Legalities 36: The Trouble with Design Competitions

Design contests have always been around. Traditionally, contests have been accepted as a way for non-profit organizations, who could not afford professional design fees, to get good design work. Designers were happy to participate for various reasons. Some considered it part of their commitment to contributing to non-profit causes; some, especially students and young designers, saw them as a way to gain experience, and to produce professional work for their portfolios, to enhance their visibility and marketability to paying clients. Lately, however, contests and other forms of “spec” work are commonly employed even by for-profit corporations, even though they have traditionally understood the value of paying for good design and are clearly able to do so.

The online culture of free copying

Why has this happened? I think it has a lot to do with the internet. Since the internet has become the primary way to promote a business, designers have found it necessary to post their work in online portfolios. Search engines routinely copy what’s online, and courts have determined that at least low res images used by search engines are legal. As social media sites arrived, they also encouraged copying. Soon social mediat sites developed models to monetize the posting and sharing of other people’s content on their sites. They impose terms and conditions on their users which give the sites unfettered free use of their content, without providing any compensation to those who create the content except “exposure.” Online stock imagery and crowd-sourcing design sites, especially those based on bidding, do not offer images for free, but for such low fees that they are driving down the value of design. These sites are fostering the impression that images are mutually interchangeable cheap commodities, rather than customized solutions for specific situations.

The “copyleft” movement, which started as a way to share software, has spawned systems like Creative Commons licensing, which encourages free sharing of all online content. http://creativecommons.org/. Some of these advocates want copyright terms reduced, and for “formalities” – the old system that required works to have formal copyright notices and registration in order to qualify for copyright protection – to be restored. The U.S. Copyright Office, under increasing pressure from both non-profit archival institutions and for-profit corporate interests, is again pushing for orphan works legislation, which would allow unlicensed use of works when the copyright owner cannot be located. See Legalities 26.

The design community’s response to spec work

In this context, not only non-profit organizations, but for-profit corporations are increasingly asking for design work on spec, offering only “exposure” as compensation. In 2009, for example, Google sought free work from the country’s most prominent illustrators for Google Chrome. Craig Frazier’s response is unfortunately still appropriate. “Exposure” does not provide a livelihood for designers, and requiring free work from designers is not consistent with the treatment of other professionals, who are routinely paid for their services. See Legalities 32. Ironically, even the 2012 Obama campaign for his job creation program, which had millions of dollars available for marketing, launched a design contest for promotional posters which offered no monetary compensation to participants or the contest winner (and, even more egregiously, claimed ownership of all submissions, not just the winner). This provoked strong reactions from the design community. http://dailycaller.com/wp-content/uploads/2011/10/GAG_Obama_for_America_contest.pdf; http://www.aiga.org/aiga-urges-the-obama-2012-campaign-to-reconsider-its-jobs-poster-contest/; http://www.huffingtonpost.com/2011/10/12/obama-poster-contest-angers-designers_n_1007868.html.

Some designers might find it acceptable to donate their services to a political campaign they believe in. But what about contests by for-profit corporations? Artists’ organizations like the AIGA and GAG have taken strong positions against spec work, including competitions. See, e.g., http://www.aiga.org/position-spec-work/; https://graphicartistsguild.org/news/P10; http://www.no-spec.com/info-for-businesses. Some commercial corporations are sponsoring competitions in art schools as a way to obtain free design services. The National Association of Colleges of Art and Design has responded to this trend with standard guidelines for student competitions. See http://nasad.arts-accredit.org/site/docs/Handbook/NASAD_HANDBOOK_2014-15.pdf (Appendix II.B. NASAD Guidelines / Statement on Competitions.) The NASAD guidelines state, among other things:

“The competition must not exploit the participant. Work submitted including reproduction rights must remain the property of the participant unless purchased at professional rates independently of prizes and awards.”

and:

“The conditions of the competition and the names of those responsible for adjudication must be clearly and unambiguously stated.”

Unfortunately, as the following recent case illustrates, a policy is only effective if it is followed.

A contest gone wrong: Rubio v. Barnes & Noble

Diana Rubio was an undergraduate student at Fashion Institute of Technology (“F.I.T.”). In the fall of 2010 Ms. Rubio took a class in accessory drawing. One of the assignments, counting for 30% of her grade, was to design an item and create an original drawing depicting the design. F.I.T. had adopted the NASAD competition guidelines.

