Beyond Server-Based Licensing...

oldnick's picture

I was recently approached by a large online custom imprint firm about licensing some of my fonts for their operation. Initially, it appeared that this request would be handled as a simple server-based license but, when I received the final draft of the proposed licensing agreement, a paragraph on “Distribution” was added. Evidently, this operation has plans (how imminent is not clear) to expand beyond the virtual world to storefront operations, where customers can prepare artwork for imprinting on location, or for taking to outside printers, wherein lies the rub.

As the Distribution paragraph is now written, customers taking their files elsewhere would be supplied with copies of the fonts used in the project, which opens a completely different can of worms. If they were supplying their customers with print-ready PDFs, or with other type document with the font outlines converted to EPS or SVG, I could see this end use as an extension of the server-based licensing; however…

In an ideal world, both server-based and point-of-sale retail usage of fonts—essentially one-time outline rentals—would be metered, then paid for periodically on a per-use basis. But, until someone comes up with a way to do that, I have to decide if I want to sign on to this deal and, if so, what to ask as compensation. Any thoughts?

blank's picture

If they want to distribute the fonts to their customers they should either buy the rights to the fonts or commission new designs on a work-for-hire basis.

blank's picture

Then again…

Now that I think about it I’m not sure this is really such a big deal. Designers who don’t buy printing for clients commonly dump all the files in a design, including the fonts, to disc and and it over to their client who then passes it along to a printer. And most font EULAs allow this sort of thing in their clause allowing fonts to be used by service bureaus. This seems to be a similar situation; in this case the clients are probably not people who are likely to have a motivation to scoop the fonts off the disc and do anything with them. Maybe you should just allow it provided that each font comes with a readme file noting that the fonts are only licensed for printing that particular design and a new license must be purchased for other uses.

oldnick's picture

Maybe you should just allow it provided that each font comes with a readme file noting that the fonts are only licensed for printing that particular design and a new license must be purchased for other uses.

Whether or not the client knows that they have "free" font files in their job file depends on how savvy the client is; the folks at service bureaus and print shops, however, are very aware. In an ideal world, every print shop would have an IP Compliance Officer, and that would work. However, in the real world, what usually happens is this:

  1. A client's job comes in. The job is inspected, and accompanying font files are installed on the server.
  2. The job is proofed, revised if necessary, and then goes to film or direct to plate.
  3. After the job is delivered, nobody bothers to delete the font files from the server, and the print shop design staff suddenly has more fonts at its disposal.

The worst-case scenario would be a very savvy user who brings his or her own flash drive into the POS design station, which he or she claims has project artwork on it. Once the flash drive is connected, he or she navigates to the Fonts folder and transfers the whole kit and kaboodle to the flash drive...

Diner's picture

To solve this problem, you have to change your way of thinking about traditional licensing methods . . .

The future of font licensing is cloud based which means, the font lives here nor there . . . No longer can we associate licensing with a fixed number of desktops or output devices but rather the specific number of end users and when the total number of users is no longer an appropriate variable, the fallback is uses or more specifically individual uses . . .

I define these as 'impressions' and for the last 4 years have become an advocate for this manner of font licensing . . .

Consider this as 'microstock' licensing but for fonts . . . Each time the font is used where it generates value for the item being purchased, a small fee is payable to the foundry.

Whether the font resides on a server or the outlines are embedded in a software file that is re-distributed, you have to determine what fee gives you the piece of mind that you're not losing a sale . . .

Also remember all agreements are negotiable and you have the option to strike or modify any portion that you find unpalatable . . .

FYI, we have several of these licenses already in place and they continue to make income for the foundries we represent at Font Bros . . .

Stuart :D

oldnick's picture

I have an OEM agreement with one software firm that pays me royalties on sales on a quarterly basis; however, the agreement I'm looking at doesn't provide for periodic payments. As it's currently drafted, the licensing fee would be a one-time deal, the term would be in perpetuity, and the grant would extend to all media currently available or any which might be devised in the future...

Diner's picture

The money would have to be really good for you to accept terms of this nature . . .

Generally speaking this is too far reaching and could create a situation where you'd be competing with yourself in the future if they ever decided to resell or give away the fonts in a different format . . .

Many folks who've been around the block on this would simply encourage you to build them a custom one-off they can purchase outright since they could lord over the details of what they wanted to do with it and you'd have your cash and clean hands of the deal . . .

Ultimately you have to decide from a business perspective if its a fair deal for all parties but know it could certainly hamper your ability to negotiate future licenses of the same scale if this group comes back for another sweetheart deal for them of a company they own/run . . .

Stuart :D

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