Calculate Design License Fee

Design Quote: This is the number you calculate for estimating the cost of providing design services to your Client using our design cost calculator, or it could also be any number you calculate yourself by your own experience or based on past work. If you do not know this number, use the Design Cost Calculator and afterwards use the Design Quote Calculator. The fee you enter to this section should already include your markup as well as it should account for other factors that could effect the pricing. To the box, enter only a number, all further calculations for licensing fees will be based on this initial amount.

Exclusive Usage / Exclusive Production : Normally, the Client should have exclusive rights on design in order to have a competitive advantage by offering a unique product, when Client offers a unique design, the Client is able to charge a premium by pricing the work higher since the content or design is not available by another supplier or provider and since the customer has no choice but to buy from the Client if she really likes the design. Therefore, when you sell your design to multiple Clients, you are reducing the bargaining power of the Client, by removing Client's monopoly over the design, this becomes more obvious when in same country or region, two competing Clients offer the same product or products that integrate your design, which decreases sales price and profits. Given these insights, if you sell the same design to multiple Clients, you need to reduce fees, and you need to reduce fees even further if you sell the same design within the same region to multiple clients. Choose option Exclusive if the design is only sold to one (1) Client for exclusive usage. Choose option Limited if the design can be sold to one (1) Client per County, but no more than one (1) in a single country. Choose option Multiple if the design can be Sold to Multiple Clients per Country. Default option is Exclusive.

Geographic Scope of Sales of Product : When you license an intellectual property or design, you have the possibility to limit the distribution of the end products, the design or the usage of intellectual property within specific geographic regions, as you would indicate in your contract for design. You can ask much more money for your design if you let the Client to use the design internationally, this is because when Client sells internationally, the market is bigger. However if the Client says he would not sell internationally, since perhaps because it is a smaller Client or it is a smaller project, you could ask less money than he would ask internationally, furthermore this could also allow you to sell the same design to Multiple Clients in different countries or continents, depending on your contract. Finally, if the Client is quite small, and if the product or design would be used regionally, then you perhaps do not need to ask money for higher circulation of the product, since the product would be circulated in a small geographic zone. Choose option Regional, if the geographic scope is a city or a small area. Choose option National, if the geographic scope is a Country. Choose option Continental, if the geographic scope is a Continent. Choose option Zone, if the geographic scope is a Group of Countries or an Economic Zone. Choose option International, if the geographic scope is Worldwide. Default option is National.

Duration of Agreement : The duration of the agreement is about how long the Client could use your intellectual property or design, and the lesser the Client is permitted to use it, the earlier you can resell, release or relicense the design to new and further clients, and for this reason if the Client wishes to use the design for a short period of time, there is no need to ask for any extras, and if the Client wishes to use the design for an extended period of time, the Client is locking the design, thus you could ask extra compensation for extended usage. Some clients would prefer to lock the design indefinitely, or for the maximum available duration, in this case you ask quite a lot of money as the Client is almost owning the product technically, and the Client almost buyouts the product if the Client who locks the design perpetually is also the sole licensee. Choose option Short Term if the duration is less than a year. Choose option Varied, if there is a specific number of years indicated by the client and change the modifier to the number of years requested. For example for twelve (12) years, choose option Varied first and then set the modifier as 12. Choose option Infinite, if the duration would be perpetual or maximum legal duration possible. Default is five (5) years.

