Before I begin I should probably point out that I’m not a lawyer, nor do I play one on the tee vee. Thus, my legal advice, and whatever opinions I offer, are worth exactly what you paid for them. Nada. Having said that, I’m of the opinion that logo design contests, not the cute effort where the local church asks the kiddies to design some artwork for the Sunday picnic, but these logo design contest sites popping up everywhere on the web, are skirting very close to the law, if not breaking it altogether. At least from what I understand about contest law and my admittedly limited experience with it. The design risks of these contests has been done to death. Any designer worth their salt knows that they’re bad for business. The opinion of the design community is well documented. But what if these sites are breaking a ton of laws, in jurisdictions all over the world, as well as running afoul of state and national lottery and gaming laws? A little far-fetched? I thought so at first, but after fairly intensive research, I’m beginning to think otherwise.
Should probably start with a little history as to that research got started and why I’d pursue this seemingly absurd line of thought. Was talking with a colleague this afternoon, and we were reminiscing about design gigs from days gone by. In one of those previous incarnations, I was a magazine art director and was often tasked to come up with new and zany ways to publicize our humble publication. One such promotion was a ‘Holiday in Maui’ contest – a four month marketing blitz during which we’d give away posters, T-shirts and magazine subscriptions culminating in the grand prize, a two week cruise and vacation in Hawaii, thrown in by one of our advertisers. The sponsor hoped to get a promotional buzz going on with their logo plastered over 6-page magazine spreads that advertised the contest. We hoped to pick up a few percentage points in newsstand sales and some additions to our subscriber list.
Was a great idea – everybody would win – but we were advised by the legal beagles to tread ever-so-lightly. As the contest would technically be held in various jurisdictions (the magazine was published in several international languages) we had to be aware of some pretty nit-picky laws about what we said, didn’t say and our overall intentions when it came to allocating prizes. We had to use the legalese “void were prohibited by law” on every single bit of propaganda and ignore entries that came from various locales. We had to hold prizes in escrow (holding a contest without giving away the ‘prize’ is fraud, and breaks several gaming and contest specific laws). We had to very clearly announce that “no purchase was required.” In some regions, charging people to enter contests opens up a Pandora’s Box of regulations, rules and provisos and redefines what the contest can be called and how it can be described. All told, setting up our contest cost thousands in legal fees, and our ‘terms and conditions’ pages took up 1/3 of the advertising space, even when typeset in 8pt helvetica condensed type. Bottom line, because we were holding a ‘contest’ and giving away ‘prizes’, we needed to obey a wide-range of state and national consumer and gaming laws, all of which were set up to protect contest entrants from shady practices, unfair dispersement of awards, and to ensure that – once the contest had concluded – entrants were awarded what we had promised in the first place. Would not the same types of laws apply to companies marketing their services as ‘logo design contests’? As mentioned earlier, I’m not a lawyer, but I think they just might.
The concept of these outfits is quite simple. Customers (sponsors) pay the site owner to have their fabulous logo design contest listed. Designers (the entrants) work up design concepts and enter their logo artwork in order to ‘win’ a prize (the money offered by the sponsor). Despite all their lofty verbiage, sure sounds like a typical run-of-the-mill contest to me. But what type of contest? I would assume that your average logo contest site offerings would fall under the ‘skill testing‘ category (an important distinction, as we’ll discover later). Turns out there are very important laws regarding running a contest of any kind, in this case a ’skill-testing’ contest, and there’s some hefty demands (varied by location) regarding the content and subsequent publication of said rules and regulations. Among a lengthy list of recommendations found on their site, the DMA (Direct Marketing Association) offers a list of disclosures that are required under US law, including; The number of rounds or levels of the contest, the maximum cost to enter all rounds, the method used in judging (we’ll see later that “cause we like it” ain’t good enough) and the date prizes will be awarded (I’ve seen logo contest deadlines extended by months to squeak in more entries from hapless designers). Many will carp that these are only ‘little’ design contests, hurting no-one. US-based cyber lawyer and internet specialist Parry Atfab has this to say about contests on the internet, regardless of the size -
Most web operators don’t realize that there are laws that apply to even the most innocuous contest – and that, because of the reach of the Internet, they must comply with all the myriad contest laws in the world. Because that’s far too cumbersome to deal with, the first thing web operators should know is to limit their contests to the United States. So now there are only 50 different sets of laws to deal with. And the contest has to comply with all of them – or make clear that residents of a particular state are not eligible to participate.
Now, that doesn’t square with any logo design contest site that I know of. Some states even require that companies offering prizes worth (in aggregate) over $5000 need to register the contest and post a bond for the prize amount. One of the newer logo contest sites proudly boasts on the footer of their home page that the amount of “prize money up for grabs” is in the tens of thousands. Wouldn’t that qualify them for registration and the posting of prize money bonds? In some jurisdictions, and where applicable, I’d think yes.
Also, most state and federal laws require that contests “must have a closing date, and the distribution of prizes to the winners must be carried out in a timely fashion, without any undue delays.” On another of these logo sites, contest sponsors are actually advised that they can ‘abandon’ the contest if they like (thus, the ‘prize’ is never paid out) but probably shouldn’t, because the the entrant designers’ feelings might get hurt. I’d assume abandoning an advertised ‘contest’ and not paying any prize money to entrants is a lot more legally provocative than just hurting someone’s feelings. I’d also expect that it would be the site owner, not the sponsor, who’s on the hook for the prize money and whatever legal fallout there might be. In any case, there are legal protections for the awarding of prizes after a contest has run its course. These sites seem to believe that it’s the designers’ tough luck when the sponsor walks with the prize money without selecting a winner, but I’m willing to bet that contest and gaming laws state otherwise. There has to be a winner. The advertised prize has to be awarded. See, that’s the point of a contest and why there are laws about running one.
