How to… generate revenue from intellectual property

The arts sector is founded upon acts of creativity, collaboration, curation and performance. But what are the legal consequences of these acts? Within arts organisations there is some uncertainty and confusion about what types of intellectual property (IP) exist, who owns the associated rights, and how best to generate revenue from IP.

Our advice is to get as much as possible in writing at the beginning of a project so you know what rights you have and for how long

The Boosting Resilience programme is designed to help the sector develop new approaches to making the most of their creative assets and IP. Our second residential in Birmingham in March provided individuals with a ‘check-in’ regarding their IP needs, through rapid-fire feedback collected on luggage tags (reflecting the theme of ‘the participant journey’), and one-to-one surgeries with Noam Shemtov of Queen Mary University of London and myself.

From the evidence we collected in this way, we identified a number of barriers currently preventing some organisations from making best use of their creative assets.

Understanding copyright

Arts organisations make use of every type of work that can be the subject of copyright – musical works (compositions), artistic works (paintings, drawings, sculptures), theatrical works (plays, musicals), literary works (poems, novels) and photographs. However, several participants admitted they were unclear as to who owned the copyright to the works they possessed as records they held on ownership were often incomplete or missing.

Under UK law the author or creator is the first owner of the copyright in an original work, which arises automatically and does not require registration. The author (or joint authors) can then license or assign it to another party if they choose to. So a play may be licensed to a theatre company for a series of theatrical performances or a painting, drawing or sculpture may be sold to a museum or collector. Our advice is to get as much as possible in writing at the beginning of a project so you know what rights you have and for how long.

Clarifying what copyright works your organisation has rights to is the first step to generating revenue via publication, digitisation or licensing. Importantly, even if you cannot establish the owners of a copyright work, provided you follow the rules for orphan works, you can still generate revenues by utilising or licensing the work.

Understanding trademarks

Trademarks, the words or symbols that are used to distinguish an organisation’s offerings, are more straightforward. Arts organisations should ensure they own the logos and brand names they use. Trademarks can be registered at the UK Intellectual Property Office for around £200. Even if your organisation doesn’t register its brand name, the law can still prevent someone else from using your name through the law of ‘passing off’ (also known as ‘unregistered trade mark’ law), though this is a little more complicated and expensive.

Once a brand name is protected, the work of building or enhancing the brand begins. For some organisations this may be simply promoting their existing reputation. Many arts organisations in the UK already have worldwide brand recognition, such as the Royal Shakespeare Company, the Tate and the Manchester International Festival, while others have extraordinary brand appeal within their fields such as Complicite or Punchdrunk in the theatrical realm.

Brand enhancement doesn’t have to mean corporate partnerships or tie-ups, but if done well such deals can be mutually beneficial. For example, a recent three-way partnership between the Louvre, Jeff Koons and Louis Vuitton generated a lot of media attention.

On a smaller scale, one of our participants had organised to license a wide range of heavy metal music memorabilia for an exhibition that was moving from city to city within Europe, providing revenue both to the owners and the arts organiser.

Clarifying the ownership of joint works 

In collaborative artforms such as theatre, music and visual arts there is often tension between the need to protect and the freedom to create. We advise making an agreement, ideally a written contract, between all relevant parties before the creative process begins.

That should prevent disappointment or disagreements later on once a work has become successful. Furthermore, in an age of arts digitisation and user-generated content, clarifying what uses your audience and consumers can make of your works can prevent disputes arising. For more on this read the essay on Arts, brands and user-generated content by Arts & Business.

Yet, some organisations and freelance creators do not like formalising the creative process for fear that it will inhibit their creative practice. This is a tricky problem. There is ‘no one size fits all’ model. Each organisation must weigh up the pros and cons with any partners and consider what the appropriate balance is from case to case.

Arts organisations don’t always find the right balance. In 2004 a High Court battle over authorship and revenue-sharing was fought between the playwright Marie Jones and the director and theatre company who mounted the first production in 1996 of Stones in His Pockets.

More positively though, in 2016 Lin-Manuel Miranda agreed to share a percentage of the Hamilton revenues with members of the initial cast, acknowledging their input during the workshop and rehearsal process.

Initial costs

In a world of scarce resources, can IP help to boost revenues? It can, if used wisely. Once you have identified the IP you or your organisation possess and have clarified any questions of ownership (by drawing up appropriate contracts with creative partners), you may then be in a position to generate revenue from your IP.

Doing so can often require initial investment, first in clarifying and compiling your IP portfolio, and second in promoting it. Arts organisations and freelance creators must weigh up the initial investment costs versus the projected revenues.

Allowing other artists and entrepreneurs to make use of your brand, copyright characters, images and set designs in imaginative and innovative contexts can reap rewards, but only if appropriate agreements are in place so that revenues are shared.

Last year the owners of a pop-up bar in Chicago arranged the site to look like the set of the Netflix show ‘Stranger Things’. They did this without a licence, which clearly violated trademark and copyright law, and led the producers of Stranger Things to send them a ‘cease and desist’ letter. This acknowledged the bar as a genuine piece of fandom, but firmly requested that it did not extend what it was doing beyond the initially planned six-week run without formally obtaining permission.

So, clarify what IP you have and who owns it, register your brand name as a trademark and make written agreements with your creative partners, employees and any freelancers to specify ownership and revenue-sharing. Then consider your resources to decide the best ways to promote your works and your brand, including partnerships with other bodies in the arts field or the corporate sphere.

Luke McDonagh is a Senior Lecturer in the City Law School at City, University of London.
www.city.ac.uk/law

Further advice and mini case studies on IP for the arts and creative industries can be found in the Nottingham Intellectual Property Guide for Creatives, written by Janice Denoncourt and colleagues at Nottingham Trent University, who receive funding from the UK Intellectual Property Office.

The article, contributed and sponsored by Boosting Resilience, is part of a series on making the arts and cultural sector more resilient.