for-hire or any other of independent contractors commissioned for the Project by Designer,
kind of basis, any Designer, employee or Design Agent of Designer, Designer shall have secure agreements from such contractors granting
whether or not said person has been assigned to perform tasks under this all necessary rights, title, and interest in and to the Final Deliverables
Agreement. In the event such employment, consultation or work-for-hire sufficient for Designer to grant the intellectual property rights provided
event occurs, Client agrees that Designer shall be entitled to an agency in this Agreement, and (iii) to the best of Designer’s knowledge, the Final
commission to be the greater of, either (a) 25 percent of said person’s Art provided by Designer and Designer’s subcontractors does not infringe
starting salary with Client, or (b) 25 percent of fees paid to said person if the rights of any party, and use of same in connection with the Project
engaged by Client as an independent contractor. In the event of (a) above, will not violate the rights of any third parties. In the event Client or third
payment of the commission will be due within 30 days of the employment parties modify or otherwise use the Deliverables outside of the scope
starting date. In the event of (b) above, payment will be due at the end of or for any purpose not identified in the Proposal or this Agreement or
any month during which the independent contractor performed services contrary to the terms and conditions noted herein, all representations and
for Client. Designer, in the event of nonpayment and in connection with warranties of Designer shall be void.
this section, shall be entitled to seek all remedies under law and equity. (c) EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN
THIS AGREEMENT, DESIGNER MAKES NO WARRANTIES WHATSOEVER. DESIGNER
8.4 No Exclusivity. The parties expressly acknowledge that this EXPLICITLY DISCLAIMS ANY OTHER WARRANTIES OF ANY KIND, EITHER EXPRESS
Agreement does not create an exclusive relationship between the parties. OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY
Client is free to engage others to perform services of the same or similar OR FITNESS FOR A PARTICULAR PURPOSE OR COMPLIANCE WITH LAWS OR
nature to those provided by Designer, and Designer shall be entitled GOVERNMENT RULES OR REGULATIONS APPLICABLE TO THE PROJECT.
to offer and provide design services to others, solicit other clients and
otherwise advertise the services offered by Designer. 10. INDEMNIFICATION/LIABILITY

