Some guy e-mailed me about how he downloaded one of my images from Dreamstime (regular license), to use on packaging for the electronic devices he sells (notebooks, epads). The regular DT license allows up to 500.000 copies, but not use for redistribution. See excerpt below from the Dreamstime Terms of Use:

"What Royalty-Free means is that you pay for the image only once and then you can use it as many times as you like, with just a few restrictions. In other words, there are no license fees except the initial fee and no other royalties to be paid except those included in the initial cost. Note that the maximum number of copies for printed materials is 500,000 copies.
(...) Web templates, greeting cards or postcards especially designed for sale, similar print-on-demand services, canvas, t-shirts, mugs, calendars, postcards, mouse pads or any other items incorporating the image in an essential manner, intended to be sold are considered redistribution (if the image is used in an essential manner). "

My question is, does 'use for packaging' means he needs an extended license, or is it sufficient for him to have a regular license?

Secondly, he wants to trademark this image for his business. He slightly altered the image (which is allowed). He says he doesn't require exclusivity (so I don't have to remove the image). I thought Dreamstime does not allow image use as a logo (at least not without selling the rights). So is it even legally possible for him to use an altered version of my image as a logo?

Please let me know what you think of it, and what YOU would do (or charge him) if you were me.

I agree that packaging is not the same as selling postcards - the primary content of what's being sold is the contents of the package - and so doesn't require an extended license. If he's going over 500K he'll need one for the print run though.

I don't see how he can get a trademark for your image - even altered slightly - in his logo without getting exclusive rights. It's possible he just doesn't understand what a trademark will require. So even if you do a deal with him, the image will have to come down from everywhere else and if it's already been sold, he would have problems (because other licensees of your image could continue to use the image). Perhaps you can do a deal on a unique image that's in the same series as the one he's planning to buy? But if he's looking for a logo for $10, then you should probably just say "no" and avoid wasting more time with someone who's not interested in paying

I can't see how someone would want to trademark an image that is not exclusive.

... and that he does not hold the rights to.

E-mail from Dreamstime:

"Hello ****,

The regular RF license allows use on product packaging in a non-essential manner.
i.e. a picture of a cat used for a cat food package
The SR-EL is always required if the image is used in a logo.
If he is going to use all or part of the image in a logo he will need to buy the full rights whether he wants exclusivity or not.
You can tell him to send an email through the Dreamstime site if he has other questions about usage.
Please let us know if you need any further assistance.

Kind regards"

Now, I don't really understand why someone MUST have full rights if he doesn't want an exclusive logo. He won't agree on my price for the full rights, so would it be okay to sell him a non-exclusive logo license?

Let him do the work and find out.
Ask him for a description of the usage and the rights he wants to buy, + let him make a proposal.

He now understands the need for the full rights, and I suggested a good price deal for him. He asked me if I would consider a royalty on each sale instead of a fixed price. I think I gotta steer clear of this one. It sounds to me like he isn't willing to spend some money on it.

That's dodgy: how would you know he was telling you his true sales. If you had designed a product, a royalty could be a good way to proceed, but not for a logo.
Does he actually want an actual logo? I've seen sometimes on iStock where someone has said that one of their images is being used as a logo, and other people have said, no, that's not a logo (even though to all appearances it is being used as a logo).
I usually find that these people don't come up with the goods in the end. It might be worth just saying, no, that's my price, take it or leave it. Once you start haggling, he'll keep trying to drag the price down further.

Quote from: Noedelhap on May 10, 2012, 09:46

He now understands the need for the full rights, and I suggested a good price deal for him. He asked me if I would consider a royalty on each sale instead of a fixed price. I think I gotta steer clear of this one. It sounds to me like he isn't willing to spend some money on it.

That's dodgy: how would you know he was telling you his true sales. If you had designed a product, a royalty could be a good way to proceed, but not for a logo.
Does he actually want an actual logo? I've seen sometimes on iStock where someone has said that one of their images is being used as a logo, and other people have said, no, that's not a logo (even though to all appearances it is being used as a logo).
I usually find that these people don't come up with the goods in the end. It might be worth just saying, no, that's my price, take it or leave it. Once you start haggling, he'll keep trying to drag the price down further.

Exactly, I have no idea how much he sells, therefore I would have no idea how much money I could make. I think he's an honest guy (after all, he e-mailed me asking whether he could use it), but the whole process of royalty-based payment is unnecessarily complicated and non-transparent.
 
It's an image of a cartoon head, so it's more of a mascot than a logo. Still, it's an image to enhance his company identity, so I'm going to treat it as a logo. 

Quote from: Noedelhap on May 10, 2012, 09:46

He now understands the need for the full rights, and I suggested a good price deal for him. He asked me if I would consider a royalty on each sale instead of a fixed price. I think I gotta steer clear of this one. It sounds to me like he isn't willing to spend some money on it.

Ahh, he is one of THOSE customers.

Simple thing: If he doesn't meet your price you initially quoted then forget about him.

Some people simply don't have the cash for the image they want, then they will have to settle for something else.

I've "lost" many customers that way (although I could have negotiated my way down...) but there are still plenty of people/companies out there that pay your price without acting up.
Those are the people you want to deal with.

Yeah, I'll offer him the option of paying in instalments, maybe he agrees on that. If he doesn't, too bad.