Ms. Rubio’s teacher announced that each student’s drawing would be entered in a contest sponsored by Barnes & Noble, as part of a “Back-To-Campus” collaboration with F.I.T. Although participation in this contest was mandatory, the students were not given any details of the contest. Ms. Rubio submitted a drawing of her unique backpack design which she called “The Everything Backpack.” In early 2011, F.I.T. told her that she had won the contest, and in May 2011, Barnes & Noble sent Rubio a letter which congratulating her on winning the contest. The letter said backpacks based on her design would be sold throughout the country, representing F.I.T., as part of its 2011 “Back-To-Campus Design by Students for Students” collection.

Ms. Rubio asked F.I.T. to explain the details, including whether she would be compensated for use of her design. She did not receive an answer until September 2011, when the chairman of FIT’s Accessories Design Department sent Ms. Rubio an email asking her to sign a “consent form.” The “consent form” was actually a contract requiring Rubio to assign to Barnes & Noble all of her rights in her design, along with rights to use Rubio’s name to market the backpacks, for no monetary compensation. Ms. Rubio did not sign the form.

Barnes & Noble nevertheless went ahead and made the backpacks. They were sold for $39.95 with a hangtag that read “This canvas backpack is designed by F.I.T. student, Diana Rubio, exclusively for Barnes & Noble!” The backpacks were quite popular, receiving 4.5 out of 5 stars from consumers.

Ms. Rubio hired attorneys, but their attempts to negotiate a reasonable licensing fee with Barnes & Noble were rebuffed. So they filed a lawsuit. The suit claimed unauthorized copying of Ms. Rubio’s drawing (copyright infringement), production and sales of the backpacks based on her drawing (copyright infringement by producing “derivative works” based on her drawing), and use of her name to sell them (violation of her rights of publicity). In the complaint, the lawyers pointed out that F.I.T. had required participation in the competition despite the fact that it did not comply with F.I.T.’s competition guidelines and the students were not told the rules of the contest. Nevertheless, the New York court dismissed most of Ms. Rubio’s claims.

How to protect your rights

What went wrong, and what can we learn from this case?

First, Ms. Rubio’s rights of publicity claims — for using her name to promote sales of the backpack — were thrown out on a technicality, because they were filed too late. The lesson here is: consult with a a lawyer as soon as you have a problem. There may be a statute of limitations that will bar your claim if you wait too long. Although the court did not reach the merits of her rights of publicity claim, I think that claim would have been successful if it had been timely filed. It is against the laws of most states for a company to use your name or likeness to support sales of commercial products without your permission. Since Ms. Rubio was never told that the contest rules meant Barnes & Noble could use her name, I think there is a very good argument that she did not give such permission.

Second, Ms. Rubio’s claims for copyright infringement based on production of the backpacks she designed were unsuccessful, because copyright law did not apply. One of the basic limitations of copyright is called the doctrine of “conceptual separability.” In the U.S., copyright does not protect the three-dimensional shape of useful articles, like furniture or backpacks or clothing. If there are decorative or artistic aspects of a useful article, those elements might be protected, but only if they are “conceptually separate” from the functionality of the article. For example, in the landmark case that established this doctrine, a lamp base that was a sculpted figurine was protected by copyright even though it functioned as a lamp base, because it could be independently perceived as a figurative sculpture. Under this doctrine, two-dimensional drawings of objects are protected by copyright, but most three-dimensional industrial design itself, even award-winning critically acclaimed designs, cannot be copyrighted. Only superficial ornamental art, like carvings on the back of a chair or fabric patterns, are protected.

So, the court ruled that even though the Barnes & Noble backpacks were copied from Ms. Rubio’s drawings, because they are useful articles with no separate ornamental features, the were not infringements of her copyright. That left only a claim that unauthorized copies of the drawings, in the form of other two-dimensional drawings or photocopies, were made in the course of making the bags. The remedy for that kind of copying would be limited to a licensing fee for making two-dimensional copies, which naturally would be very small. The court’s ruling means that Ms. Rubio is not legally entitled to collect any royalties on sales of the backpacks.

There are several lessons from the failure of Ms. Rubio’s copyright claims. First, it is important to understand that not all kinds of “copying” are illegal. U.S. intellectual property laws are set up with two competing goals. One is to protect creative works of expression against unauthorized copying; but the other is to promote the free sharing of ideas and inventions. This second goal is why inventions can only be protected against copying if you get a patent, and why patents only last a limited period of time. It is also why “useful articles” such as industrial designs are not protected by copyright. To protect her backpack design against unauthorized copying, Ms. Rubio would have had to obtain a design patent.