Major sites and corporations aren’t immune to the plethora of laws either. Craft sales site Etsy tried to have a rather simple sweepstakes giveaway recently and found the process rather daunting -
Contest law is very complicated due to, for example, lottery laws, gaming and gambling laws, consumer laws, trading laws, and tax laws. And to make things even more complex, contest law varies from state to state and from country to country. In fact, depending on the contest, certain states require the posting of a bond.
When they contacted their lawyers, Etsy staffers were told that in order to hold an international contest (logo design contest sites boast about their international cadre of designers), they’d have to consult a licensed attorney who is a specialist in contest law “for each and every country eligible for the contest.” In many cases, the contest rules would need to be translated into the various languages by certified lawyers in the applicable country. In the end, Etsy gave up, opting for a contest that was ‘open to US residents only’ and slapping ‘void were prohibited by law’ all over place.
Then, there’s the issues of chance, skill and the requirement of payment to enter. Generally speaking, contests of chance can fall under lottery laws (that’s why many contests require the answer of a ’skill testing question’ to get around this restriction). Logo design contests, as mentioned earlier, might qualify as a skill-testing contest (though such contests require a clear definition of who’s doing the judging, the procedure and the rules). Surely that should be cut-and-dry? Maybe. Maybe not. Tech Firm has an excellent look at internet contests, and weigh in on what constitutes ‘judging’ , appropriately when it comes to creative work – -
The bad news is, if you fail to provide objective criteria for picking a winner, your game of skill could degrade into a game of chance. Therefore, be sure your rules are clear and describe the objective criteria for picking a winner, whether you run an objective trivia contest or a subjective essay contest.
Office.com has a little more on what constitutes ‘judging’ -
Judges should apply objective criteria, which bear a reasonable relation to the contest, when evaluating the entrants. Contestants should be advised of the standards of comparison that will be applied by the judges – not that the “best” entry will win. For example, acceptable criteria for an essay contest might be: appropriateness (25 percent); creativity (40 percent); clarity (25 percent); and sincerity (10 percent).
Once again, this is nothing like any logo design contest site that I’ve poked around on -’I like that logo’, the usual barometer wouldn’t seem to cut it. Nor would ‘wow, that groovy icon is the best’. Further, as every logo design contest on these sites has a different prize, as well as arguably different judging criteria, shouldn’t every single contest feature its own unique set of terms and conditions? I’ve also seen ‘ties’ on logo design contests, where ‘winners’ split the ‘prize’ or the winner is determined by a ‘draw’. Apparently that’s a no-no too. In many jurisdictions, ’skill-testing’ contests that end in a tie must pay both winners duplicate prizes. Any other method might turn the contest into a sweepstakes type contest where the outcome is determined by chance. And if your contest is judged as being one of chance, then any payment for entry will constitute a lottery. And that, my dear friends, falls under gambling and lottery laws – a much more serious kettle of fish. Many logo design contests seem to be free for designers to enter, but even that may not be cut and dry -
Besides making certain that you don’t charge a fee to enter, you’ll need to ensure that no purchase of your goods or services is required to win. But the problem is, some state courts might conclude that even though you didn’t charge a dime to enter, your Web contest still wasn’t “free.”
In some jurisdictions, simply requiring someone to register on a website can meet the threshold of paid entry. Some contest sites even charge entrants a ‘membership’ fee. Most contest laws require that the judging criteria, number of ‘entries allowed‘ and ‘maximum number of rounds‘ be stated beforehand, as part of the published contest rules, not as the contest progresses or as the sponsor sees fit. Accordingly, I’d imagine submitting multiple logos and variations at different times as requested by the sponsors could even be looked upon as ‘consideration’ – legalese for payment. And payment can represent illegal wagering. In some states the mandatory ‘purchase’ itself is a violation of the law. Etc. Rummaging through these legally complex factors would determine what laws apply to a contest, as well as the obligations that the contest would have to meet in order to remain legal. And as the contests are internet-based, in a mess of jurisdictions than span the globe.
While I’m not sure if the methods logo design contest sites employ are completely illegal or not (hence the question mark at the end of the title), I’m reasonably sure that many of these sites are skirting contest and gaming laws, especially when it comes to their rules, regulations and their payment of advertised prize money. If nothing else, I’d think they’re on murky legal territory and judging by most of their TOS, aren’t too acquainted with anyone in the legal profession in their own backyard, let alone around the globe. Contest rules on logo design contest sites are positively spartan compared to the typical rules required for other contests. Everyone else has to pay excruciating detail to state and national level contest laws and gaming restrictions. Why shouldn’t logo design contest sites? They want to be treated as professional design ‘alternatives’? Fair enough. Following laws and regulations is part and parcel of being a professional, and especially if you arrange a legion of contests as part of your business promotion. As we’ve seen, the laws regarding contests, on and off the internet, are complex, varied and difficult to navigate – even for the biggest companies – and I’m willing to bet that most logo design sites haven’t even thought about most of these issues. I’m thinking it’s time they should.
As usual, this post is open for comments and I’d especially like to hear from anyone with experience in these areas. Unfortunately, my legal knowledge only goes as deep as can be expected with a few hours on Google and a couple of pots of coffee.
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Very interesting article. I remember having to remind one of my clients about this sort of stuff a few years back about a contest they wanted to run on their site, specifically the ‘no purchase required’ bit; after due consideration of the legalities of what they wanted to do, they dropped the contest idea.
