Creator licensing income

Creator licensing income is payment for permission to use work you control, without transferring copyright ownership. Before quoting, establish what the buyer wants to use, where and for how long. Check which rights you can grant and what the proposed licence would prevent you from doing with the work.

Check what you can license

Identify the photograph, illustration, article, recording or other material. Read the agreement under which it was made and any later licences.

Employment, some commissions and written transfers can affect ownership. Being credited as the creator or holding the file does not establish that you own every relevant right. Check any material contributed by someone else too.

A licence permits specified use; an assignment transfers copyright ownership. If a buyer says it wants to ‘own the work’, clarify what that means before quoting.

Ownership can depend on how the work was made. Sprintlaw’s Australian overview says an employer often owns copyright in employee work, though not always, while contractors and freelancers generally own their work unless copyright is assigned. Check the actual arrangement rather than assuming the commissioning party or creator owns it.

Check that the material you are offering is copyright-protected work, rather than an idea, concept, business method, name, title, slogan, fact or common information. Sprintlaw identifies these as things copyright does not protect; separate material or rights may need checking before you promise permission to use a complete piece.

Key Facts About Copyright in Australia

Define the proposed use

Ask which version of the work is needed, how and by whom it will be used, the channels and products involved, expected reach, territory and dates. Ask whether an agency or distributor needs permission and whether the buyer wants to alter the work. Use in one Australian report calls for a different scope from use on packaging sold in several countries.

Decide whether the licence is non-exclusive or exclusive. A non-exclusive licence can leave you free to use the work and license it to others. An exclusive licence can restrict your own use of the rights it covers. Specify those rights and any portfolio use you need to retain.

How to Define a Buyer’s Permitted Use

Choose a licence structure

IP Australia distinguishes a sole licence from an exclusive one. A sole licence gives one person or business permission to use the work while allowing you to commercialise some aspects; an exclusive licence excludes you and others from using the covered rights to make a profit.

An exclusive licence can be limited to a particular geographical area, field of application or class of product. Those boundaries can leave you able to grant other licences for different areas or uses, or commercialise aspects yourself. Make sure any limitation is explicit in the agreement.

Exclusive vs Non-Exclusive Licences: Key Differences

Separate production from permission

A production fee covers making or delivering work. A licence fee covers the agreed permission to use it. Both may appear on one invoice, but the agreement should make clear which uses the payment covers. First check whether an earlier payment already secured the proposed use.

There is no universal licensing rate. Consider the use, reach, term, exclusivity and opportunities you would give up. A fixed fee may suit a bounded use. A royalty needs an agreed calculation, reporting method and payment schedule; a possible royalty is not income already earned.

Record and manage the agreement

Identify the parties and exact work in a dated record. Set out the permitted use, term, territory, licence type, payment, attribution and any approval requirements. Agree what happens to published material when the term ends and how an extension will be arranged.

Keep the agreed terms with the asset and invoice. Compare requests for another channel or longer term with that record before quoting. If you see use that may exceed the agreement, preserve what you observed and check the full permission history before alleging a breach.

IP Australia also advises that a licence should specify whether the licensor or licensee is responsible for any renewal costs. Consider this where the licensed IP has renewal costs.

Steps to Secure Creator Licensing Income

Control transfers to another user

A licence can address whether the buyer may assign its permission to another person or business. This is different from assigning copyright ownership: the licence assignment transfers the licensed rights from the licensee to someone else.

IP Australia says a licence will typically require the licensee to obtain your prior written consent before assigning it, with consent not to be unreasonably withheld. Decide whether that condition suits the deal and record the agreed rule in the contract.