OEM Licensing and What It Means to You: An Interview with Stuart Sandler of Font Bros.

When making and publishing your fonts, the last thing on your mind will be licensing rights. TypeThursday sat down with Stuart to discus what is OEM, licensing, and how you can best protect your hard work.

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TypeThursday: Stuart, it’s great to have you here at TypeThursday.

Stuart Sandler: Thanks for having me. It’s great to be here, Thomas.

TT: Awesome. So how about we start with your history? I know you’re a part of Font Bros, but I’m sure a lot of people would love to hear more about it.

SS: Absolutely. I actually started a website called Font Diner in 1996, which was my original foray into font design and marketing. As I gained more confidence with font licensing and learned more about the font business itself through those years. In 2004, I decided it was the right time to start a distributorship with my accumulated knowledge and so I brought in a good friend of mine and former coworker to cofound Font Bros with me. His name is Michael Ibach and together we run Font Bros and have been doing so since then.

TT: 2004. So it’s been how many years?

SS: 12 years.

OEM Licensing

TT: 12 years. Okay. So distribution and licensing I think is a big issue for a lot of type designers to even wrap their brain around. Specifically, I know you have expertise in OEM licensing. Could you start by telling us what is OEM?

SS: Sure. The technical definition of OEM is an acronym that means Original Equipment Manufacturer, which actually has nothing to do with font licensing whatsoever, but that’s where the term is taken from. While all font designers sell general desktop licenses, as a rule of thumb, anything beyond a desktop license is considered an OEM license. So a web font license is an OEM license. An app license is an OEM license. An e-book license is an OEM license. And so on.

TT: So OEM licensing is a catch-all term for anything that’s non-desktop?

SS: That’s correct. Distributors and foundries primarily sell desktop licenses and if we look back in recent history, we see there wasn’t a protocol to handle any licensing beyond desktop licenses online. However, with the popularity of web fonts in recent years, distributors followed our lead and began displaying and offering point-of-sale OEM licenses for web fonts, e-books, apps, etc. In addition to OEM licenses you can purchase online, Font Bros really specializes in handling the more complex licenses related to broadcast uses, national media campaigns, large volume packaging or marketing uses, and enterprise wide uses that require more back-and-forth discussions, negotiations and legal paperwork, but it all falls under the same OEM umbrella.

TT: Could you give me some examples of that? Specifically the more complex licenses? You mentioned broadcast.

SS: Absolutely. So I’ll back up just a little bit here to mention an anecdote that I think is appropriate.

TT: Please do.

SS: When I started selling my fonts via Font Diner, I was always very flattered to see them in use. And it was great to start to see these things in the public space. It wasn’t until the first time I saw my Font Diner fonts used in the opening credits for The Osbournes TV show on MTV that it occurred to me they were getting a lot more value from the fonts beyond what the desktop license allowed. It was important for me realize, “Wait a minute, at a certain point, the EULA has to kind of restrict some of these bigger uses that are creating additional value for the buyer of the license.” In fact, that thought exercise starts to force you as font creator to draw a line in the sand to determine what you’re comfortable with under a basic desktop EULA you offer your fonts under, and what uses you feel create more value to a customer that should cost more and require an additional licensing upgrade.

So to your point, here are a few examples where a font adds value beyond the basic license; If a font is used for a television commercial that’s broadcast internationally; if it’s used for a movie or a television program that’s streamed or broadcast domestically; if it’s used in an online system like a custom stationary or a custom design tool like Zazzle or CafePress; if it’s used in a mobile device application; if it’s used in a browser-based game on Facebook; in Steam or a desktop-based game or whenever the font starts to add additional value. When you think about it, any developer or designer is selecting a font as a tool. And their hope is that the right fonts improve the aesthetic or increase the value of the item that they’re developing. So as flattering as it is to have a font used for those purposes, a font designer must look at it more pragmatically and say, “At what point is the use of this font beyond what I’m OK with for the price it was sold at?”

TT: Have you had an experience where there’s pushback or any particular issues about communicating that with designers that you might want to share with us?

Managing Licensing Terms with Clients

SS: Absolutely. Generally speaking, most designers that work for larger agencies or design firms usually understand that font licensing is important. They don’t just click the EULA checkbox to buy the font and off they go. They know it’s important to understand the font policies internally and will usually receive direction from their organization on the correct process to purchase and use fonts for their projects or department. It’s the cases where a designer will sort of plead ignorance and say, “We found this for free on the internet, so I assume I can do whatever I want to with it.” Maybe the Read Me wasn’t attached from a previous download or it was a font on their system prior to their employment. You’d be surprised to learn the frequency with which we come across this scenario is actually quite high.

TT: Could you explain that?

SS: Yeah. So a perfect example of this is that we have a single EULA that defines the uses for every font that we sell at the Font Bros site, which actually helps us to be able to negotiate from the same position every time we’re working with a client who needs licensing.

TT: As a distributor you might have to deal with type designers with different EULAs. I know you guys streamlined it, but I could imagine a situation where you might have to work with individual designers’ contract that has different terms behind them.

SS: That’s correct.

TT: All right. Cool. Sorry to interrupt. I just figured that’s an important point.