9. WARRANTIES AND REPRESENTATIONS 10.1 By Client. Client agrees to indemnify, save and hold harmless
Designer from any and all damages, liabilities, costs, losses or expenses
9.1 By Client. Client represents, warrants and covenants to Designer arising out of any claim, demand, or action by a third party arising out of
that (a) Client owns all right, title, and interest in, or otherwise has full any breach of Client’s responsibilities or obligations, representations or
right and authority to permit the use of the Client Content, (b) to the best warranties under this Agreement. Under such circumstances Designer
of Client’s knowledge, the Client Content does not infringe the rights of shall promptly notify Client in writing of any claim or suit; (a) Client has
any third party, and use of the Client Content as well as any Trademarks in sole control of the defense and all related settlement negotiations; and
connection with the Project does not and will not violate the rights of any (b) Designer provides Client with commercially reasonable assistance,
third parties, (c) Client shall comply with the terms and conditions of information and authority necessary to perform Client’s obligations under
any licensing agreements which govern the use of Third Party Materials, this section. Client will reimburse the reasonable out-of-pocket expenses
and (d) Client shall comply with all laws and regulations as they relate to incurred by Designer in providing such assistance.
the Services and Deliverables.
10.2 By Designer. Subject to the terms, conditions, express
representations and warranties provided in this Agreement, Designer
agrees to indemnify, save and hold harmless Client from any and all
damages, liabilities, costs, losses or expenses arising out of any finding of
130 131
fact which is inconsistent with Designer’s representations and warranties 11.4 In the event of termination by Client and upon full payment of
made herein, except in the event any such claims, damages, liabilities, costs, compensation as provided herein, Designer grants to Client such right
losses or expenses arise directly as a result of gross negligence or misconduct and title as provided for in Schedule A of this Agreement with respect to
of Client provided that (a) Client promptly notifies Designer in writing of those Deliverables provided to, and accepted by Client as of the date
the claim; (b) Designer shall have sole control of the defense and all related of termination.
settlement negotiations; and (c) Client shall provide Designer with the 11.5 Upon expiration or termination of this Agreement: (a) each party
assistance, information and authority necessary to perform Designer’s shall return or, at the disclosing party’s request, destroy the Confidential
obligations under this section. Notwithstanding the foregoing, Designer Information of the other party, and (b) other than as provided herein, all
shall have no obligation to defend or otherwise indemnify Client for any rights and obligations of each party under this Agreement, exclusive of the
claim or adverse finding of fact arising out of or due to Client Content, any Services, shall survive.
unauthorized content, improper or illegal use, or the failure to update or
maintain any Deliverables provided by Designer. 12. GENERAL
10.3 Limitation of Liability. THE SERVICES AND THE WORK PRODUCT OF
DESIGNER ARE SOLD “AS IS.” IN ALL CIRCUMSTANCES, THE MAXIMUM LIABILITY 12.1 Modification/Waiver. This Agreement may be modified by the
OF DESIGNER, ITS DIRECTORS, OFFICERS, EMPLOYEES, DESIGN AGENTS AND parties. Any modification of this Agreement must be in writing, except
AFFILIATES (“DESIGNER PARTIES”), TO CLIENT FOR DAMAGES FOR ANY AND ALL that Designer’s invoices may include, and Client shall pay, expenses or
CAUSES WHATSOEVER, AND CLIENT’S MAXIMUM REMEDY, REGARDLESS OF THE costs that Client authorizes by electronic mail in cases of extreme time
FORM OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL BE
sensitivity. Failure by either party to enforce any right or seek to remedy
LIMITED TO THE NET PROFIT OF DESIGNER. IN NO EVENT SHALL DESIGNER BE
any breach under this Agreement shall not be construed as a waiver of
LIABLE FOR ANY LOST DATA OR CONTENT, LOST PROFITS, BUSINESS INTERRUPTION
OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR
such rights nor shall a waiver by either party of default in one or more
PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO THE MATERIALS OR THE instances be construed as constituting a continuing waiver or as a waiver
SERVICES PROVIDED BY DESIGNER, EVEN IF DESIGNER HAS BEEN ADVISED OF of any other breach.
THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING THE FAILURE OF 12.2 Notices. All notices to be given hereunder shall be transmitted in
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
writing either by facsimile or electronic mail with return confirmation
of receipt or by certified or registered mail, return receipt requested,
11. TERM AND TERMINATION
and shall be sent to the addresses identified below, unless notification
of change of address is given in writing. Notice shall be effective upon
11.1 This Agreement shall commence upon the Effective Date and shall receipt or in the case of fax or email, upon confirmation of receipt.
remain effective until the Services are completed and delivered.
12.3 No Assignment. Neither party may assign, whether in writing or
11.2 This Agreement may be terminated at any time by either party
orally, or encumber its rights or obligations under this Agreement or
effective immediately upon notice, or the mutual agreement of the
permit the same to be transferred, assigned or encumbered by operation
parties, or if any party:
of law or otherwise, without the prior written consent of the other party.
(a) becomes insolvent, files a petition in bankruptcy, makes an assignment
for the benefit of its creditors; or 12.4 Force Majeure. Designer shall not be deemed in breach of this
(b) breaches any of its material responsibilities or obligations under Agreement if Designer is unable to complete the Services or any portion
this Agreement, which breach is not remedied within ten (10) days from thereof by reason of fire, earthquake, labor dispute, act of God or public
receipt of written notice of such breach. enemy, death, illness or incapacity of Designer or any local, state, federal,
national or international law, governmental order or regulation or any
11.3 In the event of termination, Designer shall be compensated for the
other event beyond Designer’s control (collectively, “Force Majeure
Services performed through the date of termination in the amount of (a)
Event”). Upon occurrence of any Force Majeure Event, Designer shall give
any advance payment, (b) a prorated portion of the fees due, or (c) hourly
notice to Client of its inability to perform or of delay in completing the
fees for work performed by Designer or Designer’s agents as of the date of
Services and shall propose revisions to the schedule for completion
termination, whichever is greater; and Client shall pay all Expenses, fees,
of the Services.
out of pockets together with any Additional Costs incurred through and up
to, the date of cancellation.
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12.5 Governing Law and Dispute Resolution. The formation, construction, ____ ____ Supplement 1: Print-specific Terms and Conditions
performance and enforcement of this Agreement shall be in accordance
____ ____ Supplement 2: Interactive-specific Terms and Conditions
with the laws of the United States and the state of _____________________
without regard to its conflict of law provisions or the conflict of law ____ ____ Supplement 3: Environmental-specific Terms and Conditions
provisions of any other jurisdiction. In the event of a dispute arising out
of this Agreement, the parties agree to attempt to resolve any dispute by By their execution below, the parties hereto have agreed to all of the terms
negotiation between the parties. If they are unable to resolve the dispute, and conditions of this Agreement effective as of the last date of signature
either party may commence mediation and/or binding arbitration below, and each signatory represents that it has the full authority to enter
through the American Arbitration Association, or other forum mutually into this Agreement and to bind her/his respective party to all of the terms
agreed to by the parties. The prevailing party in any dispute resolved by and conditions herein.
binding arbitration or litigation shall be entitled to recover its attorneys’
fees and costs. In all other circumstances, the parties specifically consent DESIGNER: CLIENT:
to the local, state and federal courts located in the state of _____________
________. The parties hereby waive any jurisdictional or venue defenses [Designer name] [Client name]
available to them and further consent to service of process by mail. Client [Address] [Address]
acknowledges that Designer will have no adequate remedy at law in the
event Client uses the deliverables in any way not permitted hereunder, Signed: ___________________________ Signed: __________________________
and hereby agrees that Designer shall be entitled to equitable relief by way By: [Client officer name]
of temporary and permanent injunction, and such other and further relief Date: ______________________________
at law or equity as any arbitrator or court of competent jurisdiction may Title: _____________________________
deem just and proper, in addition to any and all other remedies provided
for herein. Date: _____________________________
12.6 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held invalid or
unenforceable, the remainder of this Agreement shall nevertheless
remain in full force and effect and the invalid or unenforceable provision
shall be replaced by a valid or enforceable provision.
12.7 Headings. The numbering and captions of the various sections are
solely for convenience and reference only and shall not affect the scope,
meaning, intent or interpretation of the provisions of this Agreement nor
shall such headings otherwise be given any legal effect.
12.8 Integration. This Agreement comprises the entire understanding of
the parties hereto on the subject matter herein contained, and supersedes
and merges all prior and contemporaneous agreements, understandings
and discussions between the parties relating to the subject matter of this
Agreement. In the event of a conflict between the Proposal and any other
Agreement documents, the terms of the Proposal shall control. This
Agreement comprises this Basic Terms and Conditions document, the
Proposal, Schedule A, and the following documents as indicated by the
parties’ initials:

