Luxgraphicus Design Agency


Putting a price on intellectual property of design?

You need more than a handshake.

How would you pay for the intellectual property of your business?

Specifically, the visual material which forms a vital part of the intellectual collateral associated with your business.

I’m not going to tell you the best way, or the cheapest way, or even my opinion here. I’m going to pose the question and provide some alternatives, then let you decide, or at least think about, the answers. Of course, if you’d like to discuss your ideas I’d love you to contribute to the blog here with comments and questions.

As designers, we’re creating intellectual property. But who owns it? Our clients commission us to do it. They pay us. (usually!) It’s created to be used in the operation of the business. But on what basis is it sold to the business? Does the initial fee cover the ownership of the intellectual property? Who owns copyright? Who has license to use the material?

Most of these are legal issues of course, which is not my area of speciality, although I do have some knowledge of copyright law and its application. I’m not going to dive into the deep waters of the legalities here!

But, as the owner of a design business, I am interested in how other business owners would be prepared to pay for the material created.

Recently I’ve been working on several approaches to licensing and payment for branding and identity projects. How would you be prepared to pay for the intellectual property which is so important to your business?

Here are some options;

Pay an upfront fee for the design work, and a license to use the work for the intended purpose. (later negotiation required for use beyond the original scope)

Pay a lesser upfront fee for the design work, with an ongoing (monthly or quarterly) fee for the license to use the work. (with outright transfer of the copyright after a negotiated period)

Pay a lesser upfront fee for the design work, with an ongoing premium on subsequent use of the work in designed and/or printed material. (with outright transfer of the copyright after a negotiated value of work completed)

Pay a greater upfront fee for the design work and full copyright ownership of the work. (no further negotiation required)

All have their strengths and weaknesses. There are, no doubt, alternatives too. As well as analogies from other industries.

As the owner of a design business I have my own preferred options, and as an innovator and entrepreneur, I can offer business owners added value through additional services within the licensing options, but which would the market support? (I’ll fill you in on the added value bits in subsequent posts!)

So which would you, as a small business owner or operator, be prepared to accept, to secure the intellectual property of your business?

Over to you…

Brian.

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