Episode 49

E49: Do I Own It? Can I Use It?

When it comes to copyright, there are a few rules that can make all the difference between scaling your business and getting tripped up by the counterintuitive rules of intellectual property law. You need to know who owns what, who has what usage rights, and what the consequences of misappropriation might be.

This episode was recorded as a LinkedIn Live, which I hold the last Wednesday of every month at Noon ET (check out my YouTube channel if you want the full version with slides) and covers how to create, protect, and maximize your copyright assets.

Among the questions I answer:

  • What does having an employee or contractor have to do with copyright? (A lot.)
  • If you create something for a client, who owns the IP? (A lawyerly, “it depends.”)
  • Are there magic words to clarify copyrights? (You bet there are!)
  • When someone else owns the copyright, can you use it? (Don’t count on it.)

Other Resources Mentioned:

Connect with Erin and find the resources mentioned in this episode at hourlytoexit.com/podcast.

Erin's LinkedIn Page: https://www.linkedin.com/in/erinaustin/

Think Beyond IP YouTube Page: https://www.youtube.com/channel/UCVztXnDYnZ83oIb-EGX9IGA/videos

Music credit: Yes She Can by Tiny Music

A Team Dklutr production

Transcript
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Hello, ladies.

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Welcome to the Hourly to

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Exit podcast.

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This is a replay of a LinkedIn Live that

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I did last year.

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Lately, I've been leaning into the

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hourly side of the hourly to exit

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journey, whereas this time last year,

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I was emphasizing the exit side

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of the journey.

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So I wanted to replay this

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because it.

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Addresses kind of that early stage,

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when you are trying to put the

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foundation in place that you need to

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grow your business from an unscalable,

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oftentimes hourly, one-to-one model,

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to a scalable one, to many model.

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So before you invest your

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precious resources, whether it be in.

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Coaches or legal fees or other things

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to develop, a one to many offer, whether

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that is products, licensing programs,

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which, you know, I love certifications

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or even something as seemingly simple

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as a digital course.

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You need to be able to answer three

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important questions about the quality

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of the intellectual property you

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want to use.

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One, do I own what I think I own?

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Two, if I don't own it, can I use it?

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Three.

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Am I doing everything I need

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to do to protect what I own?

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So today's episode explores the

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second question, whether or not you

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can use something that you didn't

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personally create.

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So if there's anything in your

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business that you are using, Even if

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you're currently using it with your

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one-on-one clients, it is a separate

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question about whether or not you

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have the right to include it in your

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new scalable offers.

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So this is what we'll talk

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about today.

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Listen and enjoy

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We're gonna be talking about

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the sources of intellectual

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property.

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As well as the uses of intellectual

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property.

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And so this is kind of a master

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kind of overview.

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We're gonna talk about each of

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these elements and basically we'll

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be talking about whether or not your

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use is unrestricted or if it is

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restricted now.

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Exactly how your rights may be

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restricted, would be dependent upon

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the documentation and would be

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dependent upon the circumstances, and

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therefore giving you an opinion

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about whether or not a particular

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use is restricted would of course

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be legal advice.

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I don't give legal advice over

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LinkedIn Live.

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I will be able to give you some

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guidelines about your circumstances

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for you to think about whether or not

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you have restricted or unrestricted

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use with respect to any piece

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of intellectual property.

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So let's first talk about your sources

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of intellectual property.

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So where does the intellectual

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property that is in your business

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flowing through your business?

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Where does it come from?

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So the sources.

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Of course it could be your employees if

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you have employees.

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I'm talking about your W2 employees,

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employees that you are paying

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employment taxes for.

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Then you have your contractors.

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Those are people on your team that are

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not your employees, that you have

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engaged to create deliverables, and

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then you get the IP from other third

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parties as well.

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Your client can, of course, be a source

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of intellectual property.

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Oftentimes, our clients will give

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us materials that we are to use to

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provide services we can get.

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Intellectual property from a

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licenseor via a license agreement.

