International License Agreements for U.S. Artists & Related Legal Issues
An artist in the U.S. may want to pursue audiences around the world. This will require licensing their work to foreign entities. Before you sign a license agreement, you should make sure that the foreign company is reputable. You will rely on them to monitor and enforce your rights in their region. If possible, you should choose a company that has worked with U.S. artists in the past, or at least a company operated by people who have worked with U.S. artists. You should get the contact information of other Americans who have worked with the company so that you can ask them about their experiences. The company may provide you with references voluntarily, but you should contact other artists beyond the references to get a broader picture. If the relationship breaks down, suing the foreign entity can be cumbersome and costly, so it makes sense to avoid problems before they arise.
When you prepare to enter the international market, you may want to learn about the common terms and principles that you will encounter in this context. Some resources to explore include the websites of the U.S. Department of Commerce, the Small Business Administration, and the Federation of International Trade Associations.
Drafting the License Agreement
A well-crafted license agreement will define the duties of each party and provide a means for resolving any disputes that arise. For example, you may need to get copyright registration for your work in the countries where the licensee will be selling it. The agreement may provide that the licensee will handle the process of copyright registration, since it is better positioned to address the related logistics.
You also may want to require the licensee to regularly send you copies of your work so that you can approve its quality. Major companies in the U.S. may conduct on-site inspections of the facilities where their products are manufactured, but this likely is not feasible for an individual or small business. However, reviewing copies of your work will help you feel comfortable that the licensee is following your instructions rather than cutting corners.
Money issues can be complex because of currency conversion rates and the various types of taxes that may apply to royalties or sales. The agreement should describe the way in which you will be paid and require the licensee to pay you in U.S. dollars. You may want to require the licensee to give you access to their books so that you can audit them periodically.
Preparing for Disputes
Even if you feel confident in your choice of licensee, you may need to resolve a dispute with them in the future. The license agreement should provide that the licensee consents to jurisdiction in the U.S. so that you do not need to handle the matter in a foreign country. (If a licensee already conducts substantial business in the U.S., they may be subject to U.S. jurisdiction already, but you should not take this chance.)
The question of which court will resolve a matter is different from the question of which law the court will apply to resolve it. You should include a choice of law provision in the agreement that applies U.S. law and the law of your state to any disputes, rather than the law of the licensee’s country. This will allow you to protect your rights more easily.
Finally, you may wish to arrange to have a dispute determined by an arbitrator rather than a court. The arbitrator will make a decision on the merits of the dispute, which generally will be binding on the parties. An arbitration clause often provides that the losing party will pay the attorney fees of the winning party. If the licensee refuses to arbitrate disputes in the U.S., you can agree to arbitration in forums in London, Paris, or Stockholm.
