Not long ago I received a call from an artist who creates images for a famous greeting card company, and who was seeking representation for her work as she wanted to get her artwork into more places than just greeting cards.
But the problem was, she didn't really have any artwork to license.
It had all been sold to the greeting card company, who had paid her a flat fee for each piece and now owned it totally.
That's what we call a "buyout".
This term is often used to mean that a company pays a flat fee for complete use of a piece of art.
That's well and good if you're happy with a few hundred dollars for your work but it can get you into trouble down the road if you ever want to use that artwork again.
You see, when a company has you sign an agreement which gives them all reproduction rights, now and in the future, to one of your works of art, that means that they - not you - own the art.
Since they own your art (excuse me, their art), they can use it for anything they want, resell it to another company, or license it to other companies for other uses for the next hundred years and you legally have absolutely no say in the matter.
And of course you'll never make another cent from its use.
That's what companies generally mean when they say that they "buy all rights.
" Now, that's fine if you don't really care what happens with your art and you're happy with a flat fee payment.
Buyouts can work well for illustrators who do book and magazine covers or interiors, or advertising images, and who know full well that they'll never be able to use the art again.
They generally know what they're getting into.
The problem comes about when an artist doesn't know what he or she is getting into, and the artist who called me the other day had been successful in her own way - with one company - but essentially had no real portfolio of art that was available for licensing anywhere else.
Many years of work, and she owned none of it.
This artist's mistake was in agreeing to a buyout when she wasn't prepared to assume the consequences of selling all rights to her art.
A major mistake, and she now regrets that she didn't understand that the card company might have been willing just to license the exclusive right to use the images on cards - if she had asked - leaving the artwork free for other uses.
But it's too late now.
I always advise artists to read every line of a contract, every sentence and every single word.
If there's a word or a phrase that you don't understand, don't sign the contract until what you don't understand is explained to you, to your satisfaction.
And be sure not to assume anything - the contract is the total agreement between you and the company or agency.
If something important isn't in the contract, speak with them about adding it.
If you don't agree with something, don't be shy about bringing up your concern in a pleasant, polite way.
Your first overall written license or contract with a manufacturer or agency is the foundation of your relationship with them.
If you make certain that the contract makes sense in every way, then you'll have a solid foundation to grow your relationship with your new licensee.