The Legal stuff

[Cubist]

Hello all,

Maybe this has already been addressed, or perhaps it hasn't but I did want to raise the issue. In my opinion, this site is fantastic. It has a real confortable, trusty feeling as opposed to sites like elance, where you throw your money and aren't sure what you'll get in return. The question I raise has to do with the legal structure of paying for work through sites like D.O. The Client pays money to D.O (DesignOutpost) and D.O pays the winner of the contests. Once the client has chosen a winner they are sent the works. This purchase is a non-exclusive one, and the designer maintains all copyrights to the original works.

Question: What is necessary in order to make this an exclusive purchase - in other words, transfer ownership to client for all works paid for.

Example - Suppose a client put up a contest for a template. This template would be a photoshop comp only (no html code, etc..). Then client sold templates to their clients in a specific niche market and made appropriate changes to the template for them (graphics, content etc...). How could this be done legally?

I guess my question would be mainly towards designers on this forum. Since you operate as Independant contractors and aren't employees of your clients then you maintain all copyrights to your works. How many of you sign over ownership of your works already? how many of you would do it if asked? How many wouldn't? or what arrangements would be satisfactory to you? I do have some work that would fit the second category and I'm curious what kind of feedback I get prior to submitting any of these contests. I've already got some templates, but I was looking to add about 3-4 more just to round out the options for my clients. Obviously if this would cause problems, then I would create all the templates in house, but I do love the variety of work that comes from posting on D.O

Thanks
John

[Zoe]

Palmer has set up a reseller section where you can have templates and or logos created that you will then sell to others.

Designers are aware before entering of the terms though it is still a good idea to explain your own terms in the post.
These competitions are set at a higher price.

It is best to contact Palmer direct about the reseller program and he will explain the ins and outs.

[Palmer]

There have been a few discussions regarding who owns what when the contest is over, I'll find a link to one in particular that covers this area. All the designers here understand that by entering a contest they are more or less "agreeing" to the terms set by the contest holder.

Your statement about that the designer maintaining all copyrights to the original works is not necessarily true about how the site operates. It is pretty much understood by the designers that every time they win, they hand over the rights to the contest holder. So you are in fact "buying" an exclusive product from this site with your contest prize.

If something is stated in your first message regarding words to the effect of "By entering this contest you agree to give up full rights to your work and you will not replicate it for any other contest or client" should cover any legal rights of ownership from the designer.

One of the contest holders recently put this disclaimer at the bottoom of his first message which I feel covers the ownership part...
Upon completion I would take full ownership/rights of the winning graphic/site template and it or parts of it would not be reproduced for another site template. I reserve the right to use, re-sell and modify the template at my discretion indefinately.

Here's a link to a similar topic which reiterates what I just said...
http://www.designoutpost.com/forums/index....T&f=10&t=534&s= (http://www.designoutpost.com/forums/index.php?act=ST&f=10&t=534&s=)

[cre8or]

One of the only rights I wish to retain is the one to present my work in my portfolio(s)
either on-line or off-line.

[Palmer]

Right, I totally agree with that.

[ElKootcho]

Actually, I think Cubist is correct in his original post. The Designer does indeed maintain the copyright to the work in question.

Work-For-Hire (http://www.copyright.gov/circs/circ9.html)

U.S. Copyright Basics (http://www.copyright.gov/circs/circ1.html)

I think what makes this extra-tricky are the terms "contest", "entries", "prize", etc. as well as contest holders and designers being all over the globe.

*grain of salt*

[Raja]

It goes unwritten that you "hand over" the rights to your work, it's just ethics.
Most people on this board will follow suit. Others, I can't speak for. However, if you want to make it binding in court, you have to sign a written agreement.

A few previous contest holders have mailed me actual extensive mulit-page legal documents that I have hand signed and mailed back. That's the way to go if you are really worried.

Thats been my experience.

[Cubist]

From what I understand (based on reading copyright law etc...) the designer does maintain the copyright to the works. This is regardless of the fact that I may pay for any of the work. Also, ethics and assumptions get thrown out the window here - and I prefer to operate in legally binding terms. I'm really not uptight or anything, but I've had a few experiences in the past where I've been "screwed" by designers for work they freelanced for me.

I guess my question was somewhat answered by ondarox. I was curious how many of the designers would sign a document stating that the ownership would be transferred. I'll make sure to put something to this effect when I do post contests for templates. I know that when I develop a site for a client - part of the contract cleary states that ownership will be transferred to them. When the work is complete I follow through with the transfer.

Let me switch gears now. Would a job like this (where I asked for owner transfer) be required to be posted in the Resellers section? I guess I don't see the advantages of posting in the resellers section. I understand that it's a private forum, but I'm not really worried about hiding the contests or results of it. I'm also only interested in obtaining the PSD (no html, no slices). Since the minimum for the templates is $250 (plus a one-time $100 fee) in the private forum - I would almost prefer to post in the public forums.

Does the reseller section get more submissions? or priority treatment? I'm just trying to understand how to justify posting reseller vs. public.

Thanks,
John

[Palmer]

The idea behind the reseller forum was to help get these designers a better price for their work and for me to make more profit. It is intended to be used by big corporations and media companies who need to maintain their anonymity. Unfortunately I have not promoted it outside of simply posting a message on this forum and putting a link on the home page.