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And then we can get them from

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other sources as well, which we

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will talk about.

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So how do we use intellectual

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property?

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And I like to put 'em in these

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five buckets.

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of course they can all be broken down

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further, but the main buckets would

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be tools, marketing, client deliverables,

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products, and.

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Exit.

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and of course I'm talking about the

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perspective of the service-based

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business and when we have a service-based

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business, we're are.

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Primarily talking about copyrights.

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Yes, there's going to be some

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trade secrets.

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Yes, there's going to be some

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trademarks, but for the purpose of

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this conversation, we're talking

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about copyrights.

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So those things that are in writing or

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created creatively put intangible

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form, photos, graphics, software,

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books, trainings, things like that.

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So those are the things that we're

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talking about during this conversation.

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So your tools will be the things that

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you use internally.

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These are the things that you

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use in order to provide services

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to your clients.

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So those might be your standards

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and procedures.

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You may have a database, you may

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have a resource library frameworks.

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You probably have some sort of

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productivity tools or things like that.

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For marketing, those are things that are

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public facing that are not for sale.

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So website copy, your lead magnet,

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your newsletter, your social media

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posts, and you know your speeches or

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your slideshow for presentations, you

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have your client deliverables.

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So you'll notice that client work

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is both a source of IP and clients

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can also be a use of intellectual

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property.

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So when we have our deliverables, In

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the service-based business, we

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are delivering intellectual

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property to our clients as well.

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And then products would be those

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things that we create for sale,

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like books, trainings, licensing

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program, and then an exit would be in

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the event that you sell your business,

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can the intellectual property go with it?

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So those are the buckets of uses for

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our intellectual property.

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So top level answer regarding

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the unrestricted use of ip.

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Do you own it?

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Do you own it exclusively?

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And if you do, then you have

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unrestricted use.

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It's.

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Really that simple.

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If you do not own it exclusively,

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then you have restrictions on

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how you can use it.

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So how do you get exclusive ownership

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of intellectual property?

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Default under copyright laws

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is if the human who created the

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intellectual property, who

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who created the the copyrighted

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Owns it.

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So if you created it and it's

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original to you, you own a hundred

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percent of it.

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If your W2 employees created it, then

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as the employer you own it, a

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hundred percent is the owner.

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And then the third is if there's

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something in writing, signed

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in writing that.

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changes that dynamic so that

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the creator is not also the owner.

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So if you engage a contractor and

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you have a written services agreement

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with that contractor that assigns the

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rights in that copyrighted work

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to you, then you are the owner.

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And so in those circumstances,

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own it.

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You have unrestricted

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use of it for all those five

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buckets of uses, unless you created

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those materials.

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As part of a service for a client.

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So that's gonna be addressed in the

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restricted use.

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but anything that is created outside of

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a client engagement, you own it in these

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circumstances, and you have

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unrestricted use of that ip.

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And then I'm gonna go dig a little bit

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deeper regarding the contractor,

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because that is by agreement.

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So you need to have the right words in

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your agreement to make sure that you

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own the rights.

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So the important magic words here.

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When you have a contract, when you

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have a services agreement, you

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are the client.

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In this instance, your contractor is

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creating something for you and you

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wanna own a hundred percent of it.

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You wanna make sure you have the magic

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words work for hire, and so those are

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copyright terms, so that it is as if you

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created it yourself.

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Very much like W2 employee, when they

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create something for you, a contractor

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who does something for you as work

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for hire, you're also the owner.

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But because there's some specific

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language regarding work for hire,

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you also have just this assignment

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of all rights just in case it doesn't

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fall into the scope of work for hire.

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Then you also get an assignment of

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all rights as well.

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So that is to make sure that you own

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everything from a contractor.

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Now, if you have a contractor who has

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some preexisting material, so let's

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say for instance you are a coach

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and you hire to create your website.

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Who has like a template for

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coach's websites because it's magic.

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And so they take their template and

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they layer on your branding, your copy.

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So you own that, but you don't own

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that template.

