Overview: ADOBE SYSTEMS, INC.--Digital Art Show Adobe Systems, Inc., is well known for the various page layout and illustration programs they make. When Adobe wanted to license some artwork for use in its Digital Art Show (a collection of images distributed with Adobe Illustrator; see Interview), they sent the artist a contract that was, for the most part, clear and straightforward. However, a few of the terms of the contract failed to adequately protect the artist's rights. These are highlighted below, along with the changes made by the artist.

Contract Highlights:

=> GRANT OF LICENSE

The original contract stated: "Originator hereby grants to Adobe, a non-exclusive, worldwide, royalty-free and perpetual license to display, modify, reproduce, distribute, and use the Licensed Digital Files in whole or in part on or in conjunction with the Illustrator Product and the non- exclusive, world-wide right to sublicense others in its normal distribution channels to do any and all of the foregoing. Originator also hereby grants to Adobe a non-exclusive, worldwide royalty-free, perpetual license to display, modify, reproduce, distribute and use the Licensed Digital Files electronically or in printed material, including, but not limited to, in advertising and packaging.

The artist made these changes: First, the artist deleted the word "perpetual", replacing it with "limited". This helps to insure that the artwork will be used by Adobe only for the stated purpose.

Next, the artist did not want to allow uncontrolled modifications to the artwork, so the phrase in parentheses was added: "modify (provided all modifications are for the purpose of revising the form of the Licensed Digital Files and not their content)"

Finally, the artist did not want Adobe to have the right to use the licensed artwork in advertising or packaging, believing that advertising art should command the payment of a fee. (Remember that Adobe was not paying for the right to use this artwork.) The last sentence of the clause, which would have given Adobe advertising rights, was deleted.

Here's the final wording of the clause, as agreed to by both parties: "Originator hereby grants to Adobe a non-exclusive, worldwide, royalty-free and limited license to display, reproduce, distribute, modify (provided all modifications are for the purpose of revising the form of the Licensed Digital Files and not their content) and use (all or some of) the Licensed Digital Files in whole or in part in the "Digital Art Show" in the Illustrator Product. Originator also grants to Adobe the non-exclusive, world-wide, limited right to sublicense others in its normal distribution channels to do any and all of the foregoing.

=> WARRANTY

The original contract stated: "Originator hereby represents and warrants with respect to the Licensed Digital Files that... (c) the Licensed Digital Files do not contain any matter that does or will infringe, violate, or invade any right to privacy or publicity, copyright, trademark, patent or other right of any person or that is defamatory, and (d) the Licensed Digital Files do not contain any electronic virus or other information that will affect or alter the execution of the Illustrator Product or the program or files of users of the Illustrator Product."

What concerned the artist was the lack of any limitation on the warranty. He wanted the warranty to state that he would make his best effort to guarantee that no one would be harmed by his work, but also that he could only guarantee the work insofar as it was within his control. To do this, the artist added the phrase "to the best of the Originator's knowledge" to the beginning of the two final parts of this clause. The artist is still committed to making an effort to provide work that doesn't cause any harm, but only up to the point that it is in his power to do so.

=> Here's the final wording of the clause, as agreed to by both parties: "Originator hereby represents and warrants with respect to the Licensed Digital Files that... (c) the Licensed Digital Files do not contain any matter that does or will infringe the copyright of any third party, (d) to the best of the Originator's knowledge the Licensed Digital Files do not contain any matter that does or will infringe, violate, or invade any right to privacy or publicity, trademark, patent or other right of any person or that is defamatory, and (e) to the best of Originator's knowledge the Licensed Digital Files do not contain any electronic virus or other information that will affect or alter the execution of the Illustrator Product or the program or files of users of the Illustrator Product."

UNCHANGED PARTS OF THE CONTRACT

Two other clauses in the original contract, neither of which were changed, are worth looking at.

The first is one that ought to be included in every artist's contract: "NO ASSERTION OF RIGHTS It is expressly understood and agreed that, except for the licenses granted Adobe under this Agreement, as between Originator and Adobe, all right, title, and interest in and to Licensed Digital Files vests solely and exclusively in Originator."

This important statement makes it clear that the rights licensed to Adobe are only the ones specified in the contract, and that the artist retains all other rights. You can think of this clause as your Bill of Rights. In fact, it's just like the final item in the real Bill of Rights! The Tenth Amendment to the Constitution of the United States (you remember that one, don't you?) states: "The powers not delegated to the United States by the Constitution or prohibited by it to the States, are reserved to the States respectively, or to the people." Good precedent!

The other clause is the one that the artist tried unsuccessfully to change, the Disclaimer clause referred to in the interview, above. The DISCLAIMER clause attempts to prevent the artist from ever recovering any damages from Adobe. It reads, in part: "Adobe shall not be liable to Originator...for any loss of revenue or profit...even if Adobe has been advised or had reason to know of the possibility of such damages. In no event shall Adobe be liable to Originator for any unauthorized or unintended use of the Licensed Digital Files by Adobe's end users or any third party."

The artist felt that if Adobe knew about, for example, an end user's misuse of the artist's work, and Adobe did nothing about it, Adobe should be liable for damages. According to the artist, Adobe felt that deleting this clause would open them up to unlimited liability for damages, in circumstances over which they had no control. As the artist explains in the Interview, he accepted Adobe's stand on this for two reasons.

First, the person he was negotiating with from Adobe was careful to fully explain why this clause mattered to Adobe.

Second, and more importantly, the artist felt that Adobe had engaged in honest and genuine negotiations, as evidenced by their concessions on other points.

Both Adobe and the artist worked hard to achieve several goals:

- to understand their own needs
- to understand the other party's needs
- to establish trust in each other
- to write a contract that worked for both parties.

It appears they succeeded.

Updated News: