Recently in royalties Category

February 24, 2010

Protecting Equestrian Graphics

InternationaVelvet2.jpgDear Rich: I am equestrian artist that will be adding a t-shirt line to my portfolio. My graphic designer has created my horseshoe graphic, which I own and I have created one line phrases for each shirt. I will also be using these graphics on other items such as bags, mugs etc. I have a few questions as this is all new territory for me. (1) I am currently working with a woman who can embroider, applique and silk screen them for me. How can I prevent her from selling my line herself on her own web site? (2) I will be in contact with a company that will make the shirts and then also bring them to trade shows in our industry. Having not talked to them yet, my guess is they pay you an amount for every shirt sold since they are doing most of the marketing. (3) I don't understand the licensing process much and what are the benefits and how do I even do it? How can I prevent others from duplicating my work...most importantly the phrases I come up with as these are unique. Since the Dear Rich Staff is trying to increase readership and since we have a relative who is a devoted equestrian, it wouldn't be a good idea  to discuss how much we don't like all that horse stuff (especially the weird little English hats with the brim) and how we can't stand "horse movies." (And being lawyers we don't understand why there are no mandatory helmet laws except in Florida and New York and even then, that's only for kids under 16 -- what's up with that? And what about a helmet for the horse while we're at it.). 
Anyway, aside from our problems with over-sized four-legged animals, you had a question (or questions).  Okay, here goes: (1) Generally, if you own the copyright (or trademark) on the merchandise, you control who can reproduce it. So, the woman who works for you wouldn't have any rights to reproduce the horse art. If you're still concerned, you can prevent the worker from competing against you by having her sign a written agreement that states she can't sell your designs.  If your designs are not protectable under either copyright or trademark law (see below), that agreement may be hard to enforce. (2) We're not sure that #2, above, is a question so we can't help you with the company or explain how they do business. You should ask them about their terms and then compare them with competitors. We assume you're aware of online merchandising sources like Zazzle and Cafe Press. (3) A license is a form of permission -- in which you allow somebody to exploit property you own in return for a payment, usually in the form of a royalty. It can be a great way to do business because the company doing the licensing (the "licensee") will often police and protect your work as well. You can read more about it in this handy Nolo form kit on the subject. 
Short phrase thing. You will have a hard time stopping others from using your short phrases (by themselves) since they're not protected under copyright law. We've talked about this a few times in the past and we're paranoid about boring our readers with more on the subject.  You can always protect those phrases when used in association with a graphic -- that is you can stop others from copying the combination. You may be able to register each phrase as a trademark for use with T-shirts and similar merchandise. However, that's a little bit of a financial investment as each phrase will require a separate registration for each class of goods. Tally ho!
June 12, 2009

Sports Licensing: Is the System Rigged?

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Dear Rich: I have a great idea for a sports team related product and have started looking into a patent.  I looked into licensing and can't even believe that it's legal to put the restrictions on that these teams do. I don't want to cheat these universities and professional teams out of their money on these things but they make it impossible to make a new product, not similar to anything they are offering without going through one of their existing suppliers or having an exemplary record of mass producing products similar. WHAT HAPPENED TO THE LITTLE GUY? WHY CAN I ONLY SELL MY IDEA? WHY CAN'T I OBTAIN LICENSING THEN GET INVESTORS ONBOARD? THE SYSTEM IN LICENSED PRODUCTS STINKS AND SHOULD BE ILLEGAL. Ouch ... our ears are ringing.  We understand you're angry, but in the future, you may want to consider the intonation of your query before hitting the "send" button.  Okay, assuming your question is 'Why is it so hard to license products to a university or professional sports franchise?," the short answer is that as a general rule, the bigger the enterprise, the less that the enterprise wants to hear from outsiders, a principle sometimes referred to as "NIH." (As you probably know, sports licensing is a big enterprise .... so big that even reading about it can be expensive.)
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There is, however, a logic behind the closed-door approach of the sports licensing industry. Like the toy licensing business, sports licensing execs don't want to deal with strangers or companies that can't meet manufacturing numbers, accept legal requirements, or provide quality assurance. This is especially true in a depressed business climate when risk-aversion is the name of the game. (Although that doesn't stop sports-licensing of some crazy concepts -- check out the MLB-licensed "fan" coffins, above.) As you may be aware, the road you are seeking -- attempting to patent your invention, get investors and manufacture the product yourself (can you deal with foreign manufacturers?) -- is littered with unhappiness and bankruptcies. The Dear Rich staff advises that you reconsider the idea of pitching your invention (hopefully, patented) to an existing manufacturer or agent -- that is, a middle entity who already has cachet with the teams. That's the way many "little guys" get started in the sports licensing world -- by slowly building trust with existing companies. 
May 28, 2009

Start a Music Label (or Not)?