134 135
Schedule A:
Intellectual Property Provisions

IP 1. RIGHTS TO DELIVERABLES OTHER THAN FINAL ART

IP 1.1 Client Content. Client Content, including all pre-existing


Trademarks, shall remain the sole property of Client or its
respective suppliers, and Client or its suppliers shall be the
sole owner of all rights in connection therewith. Client hereby
grants to Designer a nonexclusive, nontransferable license to
use, reproduce, modify, display and publish the Client Content
solely in connection with Designer’s performance of the Services
and limited promotional uses of the Deliverables as authorized
in this Agreement.
IP 1.2 Third Party Materials. All Third Party Materials are the exclusive
property of their respective owners. Designer shall inform Client
of all Third Party Materials that may be required to perform
the Services or otherwise integrated into the Final Art. Under
such circumstances Designer shall inform Client of any need to
license, at Client’s expense, and unless otherwise provided for by
Client, Designer shall obtain the license(s) necessary to permit
Client’s use of the Third Party Materials consistent with the usage
rights granted herein. In the event Client fails to properly secure
or otherwise arrange for any necessary licenses or instructs the
use of third party art, Client hereby indemnifies, saves and holds
harmless Designer from any and all damages, liabilities, costs,
losses or expenses arising out of any claim, demand, or action
by a third party arising out of Client’s failure to obtain copyright,
trademark, publicity, privacy, defamation or other releases or
permissions with respect to materials included in the Final Art.