It had never occurred to me that these ‘logo design contests’ might fall foul of the same laws, but now you’ve pointed it out I can’t see why they shouldn’t.
I used to dislike them on moral and professional grounds; now it seems like there are legal grounds too.
This article deserves wider coverage, so I’ve submitted it to Digg.
Digg link is http://digg.com/design/Are_log.....even_legal
Hey – Andy. Thanks for dropping by and for the much-appreciated Digg. I did a lot of poking around on legal sites and blogs regarding contests before posting the article. They all said the same thing – holding a contest is complicated, expensive, and requires a ton of legal protection. Most advise that any site-owner should weigh the risk/benefit ratios before continuing.
Like you, it never entered my head that logo design contests might have to follow the rules and regulations that *every* contest has to follow. And like you, I don’t see any reason why they shouldn’t. If that basic premise is true, then a vast majority of contest sites are not only ignoring contest and gaming laws, but might be breaking them completely.
Logo contest sites might argue that they’re somehow ‘different’. I don’t see how they are.
Great read. Like Andy W I’ve had a downer on logo contests for a long time.
I think the key to avoiding unscruplous websites stealing designers time lies in educating both those that hold the competions and those who enter. I’d imagine the majority of people that hold design competitions are simply a little naive as to the regulations, and seriousness of the challenge there setting up.
I’ll post up a link to this article on logopond.
Well-written. Logo design contest sites are also another method of personal data collection and dissemination. (Wretched hives and scum and villainy.)
I am printing this article and sending it to all my clients. Thank you for posting.
Quad Machine – thanks for the comments. You’re probably right with your point that most site-owners are naive to applicable rules and contest laws. To be honest, it never occured to me, and I’ve been harping about contests for years, almost to the point of vowing never to write about them again (a vow I’ve broken twice in the past two days). Thanks for the mention on Logo Pond (if you like, we can discuss the ‘logo mill’ topic at a later time).
Eric – you’re abosultely right about privacy issues and entering contests. There’s a slew of laws regarding ‘data-mining’, contact info and what contest holders can, and cannot, do with the information collected. From what I gather, there are extensive regulations on how holders and/or sponsors declare that as well. There’s also an age barrier to entering contests due to various child protection and privacy laws. I left that aspect out of the post as it was already reaching eye-glazing length.
Again – thanks to both of you for taking the time to read my post.
[...] The thing is, whatever your personal stance, design competitions aren’t going away. There’ll always be a demand for the lowest common denominator, and there’ll always be a supply of people willing to work in the hope they’ll get paid. One of the 5 hats of graphic designers is the teaching hat, and it’s up to us, as designers, to educate clients why our services are worth paying for. Update 13 April 2008: Are logo design contests even legal? A welcome read from Steve at The Logo Factor, questionning the legality of logo design contest websites. [...]
Thanks for posting this very interesting article, and you are right. There are very clearly defined laws when it comes to holding ANY contest. I’ve worked a few campaigns that featured contests as part of the promotion and they are a legal hassle to set up. I don’t see why logo design contests should be any different, and I would imagine that many people holding “Design My Logo” contests have no idea that there would be applicable laws that they should follow. I dislike these design contest sites intensely as it seems to me that designers are being exploited, clients are being mislead into thinking they are working with dozens of experienced designers while the site owners make a killing on fees they charge the contest holders. People seem to think it is a simple matter of setting up a web site, starting up contests and waiting for designers to submit logos. After reading your article, I’m starting to think it’s not that simple. It will be interesting to see if any logo contest site-owners show up here to argue, or explain, their position.
Excellent article, and backed up with lots of great links I am just starting to dive into. At the core, the myriad of legal hoops exists for a reason — to keep people from getting ripped off. It seems these logo sites are not really taking state and federal laws seriously, which is a shame, because you really only need one class action lawsuit to financially destroy the entire operation.
Hi Kevin – welcome back. Actually, the article is partly due to your delicious anti-contest rant from last week. Got me thinking, so I thank you for it once again. True enough about contest laws and regulations – they’re to keep people honest if they choose to promote their business via any form of contest, be it chance or skill.
Some of these contest sites seem to think that they can change rules, and the demands of the designers entering their contests, at will. One of the common types of comments is “Now that we (the contest holder) have seen a whole bunch of designs (from contest entrants) – we’ve got a better idea of what we want. Please submit more designs with that in mind before we give away the prize.” I don’t think that’s on, with what I understand about how contests are regulated.
Also, site-owners and contest holders seem to think that if they don’t get any entries they ‘like’, it’s simply a matter of walking away, not paying out the prize money, and stiffing all the designers who entered an advertised ‘contest’ that promised $X in prize money. In one site’s guidelines, they actually tell the contest holders that they can do this, but shouldn’t. While I’m not a lawyer, I would think it’s a lot more legally complicated than that. I don’t think it would take a class action suit either – probably just a couple of designers who were pissed off enough about a contest holder walking from a contest, without selecting a winner or awarding the prize money advertised.
My own policy is not to enter a logo (or anything else) for which I haven’t already been paid. In other words, if it isn’t good client work, I won’t enter it.
I do have one exception to this rule, and that is work done on my own projects. Most legit design competitions have a category for self-promotional work. This is a good category to choose when you’re running a bit light on good client work to submit.
Wow. Great article. After reading some of the links about laws and regulations for contests, I found a few logo design contest rule pages that seem to feature the required verbiage. I suppose these are what logo contest rules and regulations should look like:
Firefox T-Shirt logo contest
Steve Aoki logo design contest
Powered by Choice logo design contest
Zazzle pimp our logo contest
These contest rules pages are nothing like a typical logo design contest site, or an average contest for that matter. I don’t see how the other sites could function if they had to follow the contest laws and regulations that would seem to apply to them.
Excellent research. Thanks for presenting it. Came over here via David Airey’s blog.
Any contest is a mire of legal issues, even a raffle. We did one for my work a while back at a convention our franchisees paid to come to. We couldn’t promote it or even mention it in any way before the actual convention because it could be seen as “coercing” the franchisees to pay to come to the convention in order to participate in the raffle.
I would think that the logo design sites would try to cover themselves by claiming that entry is voluntary and the entrant assumes any/all risks. But would that stand up in court? Just because you state “it’s not our fault if anything happens,” it doesn’t necessarily cover you in court, no matter how clearly you write it.
I am of the same mind as Andy, I don’t like these contests because of how they hurt our profession, but now they may have legal problems! So when are we going to bring a class-action lawsuit against them for devaluing the product that truly professional designers provide?
While I agree that design competitions cheapen the art – financially speaking… However its just a part of the democratization of skill sets that comes along with the internet.
Now I’ve got 21-year-old filmmakers to compete with because they are landing 5 million dollar deals to make feature films (obviously I work in the film business). Honestly these people are talented and deserve it, just as competition winners deserve to win design competitions…. What will happen soon is that competitions will become so widespread that only the best ones will get enough (good) entries. Also, competitions winners will probably be hired to design more than just a logo… Once that is done, they may be hired on an ongoing basis as art/design/visual consultants or art-directors for the company.
Honestly, I lament the current state-of-affairs as much as you, but if people decide to enter competitions, it is not up to you (or me) to try to shut them down because you feel it is taking away from your business… It is up to you to either win the competitions or find another way to make money.
This is the harsh reality of a world with borders blown wide open by the internet.
I find this article very enlightening. I never knew these legal issues though I have participated in some logo design competitions. Its really difficult for new designers to make their presence felt.
Rajita – thanks for the comment. Your comment “Its really difficult for new designers to make their presence felt” isn’t an uncommon one. Gave me a few ideas – see our new Marketing Online Design series that deals with this very sentiment.
Ari – thanks for stopping by. In regards to your comment “competitions winners will probably be hired to design more than just a logo”, while that may be true in some instances, I’d assume the majority of logo design contests are ‘one-of’ in nature.
Most folks who want to spend fifty dollars on their logo, don’t ever bloom into a client that’s willing to treat a designer like a professional. If I had a nickel for every time someone had tried to convince me “just design this for free and I’ll send you a boatload of business afterwards” I’d, ahm, have a lot of nickels.
You’re right though – I do view contests as ‘taking away business’ – as a studio owner I’d be a liar if I claimed otherwise. However, this isn’t the only reason, or even the main one. It’s the self-destructive nature of the industry that concerns me. Sorry to hear that the same mentality can be found in film. I have a few friends who are photographers, who have seen the same trends impact their industry.
Very interesting read.
I wonder how companies like Threadless fit into this? Is the process of votes by users an effective lottery? Users do not have to take any particular criteria into account; there’s no telling what people will like.
http://en.wikipedia.org/wiki/Threadless
My personal policy is never to enter any contests. For me posting a real project on my site is worth thousands of time more than showing off that I won a contest.
It’s difficult for new designers to see the bigger picture when they are just starting out, and many see design competitions as a chance to get their work out there and noticed. However most of these comps are probably set up to get around paying for professional services, which is unfortuntate. The lack of appreciation for design is a whole different topic.
What I am wondering is whether there is a watchdog or body where these things can be reported, if they are in fact breaking laws? If indeed it is ignorance on the part of the organisers, then a warning could be all it takes. However if it is something more deliberate, then this needs to be curbed now rather than later.
Great article and comments!
For those interested in more reasons to avoid design contests like the plague, I just posted a new piece on why logo contests don’t work. Lots of these things feature work that’s been pinched from other sources (in some cases, quite blatantly).
As a contest holder you run the risk of selecting a ripped-off design. If you’re a designer, you’re putting in all sorts of time and effort to ‘compete’ with people who aren’t above stealing other people’s work without any effort at all.
Hardly fair competition for anyone.
Wow. That’s a whole different take on the spec work issue that I never thought of.
Just the other night (or was it early morning?), I got the wild (or stupid) idea to send an email to someone holding a “logo contest” at 99designs.com. I believe there may be a bit of back and forth with this person regarding the ethics of spec work. As of this moment, the other party sees nothing wrong with it and gave a few arguments why. I believe the arguments are not very strong and I’ll be able to show the the poor reasoning of them. I may post the correspondence here when it’s done. This may be a worthwhile exercise for me and could be beneficial to others as well. It’s always good to try and understand the thinking of an opposing view and achieve clarity of the differing opinions.
I also discussed this article with my brother-in-law at great length. He is a lawyer but not a contract lawyer so his knowledge was limited. However, he was intrigued enough with the legality issue that he will at least be reading this article and possibly giving his take on it. Similar things like this—people looking for the cheapest way to get something—is obviously not unique to our industry. My brother-in-law charges about $4K – $5K for a Trust. People can get the same thing to do themselves at Staples for under $100. You can also have one done at sites like legalzoom.com for somewhat more than that but still far below $4K.
The differences in the ways to create a Trust are the same as what the creative industry faces with the spec work issue. The way we see it is that it’s much more than a logo design. It is an identity created for a client that we have taken the time to get to know. We have done an in-depth interview with the client. We have researched the industry and the competition. We have explored different avenues of expressing the client’s brand. The concepts behind designs are explained. We have built a relationship with the client that is (hopefully) based on trust and a respect for each other’s talents and skills.
A logo contest design is an identity based mostly on what the client wants, not necessarily what the client needs. Basically it’s monkey-work or, like George Harrison said, “Just tell me what you want me to play and I’ll play it.” It may be a good design but it will most likely fall far short of being the work of communication it should be. And just like many, many aspects of life, this generally follows the 80/20 rule. 80% of the people are looking for the cheap way out. 20% understand the importance of doing something “right” even if the cost is more. A question we need to ask ourselves is do we really want to deal with the 80% that are content with just anything and aren’t willing to pay for it? Or should we cultivate the 20% who understand at least some of the underlying reasons for why creative work is done the way is done? I think we’re better off spending the majority of our time pursuing the later.
The reality is that this isn’t going away. In fact, I have heard some arguments that have given me pause to consider them. Design contests may indeed be a viable niche for small businesses with very small budgets to get what they need in order to grow their business. Something they would not be able to afford otherwise. And it may be a way for some designers to hone skills and build a portfolio. I don’t agree for many of the reasons already cited here but I also can not casually dismiss some of the reasoning. Of course, what I believe is a more correct course of action for businesses with very small budgets is bidding sites like guru.com where proposals are submitted to clients based on job criteria and budget. Then the job is awarded to the winning proposal. A single client working with a single creative and building a business relationship. Just as it should be.
One important thing we need to be careful about when talking about issues like these is to avoid acting in a way that makes us look reactionary, non-thinking, rude, or worse, like we are whining. One way to assure this is a calm, polite, clear statement of the facts and the creative community’s opinion about them. Hyperbole, insults and histrionics are not the smart road of choice when faced with the arguments for this practice. No matter how much you may want to call someone an idiot or how much they may deserve to be called so, we must always remain professional as we strongly present our case to the public. Otherwise our arguments are worthless before they are even made.
I think I’ve used too many pixels to write this. My apologies for the long-winded post.
Rod
Some excellent comments and insight. Thanks for taking the time to share your thoughts.
Well,
I understand that a lot of designers would like to IP-right the world together will world famous criminal B. Gates, but sometimes people are allowed to do something…
I’m a lawyer and I guess you just missed some pints here
First of all, no competent court will take time and effort to get involved in a jurisdiction web for a $30,- fee. Second, if you think this is not legal, any kind of tender would be illegal. Submitted logo’s are nothing more than an offer which can be accepted or declined.
The gambling rules do not apply here, no matter what your overpaid legal staff might think!
Very nice article but I agree with what John said. The lotto rules dont apply here. Its formula 1. The fastest driver gets the title!
However I’m just thinking how the taxes would apply to the prize money in countries where there is no tax on gambling?? Would this be treated as a prize (no tax) or a sold commodity/
[...] Are logo design contest sites even legal? …what if these sites are breaking a ton of laws, in jurisdictions all over the world, as well as running afoul of state and national lottery and gaming laws? A little far-fetched? I thought so at first, but after fairly intensive research, I’m beginning to think otherwise. [...]
[...] Are logo design contest sites even legal? …what if these sites are breaking a ton of laws, in jurisdictions all over the world, as well as running afoul of state and national lottery and gaming laws? A little far-fetched? I thought so at first, but after fairly intensive research, I’m beginning to think otherwise. [...]
It seems really likely that any of these sites could easily be sued out of existence by anyone with access to a lawyer. The person who did that would be a hero to the entire graphic design community.
John, you say you’re a lawyer, but you write like you’re in High School. I’m not buying it.
[...] Are logo design contest sites even legal? [...]
“John” is no lawyer but, if I interpret what he’s trying to convey, there seems to be to a point to his rambling. People simply want to have a design, at a reasonable cost, and don’t want to be locked into a narrow group of individuals or, worse, an individual who may or may not “get it” as to their design goals. By exposing the opportunity to a wide range of minds, ideas come about that none of them individually or even a small group of them would ever have considered (see Linux).
Ive read through this incredibly long list of posts and all I see is a group of folks lamenting the fact that someone/some group has dared trespass onto their sanctified ground. The legality issue is a red-herring designed to intimidate. It is of absolutely no value; no court is going to pursue something so mundane and of so little value. Think of how much work Steve Douglas could have been doing to bolster his client base, create billable time, even service his wife or husband instead of wasting time researching this nebulous pursuit.
Get over yourselves; either join a union so you can have someone to run to when your nose runs or focus on doing a good job for your clients, to ensure that they bring you their work in the future, and don’t instead take it to a design contest site where young, eager people who actually want to work (instead of whine) are lurking.
@ Gladys – I don’t think I’m wasting my time. The graphic design industry is a passion of mine and has been for almost thirty years. That industry eating itself is certainly of interest to me, and something that I feel is worth while ranting, venting, writing and yes, even whining about. In terms of people that read this blog, design contest features are the most read and commented on pieces, so people who read my humble blog seem to like reading them. Ironically, some of the longest, and most passionate comments are from people that after reading my sometimes bloated prose, suggest that I’m wasting my time. I hope the irony is apparent.
In terms of site traffic, articles dealing with this issue are often discussed on graphic design blogs and forums, complete with links to the original which as far as I understood, was the very spirit of the internet. Recently, due to several Tweets and re-Tweets on Twitter, a related page was hammered so hard by visitors that the MYSQL server gave up the ghost for a while. Accordingly, writing about contests, spec work and the newly re-purposed ‘crowdsourcing’ issue doesn’t appear to be a waste of time for me, even (as you suggest) from a business perspective. But even if it were, it’s my time, this is my website and I was kind of under the assumption that I’m free to write about what I want. Meanwhile, anyone is free to dispute any of my opinions in the comments section as you so kindly have.
While I appreciate your concern about my sex life, or lack thereof, your comment about ’servicing my wife’ seems a tad low-brow for someone expecting their opinion be taken seriously, so I don’t think I will. Take your comments seriously that is. The ’servicing’ will remain, as it always is, up to her.
And just like Linux, you get something that just basically works, but never excels at its goal.
The rest of your post is crude bootstraps bullshit that proves little more than the fact that you don’t understand the issue at hand (unions?).
I have read all the posts and found all comments interesting. I myself, have just started to endeavour into the graphic design business. I came across this site (astada.com) and thought that it would be good to get experience and to determine wether my designs were likable or if at a professional standard etc.
After a couple of months in entering my designs I noticed that this one particular designer was winning most frequently. Out of 17 logo contests, this person has won 10 in total, thus winning more than once in a calender month. It has now come to the point of the contest holders looking at the work of this person and his results (winning most logo designs).
What will happen down the track? Shouldn’t there be a rule where you can only win so many in a month?
I contacted the site administrator by email. I approached it in a calm, civil manner asking them to revise their rules and regulations after getting other designers opinion etc. The response I got was typical. In a nutshell, they don’t care about the designers or their feelings.
Does this suck, or am I being selfish…or whatever?
I have come to the realisation that I don’t want my work to be exploited in this way and I believe clients should have the privalige of a one on one with the designer and given the service that they deserve.
As Nina stated “What I am wondering is whether there is a watchdog or body where these things can be reported, if they are in fact breaking laws?”
An update. This person that keeps winning these contests has been a freelance graphic designer for the past 3+years. I guess these contests are another door open for him to improve his business.
Update…
It seems I have been banned from astada.com because I reckon it’s not fair????!!
I see what you’re saying, but in all honesty – reading this was a little like reading a temper tantrum in the grocery store (as opposed to watching one). First of all – you prefaced your “article” by saying you’re no lawyer and reading your opinion was worth exactly what it cost us to read it – nothing. The alarm bells that go off when one reads something like that is – this is a bunch of whining or ranting – and probably both.
And I gotta say – amid all the pseudo-legalese, what this boils down to is you ranting about how people you look down on (freelance and/or amateur artists) dole out crap work for companies that could be paying you hundreds of dollars instead of paying them tens of dollars to design their logo. Well, that’s your opinion and you’re entitled to it, just like a company (whether you agree or like it or feel cheated or outdone by it or not) can choose to take a chance and pay $50 dollars for an “okay” logo versus whatever you charge for what you apparently think will be a spectacular logo just because you designed it.
No offense to all you whining professionals, but last I heard – people could spend their money any way they wanted to. And they didn’t have to check your “cheapening the industry meter.” To someone better than you – going to you might be considered cheapening the industry. It’s all relative at some level. If that’s the chance a company is willing to take (just like hiring you is a chance your client is willing to take) that’s their prerogative.
But don’t disguise your jealous distaste of something you can’t control (the changing nature of your industry) as some sort of good samaritan, buyer beware, saving the client from his or herself for the integrity of the industry crap. You’re hot under the collar because the average joe and average jane can make something pretty passable with their crappy programs and it’s going to force you to change with the times and design on a dime or find a new industry. This is the information age – some companies neither want or have the luxury of sitting through your design catharsis when tom, dick, and harry are chomping at the bit and can churn out 62 designs in 6.2 minutes, download them, and have them up and ready for any and everyone to see. The advantage is that, for virtually the same end product, they’re paying tom, dick, or harry’s phone bill for one month versus paying your mortgage for three.
And that’s not good business sense to you?? I think sometimes people in a particular industry tend to think of it a bit more highly than the rest of us do. Basically your article boils down to this:
“There are a lot of design contests out there and it kinda sucks because that leaves less of the design pie for me and a lot of times the client is getting ripped off designs that I created. But you get what you pay for. It might be cost effective, even gratifying to have a free-for-all contest, but it might end up costing a company more than its worth in the long run. Not to mention, as designers – if this idea really takes off, it means we’ll have to rethink our game plan just to stay relevant and working. But that’s life. You either roll with it or get rolled over.”
And no, I’m not a designer and I haven’t entered a logo contest, but after reading this – I think I will. I don’t like when people degrade one group just to loft themselves up. There’s crooks in any industry whether legitimate or not and for all you people to just down companies and artists because they found another way to meet each others needs is really petty and kinda sad. Not everyone who enters a contest is a copying, no talent hack. And I think I just might set out to prove that – if only to myself.
Several people here have asserted that no court would involve themselves in something as trivial as a logo design contest. That’s not necessarily true, and I’ll explain why.
Courts do not decide who will and who will not become a defendant. Rather, courts are obligated to consider whatever matters are brought before them. In criminal law, prosecutors decide whom to prosecute. And in civil law, any private citizen, organization, or government agency has the right to file a lawsuit against any other citizen, organization, or agency.
Therefore, it is always possible that any given issue, not matter how trivial, will end up in court. It’s not the magnitude of the issue that matters, but the zealousness of the complainant. If someone with standing feels it is worthwhile to file a case against one of these contest holders, they have the legal right to do so, and the courts will be obligated to pay attention.