There are other kinds of designs that copyright does not protect. Most importantly for designers, these include “common shapes,” letter forms, and common layouts. This means that, for example, many logo designs that involve only type, or that use only common shapes such as circles or squares, will not qualify for copyright protection. Although copyright does protect graphic design as “compilation authorship” (the selection and arrangement of elements such as text and images), some publication and website designs will be considered too commonplace to qualify. Courts have recently determined, for example, that websites based on a simple grid design were not copyrightable.

How do you protect your work against unauthorized copying if it doesn’t qualify for copyright? In the context of contests, the solution is contract law. Contracts are private agreements under which the parties agree to exchange something of value, called “consideration.” Contracts are legally enforceable if both parties have agreed to and understand the basic terms of the agreement, and there is valid consideration. This is why a client who has contracted for a designer’s services must pay for the work even if it isn’t protected by copyright: in the contract, the client is paying for the designer’s professional design services. In design contracts, the designer’s consideration is usually money for services, but it can also be described as recognition or exposure for the designer. Contracts can be written, oral, or even just implied. You do not have to have a written agreement for a court to decide that there is an enforceable contract (however, it can be very difficult to prove what the terms of an oral contract were).

Most design contests will have written contest rules. Somewhere in those rules there will be terms that say what the contest can do with your entry, and what you will receive if you win. Most contest rules will say that the contest will own copyright in your submission, sometimes even if you don’t win. All of them will say at least that you are giving the contest permission to use your submission. If there is any monetary consideration, the rules will say so. Most often, the rules will say explicitly that there is no monetary prize, but you may get recognition, and/or copies of the published version of your submission. You will be agreeing to these rules simply by having seen them, or having the opportunity to see them (for example, if you are submitting submissions through a website and the rules are posted on that site), even if you don’t actually read them.

If there are no explicit rules, a court will probably decide that when you voluntarily submitted your entry, there was an implied contract to give the contest permission to use your submission in the way that the contest promotions say it will be used — for no compensation, or even “recognition” or “exposure” — unless the contest promotion explicitly promised such consideration.

Ms. Rubio’s situation was unusual, because she did not visit a contest site or see any contest rules. She did not voluntarily enter the contest, and she refused to sign the consent form when it was belatedly presented to her, so there was no contract. Nevertheless, she lost on the copying claim because her backpack design was a useful article that copyright does not protect. Thus, even without a contract, Barnes & Noble was legally allowed to copy it.

To avoid Ms. Rubio’s situation, it is important to make sure that your design is protected by an enforceable contract. If you are a student and your school asks you to participate in a contest, request a copy of the written contest rules. Check with your school to make sure it honors the NASAD guidelines, and that the contest meets those guidelines. If not, get your fellow students involved and negotiate with the school to ensure that your rights to your designs will be protected.

As a professional, you also need to check the contest rules. Even if you are submitting something that copyright law does not protect (like a product design or a typographical logo), the law will enforce contract terms that limit how the other party can use your submission. Your contract can say, for example, that the contest cannot copy your design unless it pays you consideration. If there are explicit contest rules, it may be difficult to change them. But if not, the law will recognize an implied contract if you make it clear that your design is being submitted with the expectation that you will be paid if it is used. The most common way to do this is to include a cover letter that says something like this:

“This design entry is submitted on condition that if you wish to use any of the ideas, designs or expressions submitted, you will negotiate with me in good faith for a license including appropriate compensation and accreditation.”

Contract laws in various states differ, so you should consult with an intellectual property lawyer in your state to draft the best language for your particular cover letter.

Many of these lessons are applicable beyond contests. Any kind of spec work should be done under an explicit written contract. If you don’t like the terms offered by the client, negotiate for changes. If the spec work is solicited with no clear terms, write your own cover letter making it clear that your submission is subject to your own terms. And generally, think about whether the consideration being offered in exchange for your work is worthwhile, both to you, and to the design profession. At a minimum, you should get credit for the work on published versions, and you should have clear rights to show it in your portfolio and enter it in design contests. If the spec work is for a corporation that could and should pay for design services, please consider whether doing it will perpetuate expectations that commercial design services should be cheap or free, and if it is really in your best interests to participate.

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Legalities is a service mark of Linda Joy Kattwinkel. © 2015 Linda Joy Kattwinkel. All Rights Reserved. The information in this article 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 Kattwinkel is an attorney, painter and former graphic artist/illustrator. She practices intellectual property law, arts law and mediation for artists with the firm Owen, Wickersham and Erickson in San Francisco. She can be reached at 415-882-3200 or ljk@owe.com.