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And so your vendor, your contractor,

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will carve out the preexisting

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materials so you won't own those.

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So those are things that you won't own

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and that are subject to a license.

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So that is the bridge between,

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you have some that is unrestricted

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and some that is restricted.

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If there's any preexisting

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materials that's covered by your

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signed contract.

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So if you don't own it, everything

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else, there are restrictions

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attached to the youth, and so the

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specifics of those restrictions will

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depend on the.

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How you receive them, you whether

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you receive them via an agreement

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that has terms in it, whether

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you receive them without an agreement

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that has implied terms and what

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those terms are.

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Exactly.

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So anything that you don't own,

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there's going to be restrictions.

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So if you've engaged a contractor and

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there's no signed agreement, who

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owns that material?

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The contractor, because the default

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is that the human who created it owns

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it, unless there's something signed

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and in writing.

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And of course any carve-outs even

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if you pay for it, you tell them

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exactly what to do.

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If there's not a signed

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agreement, then the contractor owns it.

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And what you have is you have

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a non-exclusive license to use those

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deliverables for the purpose that

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they're engaged for, but they own

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the copyright.

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So your use is restricted to.

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What you hired them to deliver

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to you and for the purpose that they

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were delivered.

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So for third party materials, let's

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say it's client work, and this

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is both incoming.

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The client has materials that

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they've presented to you to work with,

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so that's incoming as well as outgoing.

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So you've now created something

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for the client and you've delivered

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it to the client.

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Let's go back to this lovely

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language where in this case, you

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are the contractor and your client

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is the one who is getting all of those

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rights in what you created as a work

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made for hire.

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And to the extent it's not a work made

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for hire, you are assigning to your

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client all rights in that deliverable.

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So here you're on the other side

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of that language, and so your client

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owns 100% of those deliverables.

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And I think you know that anyway,

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but that is the language that

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solidifies that.

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And if for whatever reasons you're

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doing work with your clients without

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an agreement, then you do own

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that material.

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Of course I don't recommend that

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for either party's comfort, but that

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is the default.

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And then for licensed materials,

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so let's say you went through a

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certification program and as

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part of that certification

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program, you have a license to use

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the materials.

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Maybe there's a framework that

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they let you use.

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Maybe there are trading

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materials that they let you use.

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Meaning there a evaluation tool

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or an assessment tool that they

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let you use.

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This part of the license every

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license is going to have terms in it.

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It will say like for how long you

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can use it and.

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With whom you can use it.

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Is it for internal purposes only or can

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you sub license it?

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Can you allow third parties to also

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access those same tools and materials,

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or are there restrictions around

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maybe even the type of person that

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you can work with?

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And so you will want to know, you

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understand what's in your license,

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and you're going to wanna make sure

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that the license.

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Covers the use that you need it for.

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Sometimes the license will be too

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narrow for your use.

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I have a client who actually,

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they are licensing information from

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a database and the default license

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limits their ability to use

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that database.

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Like you can't take the information

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from their database and combine it

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with your own information, that's

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the default license.

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But my client actually needs to

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be able to combine it with their

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information cuz it's more powerful.

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They can then, perform whatever

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processing with it in order to

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create insights.

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And so they needed to go back and

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negotiate a broader license to not

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only have access to the data in the

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database, but to be able to integrate

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that data with the data in their own

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databases to get the full value from it.

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Now, does that transfer ownership

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of that data from the licenseor

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to my client who's a licensee?

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No, it does not.

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So the license still governs

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what they can do.

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With the data even permits them to

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combine it, but at the end of that

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term, when they're no longer paying

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for it, they have to remove it from

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their database and return it all

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to the licenseor.

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So you do wanna make sure that,

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don't assume that your license

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covers all the uses that you need.

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where does other come from?

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Probably one of the major ones that's

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people don't really think about is from

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our old employers.

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we leave employment and we

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take some stuff with us, right?

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That we use, that we think aren't

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proprietary.

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but at the end of the day, whether

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or not it's.