That does not mean the court must pay attention for very long. The court may, for example, immediately dismiss a complaint as nonviable before it goes to trial. Or the court may decide that the case is not within its jurisdiction. Et cetera. But the court system as a whole may not refuse to consider a case on the grounds that it is too trivial. In every jurisdiction with which I’m familiar, local rules provide a venue for even the smallest cases.
For example, in Chicago, where I live, the Municipal Court regularly hears cases worth less than $500. Many logo design prizes exceed $500, and quite a few are in the thousands of dollars. An aggrieved party in such a transaction would be well within its rights to bring a claim in our Municipal Court and in similar courts across the country.
But it is not litigation by contest sponsors or contestants that site operators should fear the most. Rather, they should be most wary of potential governmental litigants, such as gaming commissions or attorneys general. These officials and agencies have both the right and the duty to enforce laws pertaining to contests.
Would they devote resources to something like a logo contest? A responsible attorney advising a site operator could only answer: “maybe.” Who can predict the whims of government regulators? Who wants to risk being made into an example? I’ve seen a lot of people prosecuted for far less than holding a legally questionable contest. All it takes is a zealous plaintiff.
And that, I think, is the most important take-away point of Steve’s article: logo design contests may or may not run afoul of the myriad relevant laws, and they may or may not give rise to court cases someday. But they do run that risk.
As an aside, I also disagree with those who have suggested that this discussion is nothing more than fear-mongering for the sake of stopping logo contests. I doubt that Steve or anyone else here expects to scare logo contest operators out of business. If the operators are not legally cautious, this article won’t make them so, and I’m sure Steve knows that. This article, I take it, is simply a detailed exploration of an issue people find interesting. As is my reply.
@Gladys – parts of your comment were irrelevant and completely out of order. Why would you bring something personal like that into a general discussion? So tacky. So unnecessary. So immature. So rude. And SO UNACCEPTABLE.
If you can’t prove your point without being vulgar – be quiet. No one wants to sit through your juvenile display. And it sounds like you’re lamenting the fact that he isn’t servicing you! GET OVER YOURSELF. Limit your attacks to the topic or the industry being discussed – that’s how we grown-ups do it.
We get what you’re saying, but honey, the way you chose to say it was low class. And that says something about the kind of person you are. CHECK YOURSELF!
[...] into contests that they’re hosting, promoting and earning revenue from? I think ‘legal quagmire‘ just about covers it. Should also point out that whatever legal protections are being [...]
You seem to rail against logo design contests a lot, however, I don’t see how you can say that they’re hurting the design community. I think the same could be said for your business – you’re lowballing clients with packages. I worked at 2 different agencies for a total of 9 years. What you’re doing is telling clients that all logos are the same – you have a set price that is indeterminate of the work/time/resources spent. I don’t see how you can be so arrogant towards design contests??
I have left full time work for freelance work. The stress is much less – I only work with good clients – I work from home. The bulk of my work is digital illustration now – in between jobs, I was looking for something design-related to practice my skills. I stumbled across a logo contest – at first – I didn’t see why people would work for free, but I gave it a shot and really enjoyed the process. The competition was fun and, for the most part, everyone was on the up and up. I have since found sites that are a little more relaxed with the rules, but there are some that have legitimately talented designers that are much better than most of the people I’ve worked with at some larger agencies. Many of the designers are also in the same situation I’m in – they’re freelancers that have down time. They want to make logos because they normally do other types of design work. Frankly, I’m sick of designers saying that sites like this “hurt the community” That’s BS if I’ve ever heard it. You should be saying sites like this “hurt my overpaid, over inflated agency”. What agencies don’t want you to know is that all of the “market research” is bought by research companies. They then mark up the cost. THEN – they “analyze it” which is basically writing out a list of key objectives. This costs as well. The CD or AD then slops something together and either tweaks it or hands it off to a SD to clean up while they call it quits to go play a round of golf with a client that’s leaking dollar bills. 3 weeks later, they have a finished logo. But wait – how can we justify charging the client thousands of dollars when we basically revamped their old logo? I know, we’ll have the intern scrap together a couple logos and maybe I can recycle some of these old pitches! That way, the client will pick the one idea we have but it will look like we offered them 5 ideas!
Obviously – that situation is overly dramatic, but it’s not too far off. Bottom line – clients are realizing that freelancers are just as effective – if not more so – than agencies. When you go to a logo site – yes, you’re getting some amateur work from untrained designers in the mix, but you’re also getting a lot of creative thought from well-qualified freelancers. Additionally, since I’ve started entering logo contests, I’ve picked up extra design work from clients I otherwise would not have met. All in all, it’s been VERY good for my business.
As for the actual point of this particular blog entry – how could you possibly construe a logo contest site as gambling/lottery? It’s more akin to a craft fair. Designers have created art pieces. The buyer will decide how they want to spend their dollar.
Honestly, your “blog entries” come across as a desperate attempt to dissuade your clients from turning to a more effective business model.
Also – you seemed to say in other posts that clients are expecting work for low prices – however, many contests offer prizes of $1000+ for a single logo. Last month alone I earned $1850 from 3 wins. That’s not a terrible amount of money, but when you consider I only spend maybe an hour a day making logo entries – that’s over $60/hour – which isn’t shabby. I think clients realize that their dollar goes a lot further with logo contests and/or freelancers.