Reach and Visibility, Advertising of Product : The idea behind requesting additional fees based on impressions is based on the idea that if Client is going to make a very large advertising for this product, then the Client could as well pay a higher design fee, and if Client is not able to make a very big advertising, perhaps there is no need to ask an extra over the fees also the more people see the design, the less the resale value of the project. You might decide to not charge the Client extra even for the highest advertisement, only if for example the Client is going to advertise your name dominantly, however for famous designers, doing so benefits the Client more, since the Client would wish to tap into the brand value of the designer, and this might not be relevant for famous designers or celebrities, but useful for smaller design offices who wish to let the client advertise on behalf of them. Regardless, the idea is simple, if Client has more marketing budget, they might as well pay more for the design. Impression means number of times the design is seen on any medium, it is the number of displays, remember that same person could potentially see the same design many times, thus the number of potential impressions are almost infinite and can be more than the population of the world. Choose option Nano for up to 500.000 Impressions, Choose option Micro for up to 5.000.000 Impressions, Choose option Regular for up to 50.000.000 Impressions, Choose option Big for up to 500.000.000 Impressions, Choose option Grand for up to 5.000.000.000 Impressions, Choose option Universal for up to 50.000.000.000 or unlimited number of Impressions as you would highlight in your design contract. Default option is Nano.

Transfer of Intellectual Property Rights : This section is about whether the Client could transfer his rights to third parties or not, of course the asset which could not be transferred to others loses value, and the asset is more valuable if it is more liquid, a liquid asset means it is easier to transfer or sell, thus if Client wishes to be able to sell the asset to others, the Client should pay you a good compensation and you could increase the fee slightly and if the Client is not able to transfer rights of design usage, then the fee should naturally be slightly lower then usual. Choose option Not Possible if the Client cannot transfer intellectual property rights to others. Choose option Conditional if the Client can transfer or lease intellectual property rights to others only if the company is acquired by another company. Choose option Focused if the Client can transfer or lease intellectual property rights to a single 3rd party. Choose option Wide if the Client can transfer or lease intellectual property rights to multiple 3rd parties with reselling possible. The default option is Conditional.

Derivative Works : Sometimes you could create a good product, and the Client might want to turn it into a product family with many similar looking, complementary products or designs. When this happens, normally the Client is supposed to ask you to design the additional products or designs, however it could be possible that the Client might also wish to use some other designer or their in-house design team to develop the new products, so if the Client would only be able to ask you for derivative works, the fee should be as is without any extras, but if you give the Client the opportunity to develop derivative or similar products based on your original design, the client should pay extra, since in this case you lose future business opportunity but of course this opportunity might never come in the first place, so this is hypothetical, you could ask any arbitrary number based on your perception how many designs would the Client develop new products for. Choose option Possible if the Client can create derivative works based on your design. Choose option Not Permitted if the Client cannot create derivative works, and must ask the original designer (that being you) for any derivative works. Default option is Not Permitted.

Duplicates, Reproduction or Reprints : This is for art works mostly, as well as architectural projects where the production or the number of times your design is realized should normally be one or a single unit, and the additional fees for this category should not apply to industrial designs or mass products which are expected to be produced or duplicated in millions. However, sometimes the initial contract might indicate that the Client would already be producing X units of the design, then in this case, there is no need to request additional additional fees (you should already choose your pricing and request a single additional fee in your contract based on the fact that the Client is going to produce additional units), likewise if the Client would not produce extra copies in any case, there is absolutely no need to augment the price for this section. Choose option Unlimited if the Client permitted to reproduce an unlimited number of copies of the work. Choose option Possible if the Client permitted to reproduce additional number of copies of the work later based on a pre-agreed amount. Choose option Not Permitted if the Client is not permitted to reproduce extra copies than indicated in the design contract. Default option is Not Permitted.

The number you see on the left is the amount you would ask based on licensing fees calculation. Licensing fees are sometimes paid all in advance and sometimes divided into multiple installations, for example paid within two (2), three (3), four (4) or five (5) years. In most cases, the license paid is paid within three (3) years, but longer installments could sometimes be possible. Just to remind you that the Licensing option is usually good for communication design projects, while for others such as spatial design or industrial design, licensing fees might not always be the correct decision. Consult an expert if you have further questions about the subject. World Design Consortium can help Clients to make licensing based contracts with Designers. Design Mediators can help Designers to make license fee based contracts with Clients.