Clients wants to own copyright/IP of a typeface

Kasper Pyndt

I'm doing a project for a client who potentially wants to do a full buyout of the typeface. So not only do they want full unlimited exclusivity, they want to make the font their intellectual property.

From what I've understood through my contact to their legal department, they don't want to be tied up to any one designer for future adjustments, and want to be able to alter the typeface however they like. 

So I'm looking at a situation where I might have to give a price for a full buyout of the typeface which—as it stands—consists of two weights (no italics) and a basic Latin 1 character set. 

How would you go about this? What kind of thinking would you apply when coming up with a number? Never been in this situation before & struggling to come up with a number.

Thanks
Kasper

Thomas Phinney

Is it a typeface you had already designed, or a new typeface?

How much commercial potential does/did it have other than for the client?

Have you already negotiated a price that includes exclusivity, or do you already have a standard price adjustment for that?

Do you like doing extensions and tweaks, and charging for them, or do you find that unexciting?

Personally, I am happy to do tweaks and extensions. And your typeface sounds reasonably basic or barebones, with plenty of room for more work. So, if I already had an “exclusive” rate, I would take the exclusive price and add 25% to it to make up for the lost future work.

If you have never done an exclusive project before, you might double your rate for exclusive. Or at least add 50%.

Alternatively, you can look at the entire thing as work-for-hire and try to ensure you get a really good hourly rate.

Andreas Stötzner

1st, under which jurisdiction this happens, may have to be a concern in legal terms. I’m not a specialist with such matters.

2nd, it may be worth consideration to just split the IP matter from the task of selling a licence with satisfatory terms (of future usability) for your client – and generating a satisfactory reward for you, the supplier. I don’t see it is inevitable for you to give up entirely upon your (natural) IP rights since you are (and remain) the creator of that typeface. However, no one can hinder you to sell a licence (whatever price, you name it) which allows the client for all possible future alteration to your design, if he wishes to do so. I’d say this licence variant would not at all touch the fact that you are the initial creator. I’m not even sure if it is possible actually to give up the IP since you still are and ever will be the designer of the original product, may happen with it in the future whatsoever.

Thomas Phinney

Andreas Stötzner said:

I’m not even sure if it is possible actually to give up the IP since you still are and ever will be the designer of the original product, may happen with it in the future whatsoever.

IP is a very broad term, and vague. There are a lot of rights one has initially, as a creator. Whether there are any rights you cannot give up depends on the jurisdiction—some jurisdictions such as Germany recognize inalienable moral rights, including the right to recognized as the creator of the work.

Whether those particular rights include rights the client is concerned about is another question—and again might depend on the jurisdiction. I for one would not be surprised by if “the right to be recognized as the creator of the work” was perhaps not an element of “making it their intellectual property” that this client cared about.

Kasper Pyndt

Hey Thomas, answering in bold below:

Thomas Phinney said:

Is it a typeface you had already designed, or a new typeface?
It's a new custom typeface I'm currently designing for the client.

How much commercial potential does/did it have other than for the client?
It does not have a lot of commercial potential, in my estimation.

Have you already negotiated a price that includes exclusivity, or do you already have a standard price adjustment for that?
We have already agreed on a price that includes full exclusivity – around 15k USD per cut. 

Do you like doing extensions and tweaks, and charging for them, or do you find that unexciting?
I'm a rather new independent designer and wouldn't mind doing work like this. Right now, pretty much all work is exciting work ;-)

Personally, I am happy to do tweaks and extensions. And your typeface sounds reasonably basic or barebones, with plenty of room for more work. So, if I already had an “exclusive” rate, I would take the exclusive price and add 25% to it to make up for the lost future work.

If you have never done an exclusive project before, you might double your rate for exclusive. Or at least add 50%.

Alternatively, you can look at the entire thing as work-for-hire and try to ensure you get a really good hourly rate.
To cover exclusivity, I'm adding 100% to my hourly rate for future tweaks and extensions to the typeface, given that they don't make a buyout of the typeface and choose to work with someone else.

So, what I'm essentially looking for is a way to calculate how much they should pay—as a one-time fee—to gain the right to do future alterations to the typeface without my consent. Maybe you answered in the above paragraph, but I didn't fully understand; Would you say it's just a simple question of trying to "guess" how much money I could've earned from not giving them copyright, and then use that as my price?

Kasper Pyndt

Andreas Stötzner said:

However, no one can hinder you to sell a licence (whatever price, you name it) which allows the client for all possible future alteration to your design, if he wishes to do so.

Yes, so what I'm asking is: How do I estimate the price of a license that allows them to alter, modify or expand the typeface in the future without my consent if they so wish? Do you have experience with estimating such licenses, and what should be my main considerations when developing such a quote?

Thomas Phinney

Well, you are saved from doing the work. It is a “bonus” of sort of insurance against the loss of potential future work. So I would definitely not charge as much. Maybe figure out, on average, how much future work there would be (multiple $ value of work times the chance of that work happening). Then charge say 1/4 or 1/3 of that, since you are not even having to do the work.

Perhaps it involves 120% more work—italics and some language extensions. You think there is a 50% change of each part happening. So that’s (1.2 × 0.5 60% more. You then only charge 1/3 of that, since you won’t even have to do the work. So you up your price by 20%.

Or just add some fixed amount, probably in the 10-25% range.

Leastways, those are the ways I would go about it.

Kasper Pyndt

@Thomas Phinney

Thanks a lot for the breakdown!

I'm just wondering if it shouldn't also cost something to "buy" the freedom they get by being able to just do whatever they want with my work – and potentially make a complete mess of it. There's a sense of pride that's to be considered here as well

John Hudson

We have clients who decide they want to own all the rights to fonts we make for them. Usually this is something that is understood from the outset, in which case what we're doing is 'work for hire'. Occasionally, we make some fonts on a time limited exclusive license basis but then the client decides they would prefer perpetual exclusivity and to buy out the IP for the sort of reasons you identify.

My take on this is that whenever you are selling your IP you should be charging a premium, regardless of whether you think now that the fonts don't have much commercial potential. Remember, when you sign away ownership of the fonts you are also signing away the right to make any derivative fonts. And yes, you're giving someone else the right to mess up your work.

We have a Transfer of Rights agreement that we use in these cases, in which the designers retain the moral right to be identified as the designers, and in which we retain the right to speak publicly about the project and to use the font ourselves in promotional and teaching situations.

Since you're not charging them a huge amount already, I would be comfortable doubling that to include transfer of rights. If they're serious about wanting to own the fonts and understand the value of what they're getting, they shouldn't balk at that.

Thomas Phinney

Well, that's part of the “pick your fraction multiplier” part, where you choose a fraction of the expected value. If you really don’t want them to do stuff without you, either pick a (substantially?) larger fraction … or just say no, you don’t want to sign away all rights! It kind of seems like that is your preference, perhaps?

Another option would be for the contract to give you “right of first refusal” for future enhancements. The contract could allow them to discuss future enhancements with other people, but it could ALSO require them to also discuss it with you before they actually contract anyone else to enhancements, and give you the option of doing it for the same amount of money they negotiate elsewhere.

That at least gives you a shot at doing enhancements, but does not lock them into working with you if your pricing is higher.

Kasper Pyndt

@John Hudson

Thanks so much for the enlightening comment!

Turns out the client was mainly concerned about me having the right to sell/distribute the font to someone else in the future and they'd feel more safe by owning the IP. Even if we had a full exclusivity agreement in place. Will see how this develops. For now, I've suggested an additional 100% for a buyout, like you suggested.

@Thomas Phinney

I would actually prefer if the client bought the copyrights. They'd most likely still work with me in the future and it'd be good money ;-) but things are sort of veering towards them sticking to the original plan with "just" unlimited exclusivity.

Your note on "right of first refusal" makes a lot of sense!

JoyceKetterer

There's a middle position.  We sometimes offer clients the right to have the fonts modified/expanded by someone else without transferring ownership of the IP to them.  It's always for a fee, but they can pay speculatively. 

We have a couple levels. At the lowest level we are still involved, we vet the plan and the contractor and do review of the final product.  The fee paid at the outset is covering our time for those minimal tasks.  At the highest level they can do whatever without approval but we have control over the naming of the files and if it's really terrible we can force them to pay for us to fix it.  

We also make a strong distinction between modifications (swapping characters, adding a currency symbol, making minor changes), expansions (adding styles, new scripts, weights, etc) and derivative works (changing the look and feel of the exiting character set).  Usually the last is forbidden.

We find that most clients who ask for this sort of thing are mostly worried they will need something we can't do - or can't do fast enough.  We're small and they know that.  What if we closed?  They don't want to be stuck.  So these assurances usually sort it.