136 137
IP 1.3 Preliminary Works. Designer retains all rights in and to all IP 2. RIGHTS TO FINAL ART
Preliminary Works. Client shall return all Preliminary Works
to Designer within thirty (30) days of completion of the Services Final Art ownership options: choose A-License (either limited usage,
and all rights in and to any Preliminary Works shall remain the exclusive license with no modification rights, or exclusive license with
exclusive property of Designer. modification rights—all licenses include liquidation for unlicensed use)
IP 1.4 Original Artwork. Designer retains all right and title in and to or B-Assignment. Check appropriate media for each provision:
any original artwork comprising Final Art, including all rights
to display or sell such artwork. Client shall return all original IP 2.A (1) (a) License for limited usage, no modification rights:
artwork to Designer within thirty (30) days of completion of IP 2.1 For ____ print, ____ online/interactive, ____ three-dimensional media:
the Services. Upon completion of the Services, and expressly subject to full
payment of all fees, costs and out-of-pocket expenses due,
IP 1.5 Trademarks. Upon completion of the Services and expressly Designer grants to Client the rights in the Final Art as set forth
conditioned upon full payment of all fees, costs and out-of- below. Any additional uses not identified herein require an
pocket expenses due, Designer assigns to Client all ownership additional license and may require an additional fee. All other
rights, including any copyrights, in and to any artworks or designs rights are expressly reserved by Designer. The rights granted to
comprising the works created by Designer for use by Client as a Client are for the usage of the Final Art in its original form only.
Trademark. Designer shall cooperate with Client and shall execute Client may not crop, distort, manipulate, reconfigure, mimic,
any additional documents reasonably requested by Client to animate, create derivative works or extract portions or in any
evidence such assignment. Client shall have sole responsibility other manner, alter the Final Art.
for ensuring that any proposed trademarks or Final Deliverables Category of use: ________________________________________________
intended to be a Trademark are available for use in commerce and Medium of use: _________________________________________________
federal registration and do not otherwise infringe the rights of any Duration of use: ________________________________________________
third party. Client hereby indemnifies, saves and holds harmless Geographic territory: __________________________________________
Designer from any and all damages, liabilities, costs, losses or Initial press run: _______________________________________________
expenses arising out of any claim, demand, or action by any third With respect to such usage, Client shall have (check one)
party alleging any infringement arising out of Client’s use and/or ___ Exclusive / ___ Nonexclusive rights
failure to obtain rights to use or use of the Trademark.
OR
IP 1.6 Designer Tools. All Designer Tools are and shall remain the
exclusive property of Designer. Designer hereby grants to IP 2.A (1)(b) Exclusive license, no modification rights:
Client a nonexclusive, nontransferable (other than the right to IP 2.2 For ____ print, ____ online/interactive, ____ three-dimensional media:
sublicense such uses to Client’s web hosting or internet service Designer hereby grants to Client the exclusive, perpetual and
providers), perpetual, worldwide license to use the Designer worldwide right and license to use, reproduce and display the
Tools solely to the extent necessary with the Final Deliverables Final Art solely in connection with the Project as defined in the
for the Project. Client may not directly or indirectly, in any Proposal and in accordance with the various terms and conditions
form or manner, decompile, reverse engineer, create derivative of this Agreement. The rights granted to Client are for usage of
works or otherwise disassemble or modify any Designer Tools the Final Art in its original form only. Client may not crop, distort,
comprising any software or technology of Designer. manipulate, reconfigure, mimic, animate, create derivative works
or extract portions or in any other manner, alter the Final Art.

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OR

IP 2.A (1) (c) Exclusive license, with modification rights:


IP 2.3 For ____ print, ____ online/interactive, ____ three-dimensional media:
Designer hereby grants to Client the exclusive, perpetual and
worldwide right and license to use, reproduce, adapt, modify
and display the Final Art solely in connection with the Project
as defined in the Proposal and in accordance with the terms and
conditions of this Agreement.
Supplement 1:
AND
Print-specific Terms and Conditions
IP 2.A (2) Liquidation for unlicensed use:
IP 2.4 Client’s use of the Final Art shall be limited to the usage rights
granted herein for the Project only. Use of the Final Art,
Deliverables or any derivative works thereof by Client at any P 1. Samples. Client shall provide Designer with _____ (number)
other time or location, or for another project or outside the of samples of each printed or published form of the Final
scope of the rights granted herein require an additional fee and Deliverables, for use in Designer’s portfolio and other self-
Designer shall be entitled to further compensation equal to _____ promotional uses. Such samples shall be representative of
_______ percent (____%) of the original Project fee unless otherwise the highest quality of the work produced.
agreed in writing by both parties. In the event of non-payment, P 2. Finished Work. The printed work, and the arrangement or
Designer shall be entitled to pursue all remedies under law brokering of the print services by Designer, shall be deemed
and equity. in compliance with this Agreement if the final printed product
OR is within the acceptable variations as to kind, quantity, and price
in accordance with current or standard trade practices identified
IP 2.B Assignment: by the supplier of the print and print-related services. Whenever
IP 2.5 Upon completion of the Services, and expressly subject to full commercially reasonable and if available, Designer shall provide
payment of all fees, costs and out-of-pocket expenses due, copies of the current or standard trade practices to Client.
Designer hereby assigns to Client all right and title in and to the Notwithstanding, Designer shall have no responsibility or
Final Art. Designer agrees to reasonably cooperate with Client obligation to negotiate changes or amendments to the current
and shall execute any additional documents reasonably required or standard trade practices.
to evidence such assignment.

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Supplement 2:
Interactive-specific
Terms and Conditions

I 1. SUPPORT SERVICES

I 1.1 Warranty Period. “Support Services” means commercially


reasonable technical support and assistance to maintain and
update the Deliverables, including correcting any errors
or Deficiencies, but shall not include the development of
enhancements to the Project or other services outside the scope
of the Proposal. During the first _________ (insert number) months
following expiration of this Agreement (“Warranty Period”), if
any, Designer shall provide up to _______ (insert number) hours
of Support Services at no additional cost to Client. Additional time
shall be billed at Designer’s regular hourly rate, then in effect
upon the date of the request for additional support.
I 1.2 Maintenance Period. Upon expiration of the Warranty Period and
at Client’s option, Designer will provide Support Services for the
following __________ (insert number) months (the “Maintenance
Period”) for a monthly fee of $________ [or Designer’s hourly fees
of $_____ per hour]. The parties may extend the Maintenance
Period beyond one year upon mutual written agreement.

I 2. ENHANCEMENTS

During the Maintenance Period, Client may request that Designer


develop enhancements to the Deliverables, and Designer shall
exercise commercially reasonable efforts to prioritize Designer’s
resources to create such enhancements. The parties understand
that preexisting obligations to third parties existing on the date of
the request for enhancements may delay the immediate execution
of any such requested enhancements. Such enhancements shall
be provided on a time and materials basis at Designer’s then in
effect price for such services.

