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Q:  Hi Linda Joy Kattwinkel.

I got to know your work through AIGA. I’ve been reading your articles and learning a lot from the examples you wrote in Legalities. Thank you for that content. I’m a freelance designer that does concept art, storyboard and matte painting and I have some questions that I would like to know your guidance. I think this could help other freelance designers too.

Today there are many websites that act as online marketplaces for selling different digital assets for commercial use. The options range from templates, grids, mock-ups, icons, types, 3D models, photographs, scripts and plug-ins to be used in audiovisual products, games and others. There are techniques for creating digital images developed especially for this type of use called photobashing or kitbashing. Buying these assets for commercial use in the form of kits, libraries or plug-ins helps freelancers to create an asset bank and have tools that speed up the work. To cite examples of marketplace sites that sell assets, I mention Turbosquid, ArtStation Marketplace, Photobash.co, Unsplash, Bigmediumsmall.com, Kitbash3d, Cgtrader and Blender Market.

These marketplaces offer different types of licenses and I always try to buy the commercial license that permits me to use the product repeatedly without paying royalties. Most commercial licenses allow commercial use in to develop illustrations, renderings, videos and use the plugins, the restrictions are to not pass on the original files, resell or intend to pass as owner of the acquired files.

As an alternative to markets that sell licenses, there are also sites that offer assets under Royalty Free, CC0 and Public Domain licenses, such as Poly heaven, Thebasemesh.com, Sharetextures.com, Blenderkit.com, 3dmodelscc0.com, Freepoly.org, Myminifactory.com and others. Some of them are exclusively CC0 [Creative Commons “No Rights Reserved”) and others are hybrid and the license type is specified at the model page itself.

 What are the best practices for using third-party materials that I have licensed for commercial use or acquired under a CC0, Royalty Free license or Public Domain?

A: Thank you for these questions. I think they are relevant for many designers using digital assets.

First, it is important to understand what’s happening when you sign up to use third-party assets like these . Each site will have its own terms for licensing use of its assets to you. Many of these sites have two different types of license “use” categories:

(1) Marketplace Usage

Marketplace usage categories cover how you and your client will use the works you create based on the assets (I’ll call this your “work product” to distinguish them from the original assets. Some sites call your work product “creations” and the original assets “unmodified content”). The range for such usage categories can be from quite limited to widespread scopes of use. Here are some typical examples:

These categories vary from site to site. Many sites offer a full commercial license without lesser levels of usage. Others offer commercial licenses for everything except branding (it might be possible to obtain a license for branding at an additional cost). On some sites, usage restrictions are imposed by tags on the individual assets. Some sites have additional usage categories for games and videos which come with restrictions unique to that category. Also note that there may be other restrictions on usage across all usage categories. For example, if an original asset includes a company’s name or trademark, typically you will not be allowed to include that in your work product unless you have that company’s permission.

(2) User Level

The user level is about how many people will have access to the native assets files. The range for such user categories range from one person to large corporations. Here are some typical user levels:

Both the marketplace usage category and the user level will affect the price of your license. These categories and levels vary from site to site, so you must carefully read the specific license on the site you are accessing to ensure that you select the correct usage category and user level.

Payment structures can also vary. Some sites are subscription-based; some charge per asset, and some offer both options.

Note that all licenses are about usage of the work product you create, and they are about your user level. All sites strictly prohibit assigning or sublicensing your license to any other entity, including your clients. Your clients are allowed to use only your final work product under these licenses. As discussed below, if your client wants access to the original assets, the client will need its own license from the site.

The best practice when using these types of third party assets is to do as you have described, that is, obtain the broadest, least restrictive license that you can. From this perspective, CC0 licenses are the best option, since they come with no usage or user limitations at all. See https://creativecommons.org/share-your-work/public-domain/cc0/.

However, the types of assets available under CC0 are limited. When you need to use assets from another source, royalty-free license options are best (and this is typical for most sites). Your clients will prefer not to be burdened with the task of tracking due dates and paying royalties, and you (and your clients) are less likely to get into trouble for neglecting to pay royalties.

Second, licenses with the widest scope of allowed usage for your work product are generally best. Typically, these will be labeled as a “commercial” license. Clients do not want the burden of keeping track of and complying with usage limitations for their content; or, if they exceed such limitations, they can get themselves (and you) into trouble for violating them. I have seen many scenarios where new personnel in a company will find old content and repurpose it, unaware of and inadvertently violating license limitations.

If you cannot acquire a wide scope of usage rights, be sure that the license you acquire will match the marketplace usage that your client requires. For example, an “editorial” license will not work for a client that will use your work product in movies or video games. If you need a wider scope of marketplace usage for your client than the asset site’s standard usage categories describe, try contacting the site. Many encourage you to contact them for working out a customized usage license and pricing. Also, choose the correct user level for your license. For example, a single designer working as independent contractors would choose the “freelancer” category.