I still feel that a reseller could make a tidy profit for virtually doing nothing other than showing the work to the client. If they had a steady stream of customers coming in, they could do quite well for themselves seeing what most design firms are paid for logo and site designs.

Currently we have 1 reseller. Obviously the minimum prize amount and yearly membership fee is not going over real well :rolleyes: What do you think would be fair price?

[ElKootcho]

Originally posted by Cubist@Jul 1 2003, 10:59 AM
From what I understand (based on reading copyright law etc...) the designer does maintain the copyright to the works. This is regardless of the fact that I may pay for any of the work. Also, ethics and assumptions get thrown out the window here - and I prefer to operate in legally binding terms.
I agree completely. A lot of people don't understand what they get when they work with a designer. There are TONS of assumptions that are incorrect about who owns what.

[Cubist]

Honestly, I think it is a fair price and your points are very valid. I think what's holding back many people from going this route is that they don't see the real benifits of it. The other thing that get's people is the the upfront payment of $100. I think it's hard to convince people to pay $100 upfront for no real tangible return. I almost think a better approach would be to charge them a 15% premium instead. This way, suppose a reseller joined and posted one project and wasn't satisfied. He wouldn't lose that $100 upfront cash. On the other hand If a reseller was happy, and posted say 10 projects his first year at an average price of $300. You would walk away with an additional $15 per transaction X 10 projects = $150.

For the most part many potential clients to your reseller area will probably be small companies like myself. Putting forth $100 with uncertain results is not an attractive proposition. I wouldn't have a problem paying the 15% percent premium to be in a reseller. And with the 3 templates I already have a need for, I'd be well on my way to $100 in the first month.

Would the reseller area be strictly for Logo's and web templates? or would miscellaneous categories be included as well? I also think creating a minimum required prize is a bad idea (I think recommended would be a better word). I think most people know that they get what they pay for, so many wouldn't have a problem with the $250 prize.

Just my opinion though.

John

[Palmer]

I think that's a great idea John. I didn't think about it but you're right, I probably wouldn't put up the $100 right off the bat as well. I guess since people can clearly see what these guys are capable of, they kind of know what they're going to get but it will be in private.

Unfortuately, Paypal only let's you charge one percentage fee across the board. In other words it's 10% and can't be changed to 15% unless that's what everyone gets charged. I have an account with 2Checkout.com, I'll see what options I have with them.

The resellers area is open to all contests including miscellaneous. I also agree maybe recommended is a better word for it. I would hope that the prize amounts would reflect what the contest holder is planning on getting in return. It would be very sad to see a contest holder offer a $50 prize and resell the logo for $500. That's simply taking advantage of these guys.

[Cubist]

Another point, is that a client of your site may have an immediate need for a project that calls for anonymity, but is unsure whether he'll have future projects with this restriction, or any future projects period. This client might be reluctant to fork up the $100 upfront not knowing what kind of business lies ahead for him or his company (especially in this economy).

Have you considered opening a merchant account and using a more commercial payment system? I see a bright future for your site and it's designers, but eventually I think you'll have to make the switch to a more flexible payment system that doesn't have the restrictions that PayPal and 2Checkout do. I almost walked away from D.O because PayPal was the only option available to make payments. Luckily I found enough value after perusing almost the entire forum with work done by the designers that I decided to submit anyway. Another option would be to open a second PayPal account and put the 15% on that one.

Again, I think that clients will get what they pay for - so if they try to lowball the designers, the designers won't be obligated to submit anything, or might not put as much time into the project. At the same time, I think there will always be your new apprentice designers willing to take on these types of projects because competing with the big dogs (ondarox, cre8tor etc...) right away is quite a challege. It's a great way for them (in addition to the charity board) to gain some experience and start to accumulate their first wins.

Anyway, just some ideas... If you need any recommendations or help with a payment system - let me know. I'd be glad to contribute my experience.

Thanks,
John C

[imageconstrux]

I'll be honest - I didn't every word of every post so far, but I know from some old business classes and the few grand I've spent on attorney's fees here and there, that if I present an agreement, and you agree to it's terms, and receive consideration ($$) for that agreement, then you are conctractually obligated to it's terms.

That being said, it might be nice to have some boilerplate stuff for Palmer to have the designers agree to, so that a contest holder some time in the future, who might be less savvy, forgets to set forth those terms, and ends up getting stuck later.

In that boilerplate, I'd think stuff like 'winning designer may not reproduce said graphic for the purpose of selling, etc, but may use it to demonstrate abilities, such as in a portfolio.' Also in it, there would be something about how the contest holder has all rights to the winning graphic transferred over to him/her, with the exception of the above portfolio rights.

One last thing - might be nice, and give the winners a greater feeling of security, to add some kind of watermark to the winning logo, so it can't be lifted from DO without having to get in and mess with it. It could be a simple graphic that is used as a layer over the winning design and flattened into a jpeg when the winning logo is posted.

I've also noticed some designers pull non-winning logos after a contest - probably a good idea for them, whether the reason is to conserve web space or protect rights.