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I 3. ADDITIONAL WARRANTIES AND REPRESENTATIONS

I 3.1 Deficiencies. Subject to the representations and warranties of


Client in connection with Client Content, Designer represents and
warrants that the Final Deliverables will be free from Deficiencies.
For the purposes of this Agreement, “Deficiency” shall mean a
failure to comply with the specifications set forth in the Proposal
in any material respect, but shall not include any problems caused Supplement 3:
by Client Content, modifications, alterations or changes made to
Final Deliverables by Client or any third party after delivery by
Environmental-specific
Designer, or the interaction of Final Deliverables with third party Terms and Conditions
applications such as Web browsers other than those specified in
the Proposal. The parties acknowledge that Client’s sole remedy
and Designer’s sole liability for a breach of this Section is the 3D 1. PHOTOGRAPHS OF THE PROJECT
obligation of Designer to correct any Deficiency identified within
the Warranty Period. In the event that a Deficiency is caused Designer shall have the right to document, photograph or
by Third Party Materials provided or specified by Designer, otherwise record all completed designs or installations of
Designers sole obligation shall be to substitute alternative Third the Project, and to reproduce, publish and display such
Party Materials. documentation, photographs or records for Designer’s
promotional purposes in accordance with Section 6 of the
I 3.2 Designer Tools. Subject to the representations and warranties of Basic Terms and Conditions of this Agreement.
the Client in connection with the materials supplied by Client,
Designer represents and warrants that, to the best of Designer’s 3D 2. ADDITIONAL CLIENT RESPONSIBILITIES
knowledge, the Designer Tools do not knowingly infringe the rights
of any third party, and use of same in connection with the Project Client acknowledges that Client shall be responsible for
will not knowingly violate the rights of any third parties except to performing the following in a reasonable and timely manner:
the extent that such violations are caused by Client Content, or the (a) Communication of administrative or operational decisions
modification of, or use of the Deliverables in combination with if they affect the design or production of Deliverables, and
materials or equipment outside the scope of the applicable coordination of required public approvals and meetings;
specifications, by Client or third parties. (b) Provision of accurate and complete information and
materials requested by Designer such as, by way of example,
I 4. COMPLIANCE WITH LAWS not limitation, site plans, building plans and elevations,
utility locations, color/material samples and all applicable
Designer shall use commercially reasonable efforts to ensure that codes, rules and regulation information;
all Final Deliverables shall be designed to comply with the known (c) Provision of approved naming, nomenclature; securing approvals
relevant rules and regulations. Client, upon acceptance of the and correct copy from third parties such as, by way of example, not
Deliverables, shall be responsible for conformance with all laws limitation, end users or donors as may be necessary;
relating to the transfer of software and technology. (d) Final proofreading and written approval of all project
documents including, by way of example, not limitation, artwork,
message schedules, sign location plans and design drawings
before their release for fabrication or installation. In the event
that Client has approved work containing errors or omissions,
such as, by way of example, not limitation, typographic errors or
misspellings, Client shall incur the cost of correcting such errors;

144 145
(e) Arranging for the documentation, permissions, licensing compliance of the Final Deliverables with any such rule, codes
and implementation of all electrical, structural or mechanical or regulations shall be the responsibility of Client. Designer
elements needed to support, house or power signage; coordination shall use commercially reasonable efforts to ensure the suitability
of sign manufacture and installation with other trades; and and conformance of the Final Deliverables.
(f) Bid solicitation and contract negotiation; sourcing,
establishment of final pricing and contract terms directly 3D 6. CLIENT INSURANCE
with fabricators or vendors.
Client shall maintain, during the term of this Agreement, at its
3D 3. ENGINEERING sole expense, construction and maintenance liability, product
liability, general business liability and advertising injury
The Services shall include the selection and specifications for insurance from a recognized insurance carrier in the amount of
materials and construction details as described in the Proposal. at least _______ million dollars ($__,000,000.00) per occurrence.
However, Client acknowledges and agrees that Designer is not Such insurance shall name Designer individually as an additional
(if correct) a licensed engineer or architect, and that responsi- named insured. Client shall provide a copy of said insurance
bility for the interpretation of design drawings and the design policy to Designer at Designer’s request.
and engineering of all work performed under this Agreement
(“Engineering”) is the sole responsibility of Client and/or its
architect, engineer or fabricator.

3D 4. IMPLEMENTATION

Client expressly acknowledges and agrees that the estimates


provided in the Proposal, at any time during the project for
implementation charges such as, including, but not limited to,
fabrication or installation are for planning purposes only.
Such estimates represent the best judgment of Designer or
its consultants at the time of the Proposal, but shall not be
considered a representation or guarantee that project bids or
costs will not vary. Client shall contract and pay those parties
directly responsible for implementation services such as
fabrication or installation (“Implementation”). Designer shall
not be responsible for the quality or timeliness of the third-party
Implementation services, irrespective of whether Designer
assists or advises Client in evaluating, selecting or monitoring
the provider of such services.

3D 5. COMPLIANCE WITH LAWS

Designer shall use commercially reasonable efforts to ensure


that all Final Deliverables shall be designed to comply with the
applicable rules and regulations such as the Americans with
Disabilities Act (“ADA”). However, Designer is not an expert
and makes no representations or warranties in connection
with compliance with such rules, codes or regulations. The

146 147
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AIGA, the professional association for design, is the oldest


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AIGA’s mission is to advance designing as a professional craft, VERSION A AIGA/Adobe official sponsor logo 7.15.03 1:30 p.m. ww

strategic tool and vital cultural force.

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148 149
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