First Published in Arts+Law newsletter September 2000.
LICENSING YOUR CARTOON CHARACTER
Cartoonists generally do not make money out of their characters unless they enter into licensing arrangements with third parties such as magazines, merchandise manufacturers or animation houses. However, retaining artistic control while guaranteeing a decent return can be far from easy.
Step One - Protect Your Character
Before you think about talking to prospective licensees of your cartoon character, you should ensure that it is protected from simply being taken.
Confidentiality
Be careful when describing your cartoon to other people such as publishers, studios or friends. There is no protection for an abstract idea unless it is kept confidential. This means that there is nothing to stop an acquaintance who hears about your idea for a cartoon character from going home, drawing it up and selling it to the highest bidder.
To ensure confidentiality, make the other party agree in writing to keep your idea secret and not use it without your consent (see our information sheet “Protecting Your Ideas” which attaches a sample confidentiality agreement). If the other party uses or discloses the idea, you may be able to sue.
Copyright
You will have better protection for your cartoon if you reduce it to “material form” (such as by drawing detailed sketches). At this point copyright protection can arise. Anyone who substantially copies the sketch will have infringed your copyright. There is no need to register the copyright as protection is automatic. However, you should keep evidence of your work (for example by keeping a folio and diary) in case some one else later claims to have created your character. You should also put a copyright notice with the copyright symbol (©) stating your name and the year you created the work as a warning to others that you are the copyright owner. For more information on copyright see the Copyright Council’s information sheet ‘Artworks & Copyright’ at www.copyright.org.au.
The position of copyright and employees is different. If you have drawn a great cartoon character as part of your job, most likely all rights to the cartoon will belong to your employer. If you don’t want your boss to own your character you will have to negotiate an agreement in writing or make sure it is created outside your job, with your own art equipment.
If you’ve been using your cartoon as a brand or logo
Further protection for your cartoon may already exist if you have been using it as a brand or logo which has acquired public recognition. If, for example, you have been using your cartoon character to sell your own brand of clothing or as a logo on your business cards, then it may function as a “trade mark”, or in other words, a mark signifying the origin of goods or services. A good example of such cartoons used in the market place to sell products are Mortein’s ‘Louie The Fly’, or SOCOG’s ‘Millie’, ‘Ollie’ and ‘Syd’.
If your cartoon builds up enough of a reputation, you may be able to stop competitors from using a similar character to advertise similar goods or services even without a registered trade mark. However, registration is the best way to ensure protection of your character. For more information on trade mark registration see our Trade Marks information sheet.
Step Two: Licensing Your Cartoon to Third Parties
It is up to you to judge how to get the best return for your hard work. In general terms, the key to maximising returns is to retain copyright and grant limited licences which reserve other rights for other deals. However, types of agreements differ and you should research the types of terms and conditions it might be possible to obtain from a particular licensee. You should also ensure the agreement is clear. Many companies are loath to use written licences. However, it is in your interests to confirm the arrangement in writing, particularly as the licensee will tend to interpret ambiguities or omissions in its favour. Arts Law’s sample Image Reproduction Licence sets out basic terms including approval of sample images, the extent of the licence and the right to attribution.
Some common traps for cartoonists:
Your cartoon is appearing on thousands of mugs and t-shirts with no slice of the profits going back to you. Solution for next time: negotiate a royalty as well as an upfront fee. Or, increase your upfront fee.
Your cartoon is tied up indefinitely while a magazine exercises “first rights”. Solution for next time: put a time limit on any “first rights” option.
The publisher refusing to return your valuable original sketch. Solution for next time: include a clear obligation to return the original within a set time period.
You assigned copyright and lost control of the cartoon altogether. Joe Shuster, for example, the creator of Superman, sold all his rights in his artwork in the 1940s for $180. Solution for next time: don’t assign copyright unless you are getting paid a very large sum.
You should also consider “moral rights” issues; namely the right to be attributed as the author of the cartoon, and the right to object to “derogatory treatment” such as changes to the look of the character by in-house artists or changes to the colours used. As moral rights are not yet law in Australia, you need to write these limitations into the contract. Arts Law can provide you with suitable sample ‘moral rights’ clauses.
In short, many of these issues will involve thinking about the degree of control you wish to retain over your cartoon and how much the licensee should pay. These issues are particularly pertinent in the case of new media and animation rights.
New media and animation rights
In recent times Roger Rabbit, The Simpsons (see below the comments on the Duff beer case), South Park and Ren and Stimpy have proven the enormous value of cartoon characters and merchandising in every possible form. With the potential uses of cartoons growing every day, it is vitally important not to sign away new film, television or new media rights to your character, but to preserve each potential market for yourself. Would you be better off licensing your cartoon on various cartoon websites, for example, than assigning all your “online rights” to a greeting card company which may or may not use them? Arts Law is increasingly finding that licensees are trying to obtain these rights for themselves in the hope that they may one day find themselves sitting on a goldmine.
Some traps which might see you signing away these rights:
contracts which assign copyright. If you assign copyright you will never be able to use the character yourself again, in any media. You may not even be able to create similar characters if these infringe its main design.
contracts which grant “online, “new media”; “interactive” or similar sounding expansive rights to the licensee.
contracts which grant “ancillary” or “secondary” rights to the licensee. Check the definition used. Again, they often include “online, “new media” or “interactive” rights.
contracts which have vague-sounding, broad “permitted use” clauses. If you aren’t sure what the licence is granting, clarify and narrow it.
Contractual warranties
If you are offered a cartoon licence you will probably be asked to “warrant” (make a contractual promise) that your cartoon does not infringe any third party rights. This involves a consideration of issues of copyright, trade marks, trade practices law and defamation.
If you are substantially reproducing another cartoon character you may infringe copyright. Unfortunately, there is no exception to copyright infringement for freedom of expression (for an example of recent court action against a cartoon parody, see the SOCOG copyright case discussed in Art+ Law 99.4). You may also be at risk of infringing a trade mark if the well known character is used to brand goods or services.
There is also the risk that consumers will think that your character is the real thing. In a recent case, Twentieth Century Fox successfully sued a brewing company for producing and distributing a can of beer that was held to be deceptively similar to ‘Duff’ beer, the fictional beer drunk by characters in ‘The Simpsons’.
Finally, cartoons can be defamatory if they target a real person or corporation. If a cartoon has the tendency to adversely affect the person or corporation’s reputation the cartoonist and publisher may be sued. Anne Fulwood, the newsreader, was drawn reaslistically in a Penthouse cartoon entitled ‘News Flash’, which showed her reading the news undressed from the waist down. This was found to be defamatory. For more information on the law of defamation, see our defamation information sheet.
If you give a warranty that your cartoon doesn’t infringe any of these rights and somebody sues, the publisher, website or other person that you gave the warranty to could try to hold you entirely responsible. Accordingly, as with all the contractual issues discussed in this article, it is best to seek legal advice before signing.