In all of these scenarios, the final and most important best practice is to carefully read the license you are obtaining. Implement any restrictions into your project database and your agreement with your client. Be sure that your statement of work or main contract document specifically calls out the types of licensed content that you will be incorporating into your work product and the usage restrictions that might apply. You should also have a contract provision that explicitly holds the client responsible for honoring usage restrictions that apply to your work product (see below).

Q:  When doing commercial work (work for hire) I have come across buyout agreements that ask me to give all the copyrights for the works I do for the project. Especially when it comes to audiovisual companies that do movie productions that will be shown on streaming services or games. In these cases, how does it work if I use the third party resources I mentioned before as part of my creation?

These buyout contracts also have an originality clause, where I need to certify that I was the creator of the illustration/concept that I am passing on to them. My creation is original, however it may contain parts of the assets I used to make it. These assets are sold in marketplaces for many other freelance designers and could be viewed also in someone else’s work. I buy the asset license to use it commercially, but I do not have exclusivity or authorship over it. For example if I use a castle that comes in a kitbash kit to create a painting that will appear in the background of a medieval movie scene. I modify the castle according to the production direction I’m in, but some parts of the castle can be recognized. In that case, what might happen if the same Castle appears in the background of another medieval movie? Could this cause problems? 

A:  You are correct to be concerned about these pervasive copyright assignment (and often, “work made for hire”) provisions and originality warranties in blanket buyout agreements. Some of these are leftovers from pre-digital times when it was not common for a designer’s work product to incorporate pre-existing works. Others are there as part of generic consultant agreements that many companies use for all types of vendors, which are not tailored to the realities of design work.

Buyout agreements are particularly common for movies and video games. These provisions are meant not just to shield the movie and game studios from infringement liability, but also to ensure that their imagery will be unique to their product.

When you create a design using third-party digital assets, you are creating what’s called in copyright law a “derivative work” – which basically means you are adding new copyrightable authorship to the underlying asset. You will own exclusive copyright in the new imagery you create, including whatever modifications you have made to any particular asset. That is the only scope of copyright that you can legally assign to your client. As you mention, it is entirely possible that someone else can use the same asset to create another image, and there may be a recognizable similarity between that person’s derivative work and your derivative work. This may not be acceptable to a client who is expecting to receive from you imagery that will be unique to their project.

The best practice for creating your new artwork is to make your work as unique as possible: use many different assets to create your image, modify the assets extensively, and add a lot of your own imagery. This will limit the chance that someone else will create a recognizably similar work.

The best practice for your client contract is to ensure that your client is aware that you (like probably every other digital artist in the field) will be using third-party assets to create the works for their project; and ensure that your contract recognizes this reality. More current buyout contracts include language to this effect. Here is a common example from a company’s boilerplate contract:

Pre-Existing Works. All content delivered by Artist to Company under this Agreement  (“Work Product”) shall be wholly original material, subject to the following: In the event Artist wishes to use or incorporate into the Work Product any intellectual property developed, acquired or otherwise obtained prior to or independent of this Agreement or any applicable Schedule (collectively, “Pre-Existing Works”), Artist shall notify Company, and a designated Company executive must agree in writing (email to suffice), before incorporating such Pre-Existing Works into any Work Product. Artist hereby warrants that such Pre-Existing Works are either wholly owned by Artist, or that Artist has obtained for Company or shall provide information to enable Company to obtain, a non-exclusive, perpetual, fully-paid and royalty-free, irrevocable and worldwide right (with the right to sublicense as part of the Company Works or in connection with a Company Work) to Use, in any method, manner or media now existing or hereafter developed, such Pre-Existing Works, solely to the extent such Pre-Existing Works are incorporated or used in the Work Product.

If, as discussed above, you’ve had to use an asset under a restricted usage license, it is advisable to revise boilerplate like the above to make this clear, for example:

Artist hereby warrants that such Pre-Existing Works are either wholly owned by Artist, or that Artist has obtained for Company or shall provide information to enable Company to obtain, a non-exclusive, perpetual, fully-paid and royalty-free, irrevocable and worldwide right (with the right to sublicense as part of the Company Works or in connection with a Company Work) to Use, in any method, manner or media now existing or hereafter developed, such Pre-Existing Works, solely for the purposes of Company’s project (as described in the statement of work, design brief, or other document setting forth the scope of Company’s use for the Work Product upon engagement of Artist), and to the extent such Pre-Existing Works are incorporated or used in the Work Product.