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Dear Rich: Our band is putting out its first CD and we are considering creating a record label to release it. What do you think? What's involved in creating a record label? Do we need a lawyer? I'm so glad you asked. You don't need a lawyer to form a record label and there's not that much involved in creating one, as I'll explain below. The bigger question is why are you doing it. One reason artists create labels is that they feel it gives some legitimacy to their release -- as if to say to the world, "see, somebody has signed us." If that's your prime motivator, don't bother. Your fans won't care and anyone in the music industry will be able to discern that you've just created a fictitious label for your release. However, if you're serious about building a small business around a series of releases (including other artists), then it might make sense to create a label. 
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Most importantly, and of greatest concern is money. Who will pay for the pressings and artwork? How will you finance promotion? Are you borrowing money to start up? Or are you seeking investments? Will you pay for recording costs? Can you afford to keep going when distributors are late paying you (or worse, go belly up)? All of these things are worth considering before you launch your music mini-empire. (Here's a quick lesson (PDF) on the flow of money in the music business!) If you're still eager to move forward, you'll need a name for your label and you'll want to make sure no other music or entertainment services are using a similar name. (In a future blog entry, we're going to explain how to perform basic trademark searches at the USPTO.) Next, if you're not familiar with basic business startup information, you might want to get a primer. That's because you may need to figure out your business form -- partnership, LLC, corporation -- and file a fictitious business name with your county clerk. You'll need to open a bank account and use an accounting system -- either an Excel Spreadsheet or Quickbooks should do. You may want to affiliate with an independent music distributor (here's a list by state) which may prove challenging, unless you have an artist that is already selling well. And you will need agreements for the distributor, for consignments, and for your artists (including your band). Digital copies of all these agreements are included in my book Music Law, and the Dear Rich staff reports that there other helpful resources for starting a label on the web. One of the more popular books on the subject is Start and Run Your Own Record Label.
May 27, 2009

Investigating Potential Music Royalty Ripoffs

Thumbnail image for OldGuitar.jpgDear Rich: My Dad is a musician who played on some records in the 1970s that  still get played on the radio. I'd like to help him investigate any money he is owed for these old recordings. How do I go about it? I'm so glad you asked. The short answer is that you may have to hire someone to help you with your investigation. According to the Dear Rich staff, determining whether your Dad is owed money depends on several factors. These include: (1) whether your Dad contributed to songwriting, in which case he may be due money from a music publisher or a performing rights society, (2) whether your Dad performed as a union musician on sessions, and (3) whether your Dad signed recording agreements with record labels as a featured artist (or member of a band).

musicmoney5.jpgYou can review some of this information on your own. For example, societies such as HFA, BMI or ASCAP should be able to verify whether your Dad is listed as a songwriter.  If your Dad was a union musician, he may be entitled to payments from the Sound Recording Special Payments Fund. If your Dad signed recording or management agreements, you need to review them to determine how payments are to be made (and to see whether they expired). You may also need to track the change in ownership of the record labels as the business has been in turmoil during the past 15 years. (And, finally, there are Sound Exchange payments from digital broadcasting as discussed in a previous entry.) Ultimately, you may need to hire an attorney who specializes in tracking down payments or hire one of the companies that specialize in these types of investigations (although we have not tried their services and cannot vouch for them).

May 26, 2009

Getting Paid from Webcasts and Satellite Radio

Thumbnail image for gps_satellite_nasa_art-iif.jpgDear Rich: Someone heard our band's music on Sirius (the satellite radio station). Do we get paid for this? What do we do? I'm so glad you asked. The short answer is that the band's songwriters (and music publisher if you have one) will get a payment from ASCAP or BMI (the performing rights socieities), and the band should get a payment from Sound Exchange for performance of the recording. In order to receive these payments, you will need to sign up with the relative services, as I'll explain below.

If your band hasn't decided how it will treat songwriter income, you'll need to work that out. Then the songwriters (and publisher) must sign up with ASCAP or BMI, register the songs, and wait by the mailbox (or bank, if you choose direct deposit). But unlike over-the-air radio frequency performances (AM and FM radio), a webcast or satellite radio station also pays a royalty fee to the artist. That payment is collected and paid by SoundExchange.  (You should download the paperwork from their website and register as a featured artist.) 

musicmoney4.jpgYou can find out whether SoundExchange is holding money for you by checking the list of unregistered artists . If you don't see your band here, then Sound Exchange is not currently holding a check for you.