@ Josh – Thanks for your comments. My point of contention has never been how much contest holders pay. My issue has always been about designers not getting paid. And while it’s nice that you earned decent money with your three contest wins, you’re ignoring the other designers you ‘competed’ against, many of whom are as talented as you, exerted the same amount of effort as you, have the same overhead expenses (software, hardware) as you, but made absolutely nothing. At first blush, any design contest is temporarily beneficial to the individual that wins the ‘prize’. Not so much to those that don’t. And the numbers who don’t win far outweigh, by a factor of thousands, those that do.
“I think the same could be said for your business – you’re low balling clients with packages. I worked at 2 different agencies for a total of 9 years. What you’re doing is telling clients that all logos are the same – you have a set price that is indeterminate of the work/time/resources spent. I don’t see how you can be so arrogant towards design contests?”
Heh. You accuse us of lowballing. At times, prospective clients tell us we’re “ridiculously expensive” (and it’s true – we do bill more than most other online logo companies). Can’t win I guess. We’re not telling anyone that logos are all the same – that’s an assumption you’re making. Over the years, we’ve been able to average out the amount of time a logo takes and set up pricing accordingly. On some occasions, we hit it out of the park first round. Other times, design projects drag on for months. Most end up, in time spent anyway, somewhere in the middle. We do have to charge more for illustrative work due to the additional time required. The applicable phrase would be – It all comes out in the wash. If you want more of a complex explanation, I already wrote about this early last year. You think design contests are peachy. Fair enough. I don’t. Not sure how being critical makes one arrogant.
In regards to my “blog entries coming across as a desperate attempt to dissuade (my) clients from turning to a more effective business model”, let me answer you this way.
It’s true that I am a designer, but as the owner of a small studio, I’m forced to wear the hat of a business owner as well. And as a business owner, if I believed that logo design contests were a ‘more effective business model’, an effective way to develop a logo and didn’t care about their effect on the graphic design ecosystem, then I’d simply change my business model and do one of the following:
1) Fire all the designers that work for me, sub out our work to logo design contests, avail myself of the hundreds of concepts submitted and up-sell the final product to OUR clients. You could work for free for OUR clients, and if you did win, we’d pay you whatever rate we had set. If you didn’t win, then you’d have had the ‘opportunity’ to present your ideas and concepts to OUR clients, without getting paid to do so. Funny thing – our biggest company expense is manpower, so conducting ourselves this way would be more profitable for The Logo Factory as a corporate entity, as opposed to the one-on-one work we offer now.
2) As a design firm with some pretty talented people on staff (and having been in the logo design business since 1996) we have an enormous back catalog of unused logo concepts, many of them organized by category and theme. Hard drive after hard drive of vector based illustrator documents, some of which are really, really decent. Accordingly, we could flood contests with design concepts from our old inventory (as many logo design companies are already doing) and probably win more logo design contests than you have the time to enter. We could lessen your chance of winning, simply based on the volume of entries we could submit.
3) Start up our own logo design contest site using one of the many domains that we currently possess. Developing the software for a gallery and submission site isn’t terribly difficult, nor expensive, and with the amount of traffic our site has, we could build a ‘community’ fairly quickly. If we wanted to maintain the ‘illusion’ of being a ’studio’, we could even host logo design contests on the sly (ie: hidden from our client’s view) as some online logo companies do. And once again, you could work for my company for free, while I would earn profit from every contest I hosted.
You see Josh, if I were to accept YOUR position on logo design contests, and in every case, my company would profit (perhaps more so than we do), whereas you’d STILL be working for nothing (or the very low chance of getting paid). I don’t think that’s terribly fair. I’d rather hire you as a designer, pay you as well as our business flow allows, supply you with hardware, software, benefits and a couple of nice social outings a year. Or, as a freelancer, I think you should paid for your work, from whatever client you work for. I’ve been in the graphic design industry for over 30 years, and over those years I’ve come to view it as my home, and have a great deal of respect for the practitioners of same. If my “railing” were solely about my personal profit, and design contests are a “more effective business model” then I’d have jumped on one of the three options mentioned a long time ago. perhaps laughing all the way to the bank as I did so. Alas, I think the issue is bigger than that.
In terms of ‘construing’ logo design contests as gambling or a lottery, you’ve utterly missed the entire point of the article. ANY contest is governed by pretty restrictive contest laws – that’s just the way it is. You might like to believe that a logo contest is akin to a “craft fair”, but it isn’t. Even the design contest websites themselves refer to their offerings as ‘contests’ and ‘competitions’. You can call design contests a fire truck if you like. That doesn’t change what they are legally.
However, I wouldn’t expect you to take me word for it, so let’s use an example of a current event – LG Corporation’s ‘Design The Future’, a contest were LG is offering significant prize money for mobile phone design through Chicago based “crowdsourcing” site, Crowdspring. Now, let’s take a look at the rules of entry (supplied, no doubt, by LG lawyers). All the things I mentioned above are featured – restricted to US residents (for which Crowdspring’s ‘global marketplace‘ is understandably upset), specific deadlines, how the contest is to be judged, there are no back-and-forth design revisions, etc, etc, etc. Now, take a look at all the other contests running on Crowdspring, 99Designs or ANY other site. None follow these contest-law influenced rules. Why do you suppose that is? I find it hard to believe that design contest sites know more about relevant laws than one of the largest companies in the world. Surely a large corporation like LG and/or Autodesk are well versed in contest law, not to mention having the legal gravitas to get it right. They certainly seem to think that keeping their design contest on the legal up-and-up important enough to issue a six page document of rules, above and beyond what Crowdspring’s site already features generically.
I guess my question to you is this – if mainstream corporate companies like LG and Autodesk think it’s important enough to follow relevant laws when hosting a design contest, why should nobody else?