Considerations When Drafting An EULA

SS: It is important, but that’s also part of us being a good partner to our font creators and educating them about why our EULA is drafted the way that it is. And to advise them to look at all the EULAs they are selling their fonts under to assure they’re using the same EULA everywhere that they’re distributing their fonts? And that’s important because you could have a very strong EULA through Font Bros, and you could have a weaker EULA through another distributor or just use their default provided EULA and not realize that your terms aren’t consistent across all of your distributors.

That actually creates situations where we’ve been approached by large firms that want to secure the correct font license, we start the negotiation process, and they find that the foundry has sort of exposed itself with a much more generous EULA for the same font at a different distributor and they get the same benefits of the font but at just a desktop license fee and they lose literally thousands of dollars. So it’s very important for font designers to understand the consistency of their EULA, what they’re limiting, what they’re granting among all distributors and if they’re selling the font at their own site that they’re respecting the same terms and conditions everywhere the font is sold.

TT: So consistency of the EULA is actually a good point of consideration. Is there any other points of consideration designers should think about?

SS: With regard to distribution as a font creator, it’s always important to protect and police your fonts. And, it’s important when you find an infringing use of your fonts to pursue it. In the font industry, font designers are generally very — They’re great people. They’re honest people. They like to be nice guys. And so sometimes they’ll write a very generous EULA or if they discover an infringing use they’ll try to write kind letters in an effort to fix an infringement, “Hey, would you mind taking this off your site?”

But over the course of their career, they can run into infringements that are so blatant and so overreaching that they really have no choice but to reach out to a legal professional and say, “Hey, I can’t get this person to either pay me the value of this license or I can’t get this person to remove the font.” Maybe they’ve embedded it in an application that’s being distributed millions and millions of times over and over again and the license may restrict that use but they’re in a place where they can’t really resolve the matter on their own. So you do have to pursue some of these things legally to make sure that they get handled so that it’s not an ongoing infringement. Also, turning a blind-eye and allowing these infringing uses after discovering them means you’re effectively granting this use which you’ll be seen as being complicit in a court of law and it sets a precedent which will be hard to overcome if the matter ever came in front of a judge or jury.

TT: Why is it important to enforce your EULAs?

When you actually step up and protect your own work, all the sudden you actually get more licensing requests.

SS: When you actually step up and protect your own work, all the sudden you actually get more licensing requests. Because people know that you’re serious about the license that you’re distributing your fonts under, they’ll come to realize that this is a foundry that protects its work. And so they’re going to come to you first rather than get caught by you at some point in the future.

I’ve had a couple of different situations, one more recently, where there were some fonts used on packaging for a giant food conglomerate that had produced millions and millions of these products. But it just sort of randomly came to my attention and through a little bit of research and I determined that there was a clear and significant infringement. Fortunately, in that case, I was able to connect with organization and resolve that before we had to pursue it legally, but they already knew they hadn’t secured the licensing. And in fact, for some organizations, the business practice is to only purchase a desktop license, use it as they wish and wait to get caught. Me saying that might sound provocative, but it happens all the time.

Once you release a font, they’re out there for a very, very long time. And so it’s important to be able to make sure that all your ducks are in order pre-release, so that when you’re five years down the road and you see an infringing use, you pretty much know exactly what EULA was in place at the time it was purchased and where there might have been different EULAs previously. There’s a lot of ways to kind of track those things down and keep track of them, so that as time moves forward and licensing requests come in, and different infringing uses are discovered, you know exactly if it can be pursued. To continue this work will maintain the fonts value over its lifetime. A foundry will generally sell most of its desktop font licenses witihin the first two years of its release and then randomly throughout the following years, but a big OEM license inquiry may only first happen ten years down the road and it’s important to know what license the font was purchased under in order to determine what license upgrade they require.

TT: So consistency in your EULA, for the long term investment, is important. Is there another point designers should be aware of?

SS: Fonts are not protected as designs. But font software is protected as a series of 1s and 0s in a particular order. So another way to think about it is if you took the postscript output of a font, that data can be protected as if it were a literary work in the United States. Source code can be protected in the same way as a novel can be protected.

Having a copyright to your font says I’m the person who created this source code. So it assigns an author to that source code and it makes it much easier to send a DCMA (Digital Millennium Copyright Act of 2001) takedown notice to someone when you’ve identified an infringing use to prove you’re the legal owner of the font.

Lastly, as a font seller, you’re entering an agreement with a buyer. You’re mutually agreeing how this software you created and protected will be used. So, whether that’s happening via your own site or a through a distributor for a desktop license purchase, or whether that happens as an OEM license or a much deeper, broader license later on, ultimately, that’s really what the business of font licensing is, actively managing the relationship that you have with a buyer through mutually accepted agreements.

That last point is really important because if a clear understanding isn’t reached, trouble can happen. If reach out to someone and say, “Hey, you’re using a font in a way I don’t want you to” you end up creating a situation where the person says, “Who are you? How do I know you’re you?” It’s actually quite frustrating. Especially if you’re writing to a small Etsy seller and say, “Hey, stop making personalized goods with my fonts.” They say, “Well, how do I know you’re the person who owns the font?” Well, because here’s my US copyright on the source code. Here is a DCMA letter. This proves everything you need to know and proves your claim. If an Etsy store owner can’t respect these things, it’s easy enough to talk to the people at Etsy, who are very good about remove infringing products from my experience.

TT: That’s amazing, Stuart. That’s a really great thing to share. I think that’s going to be really useful for people in the type world to understand that point. Thank you so much for being here, Stuart. I think this has been a great conversation.

SS: Thank you for having me.