You should also add a provision that makes it clear that your client is responsible for honoring the usage restrictions. Here is an example that broadly protects artists from this and similar types of intellectual property liability potentially caused by your client:

Company shall be solely responsible for complying with third party licenses for use of Pre-Existing Works, and Company shall indemnify, save and hold harmless Artist from any and all damages, liabilities, costs, losses or expenses arising out of any claim, demand, or action by a third party arising out of Company’s failure to do so, or Company’s failure to obtain copyright, trademark, publicity, privacy, defamation or other releases or permissions with respect to materials included in the Work Product at Company’s request.

Q:  Finally, the commercial licenses for these assets prohibit the transfer of 3D models or photos in the original form, especially for photos, games or files where the models can be extracted and reused. So I can use them in my studio only. However, it may happen that in a production my client wants to acquire the work or original files. This could happen in two situations, first, when I need to give the work file to the client to animate the scene. In this case, if I pass the file that has a painting I made using asset photos and rendered form of the 3d assets I don’t send him the original assets.

But, the second situation is when my client requests the work files from the 3D software or all the original files used to keep them for future use if the show goes on. If this happens I can’t send the 3d files cause he could extract the originals from them and can’t send the original files as it is. In this situation should I ask my client to buy the license from the vendor on the marketplace? How do I know if this has actually been done before sending him a file that contains the 3d assets? What’s the best way to handle this relationship between my studio, my client, and the authors I buy assets from? Do I need to ask my client to credit these third party authors in their production credits, how does it work?

A:  Good questions. Under the third-party asset licenses, you are not allowed to give your client a file that would allow the client to extract the original asset. Typically, your final exported file of your work product will not give the client the ability extract the original asset, so that should not be a problem. However, if your client wants your native work files, from which the client could extract the original asset, that would violate the third-party asset license. Here’s an example excerpt from https://www.bigmediumsmall.com/license-agreement:

Studio License

This License could be stored on your company server and gives permitted use of a 3D Asset Collection for up to 100 artists. This License does NOT permit you to transfer the License to another studio working for you as a subcontractor. See restrictions below.

Restrictions

You can NOT sell, lend, lease, rent, sublicense, or distribute any part of a 3D Asset Collection as a 3D model.

The solution is, as you’ve suggested, to explain to your client that you are not able to give the client the native work files because of the terms of the third-party asset licenses. Your client will need to procure its own license for the assets. Your client may expect you to obtain the license for them (or at least to pay for it); and if the particular platform allows you to do so as the client’s agent, you can purchase it for them.

Note that under asset license terms like the example above, the license must be in the client’s name, not yours; and it must match both the correct marketplace usage category (typically, “commercial”) and the correct user level for the client’s size (typically, an Enterprise License), not your freelance or studio size. Note that there will likely be restrictions on what your client can do with the native asset files. For example, many sites forbid using their assets to train AI. Although it will be the client’s ultimate responsibility to comply with such restrictions, your client may be tempted to blame you if they inadvertently violate the restrictions. The best practice (in addition to including the contract language above) is to inform your client in writing that certain restrictions exist and tell the client to carefully review its own separate license for the asset files (it is best to provide a direct link to the license itself rather than summarize the restrictions yourself).

If your client obtains the license itself, you can have them send you a copy of the purchase confirmation when they receive it from the site. Then it will be safe to send the client your native work files.

With respect to giving production credit to the asset authors, I don’t see attribution requirements in the typical asset licenses, and it seems to me that requiring such credit would be antithetical to the purposes for which these assets are offered. I think it is more typical to give credit to the creators of the final derivative works (your work product, and any modifications made by your client). But it will be your responsibility to read each asset license carefully to make sure there is no requirement for credit. If you find such a requirement, you should either look for a substitute that does not require credit, or explain to your client that they must include credit to that asset provider whenever they use your work product. The latter is risky, however, because clients are likely to lose track of such requirements and violate them. Even though such oversights will be their responsibility, they may be tempted to blame you for the problem.

Bottom line: you must always read the fine print: review the site’s license options, choose the right license usage category and user level for your project, note any other restrictions, and ensure that you and your client will not violate them. Use of the assets in violation of the license restrictions can result in breach of contract and copyright infringement claims against you and your client.

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You are invited to submit questions about this article, or for upcoming Legalities columns. Please send your questions to Legalities@owe.com.

Legalities^SM is a service mark. © 2023 Linda Joy Kattwinkel. The information in this column is provided to help you become familiar with legal issues that may affect graphic artists. Legal advice must be tailored to the specific circumstances of each case, and nothing provided here should be used as a substitute for advice of legal counsel. Linda Joy  is an attorney, painter and former graphic artist/illustrator. She practices intellectual property law, arts law and mediation for artists in San Francisco. She can be reached at 415-882-3200 or ljk@owe.com.