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A secret is not determinative of

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whether or not somebody owns it.

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Cuz most materials that are covered

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by copyright are not secret, right?

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Cuz they have to be registered.

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Let's say they have an employee manual.

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So we take that with us and maybe

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we use that and that's not ours.

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That is theirs, it's not yours to use.

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Um, maybe there's some templates

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like, you services agreements people

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might take and those are your

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former employers.

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Property.

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so when we don't have a license, we

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are in danger of infringing a third

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party's copyright.

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So that brings us to our fair use.

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The only time fair use comes up

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is when lawyers are involved.

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So fair use is not something you

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want to rely upon.

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Basically it means you have used

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someone else's intellectual

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property without their permission.

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And they've come to you and said,

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you're infringing my copyright.

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And if you feel like, no, I think

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I have the right to use this without

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your permission because it's fair

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use, that means you're claiming

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that you're not infringing their

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copyright because of fair use.

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So that is not an in affirmative, right?

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That you can receive upfront.

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That's not a safe harbor.

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It's something you have to assert if

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somebody accuses you of infringing

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their copyright.

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that is, our overview, a high

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level overview of how you can use

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an intellectual property that

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flows through your business.

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We talked about the ways that

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it comes in.

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Unless you own it a hundred percent,

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you're going to be some restrictions.

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So you're going to wanna understand

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the terms.

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Of any agreements written or implied,

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you cause you can have implied

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licenses as well.

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Maybe if you got something from

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the internet, we've talked about

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Creative Commons.

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Maybe it's Creative Commons, maybe you

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have a handshake deal and you have

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a non-exclusive license.

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but you need to understand the

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limits of your uses, um, that you.

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Are not in danger of infringing the

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owner's copyright.

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So can the services agreement with

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a contractor be by email?

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the answer to that is, It can

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be by email.

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However, in order for you to own the

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exclusive rights in the deliverables,

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it has to be signed.

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So the transfer of intellectual

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property rights is one of those areas

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of law that you have to have something.

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Signed.

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And so the transfer of real property

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is another one of those areas.

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if you do it digitally by

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email, you it's enforceable,

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so you can make them deliver the

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deliverables to you, and if they breach

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the agreement, you can sue them,

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but you will not get your exclusive

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copyright by email.

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You cannot get that by email.

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Is it fair use if I give credit to the

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original material?

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No, it is not.

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So the copyright owner has the

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exclusive rights to make copies,

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to distribute it, to perform it,

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to display it, whatever the nature

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of the material is.

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That is their exclusive.

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Right.

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And giving credit to them does not.

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Give them that exclusive ride

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that takes away the exclusive, right?

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So if you've used the material

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without permission regardless of

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credit, then you are in breach of their

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copyrights, their exclusive rights

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to what happens with that material.

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Unless you can.

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Successfully assert fair use.

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So if it is fair use, I assume you

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would have given credit, but that is

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not determinative.

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I am actually writing a newsletter

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today as little be on my website,

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a blog post about fair use and what

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the circumstances would be to assert

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and hopefully win a fair use defense.

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Well, thank you all so much for

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joining me today.

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If you have any questions, you can

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always reach me through LinkedIn

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and you can of course access the

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free resources on my podcast website,

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hourly to exit.com.

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Or through my regular website,

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think beyond ip.com, and I look

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forward to it.

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Talking to you again soon.

About the Podcast

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Hourly to Exit

About your host

Profile picture for Erin Austin

Erin Austin

Meet Erin Austin, a Harvard Law alum with over 25 years of copyright and contracts experience. As the go-to advisor for professionals with corporate clients, Erin empowers entrepreneurs to be their own advocates, standing out for her commitment to transforming expertise into empires through the creation, protection and leveraging of intellectual property assets. Explore her blend of legal expertise and entrepreneurial insight on ThinkBeyondIP.com and the "Hourly to Exit" podcast. Off the clock, you'll find Erin in the great outdoors or connecting with business coaches to elevate 6-figure consultants into 7-figure powerhouses.