Episode 61

E61: Leveraging Intellectual Property: Understanding What You Own and What You Can Use

In this episode, we dive into the topic of using intellectual property in your business. Have you ever wondered if you can use a certain asset or if you truly own what you think you own? 

We explore the importance of ownership and how it relates to asset creation and leverage. Plus, we discuss different sources of intellectual property and the various uses for it.

Here are 3 key takeaways from this episode:

  • Ownership is the key to asset creation and leverage. Understanding whether you own the intellectual property you use is crucial for your business's success.
  • You can use intellectual property that you don't own, but it's important to understand the restrictions and permissions associated with those assets. This includes materials from third parties, clients, and the Internet.
  • Sources of intellectual property in your business can include creations by you, your employees, contractors, and even non-documentary sources like chat platforms. Knowing where your IP comes from helps determine how you can use it.

To learn more about using intellectual property in your business and leveraging it effectively, be sure to tune in to this episode of the Hourly to Exit podcast. And don't forget to subscribe to our email list to access additional resources on this topic.

Happy listening and happy leveraging! 🚀

Connect with Erin to learn how to use intellectual property to increase your income and impact. 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
Erin Austin:

Hello, ladies.

Erin Austin:

Welcome to the

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Hourly Dexit Podcast.

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Today, we're going

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to talk about whether

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or not you can use an

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intellectual property asset.

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as you know, I say

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that IP is everywhere.

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We make it all day, every day.

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As an expert, every time

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you use your intellect,

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you are probably creating

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intellectual property.

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The issue is, do you own it?

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I like to ask, do you own

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what you think you own Cause

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ownership is the key to asset

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creation and asset creation

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is the key to leverage.

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That means you're able to

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decouple your income and

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your impact from your time.

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A closely related to

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the issue of ownership.

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Is use.

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So you may have or have

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access to an asset and wonder

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whether or not you can use it.

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And yes, ownership is key

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to answering the question to

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whether or not you can use it.

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That is the right

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question to ask.

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I sometimes get this

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question in the form of,

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you can I use this book?

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In my course, can I create

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a workshop out of it?

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Can I, make

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worksheets out of it?

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and so this will be a

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conversation about how

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you can use intellectual

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property in your business.

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Certainly, when you own

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it, but also when you

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don't own it, because,

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of course, there is lots

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of intellectual property

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that flows through our

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business that we do not own.

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So we need to understand

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how we can use IP

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that we don't own.

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So, you know, that there is a.

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Symbol graphic that goes

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with this conversation.

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It visualizes the categories

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of sources of intellectual

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property and uses of

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intellectual property

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that I will be discussing.

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you can find a link to that

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graphic in the show notes.

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It is also available in my

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library of free resources

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that are available to

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subscribers at my email list.

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So, lots of good stuff there.

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So I do.

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Of course, highly recommend

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you get on my email list.

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So now let's dig in.

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So first, let's talk about the

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sources of the intellectual

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property that flow through

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your business and what we

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own and therefore what we

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can use or how we can use

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it depends upon the source.

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So the sources first, you,

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things that you create.

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Your employees, and by that

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I mean your W 2 employees,

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you're paying the employment

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taxes, you're withholding

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taxes and paying them.

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Third, contractors.

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So, these are the other

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people that are not your

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W 2 employees, and it

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doesn't how long you work

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with your contractors, how

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wonderful the relationship

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is, if you're not issuing

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them W 2s, then they are

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not employees and they fall

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under the contractor bucket.

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So we have 2 types of

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contractors, those who work

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with a signed agreement

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and those who work without

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a signed agreement.

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And then we have other

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3rd party materials.

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They may be your

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clients materials.

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things that you have licensed

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to you where you're the

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licensee and there are other

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sources, such as the Internet

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or chat and things like that.

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So these are kind of

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undocumented sources.

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And then the uses, I

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put uses in 5 buckets,

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tools, marketing, client

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work, products and exit.

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So those are things that you

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would be able to transfer

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when you sold your business.

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So tools, those are any

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internal resources that

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you use to do the work.

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This could be productivity

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software, your CRM,

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certification materials,

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books, databases,

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frameworks, SOPs.

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Marketing.

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These include any materials

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created for public

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use but not for sale.

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These include lead magnets,

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white papers, your website,

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webinars and speeches,

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social media, posts,

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podcast episodes, email

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newsletters, client work.

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So those are the deliverables

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from the services you

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provide to your clients

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under a services agreement.

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Products, anything for non

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internal use that is for sale,

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including books, software,

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courses, training programs,

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licensed products, meaning

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where you're the licensor,

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such as, train the trainer

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type of licensing program

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and exit that refers to what

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happens to the IP in the event

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of the sale of your business.

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Could the IP asset be

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transferred to the buyer?

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So now we're going to talk

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about the unrestricted

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use of the assets and

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restricted use of assets.

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So first, anything that

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you own, that you have the

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unrestricted rights to,

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you can use for all Or any

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of those five buckets of

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tools, marketing, client

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work products and exit.

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So let's review what

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you own that you have

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unrestricted rights to.

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So you own anything

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that is original.

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So it wasn't based on

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somebody else's work

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and was created outside

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of a client engagement.

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We'll talk about the

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client engagement later.

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That's going to

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be restricted use.

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so those could be created

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by you, of course, by

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your W2 employees, you

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automatically own by law,

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the things that are created

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by your W2 employees in the

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course of their employment.

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So that would be whether

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or not they've signed an

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employment agreement, and

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then by a contractor, but

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the contractor must have

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signed a services agreement

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that grant you all the

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rights and the deliverables.

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And there is some magic

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language that you need in

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your services agreement, work

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for hire language, assignment

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of all rights to the extent

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it's not work for hire.

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And to the extent that it

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is a license materials,

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sometimes contractors

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have their pre existing

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materials, then making sure

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that you have a license to

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do whatever you need to do

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with those deliverables.

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I'm reading this, I'm

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thinking about whether or

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not I've done, A episode

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about services agreements

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that I don't think I have.

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So I think that will

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be the next one.

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in each instance created

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by you, created by your

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W2 employees, created by

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a contractor who signed

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a services agreement that

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granted you all rights in

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the deliverables, you are

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the copyright owner and you

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have unrestricted rights

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to use it for all purposes,

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tools, marketing, client

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work, products, and exit.

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So the exception would be.

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If for some reason against

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my strongest advice, you

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have granted some rights to

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a third party, such as some

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restricted uses in connection.

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Usually this happens

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with non competes.

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So you own something

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It's your expertise.

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You developed it, you own it.

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And then you agree to a

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non compete in the client

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agreement, which basically

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tells you how you can use your

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intellectual property asset.

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You wouldn't let someone tell

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you how you can use your car,

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how you can use your house.

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Don't let anybody tell you how

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you can use your IP assets.

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All right.

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Restricted use.

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So if you aren't the

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exclusive copyright owner,

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there are restrictions on

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how you can use that asset

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and your permitted use

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typically will be set forth

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in a written agreement, or

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it may be deemed through

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intellectual property law in

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the absence of an agreement.

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here are sources where you

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do not own the copyright

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and how you use the IP must

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be determined on a case

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by case basis by either

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the contract or IP law.

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So those are client

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deliverables, whether created

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by you, your employees,

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or your contractors with

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a route signed agreement.

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agreement will dictate

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who owns the deliverable.

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Typically, a client will want

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to own as much as they can.

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And if you're signing,

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whatever they send you without

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looking at it, they're going

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to own 100 percent of those

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deliverables and they might

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even own some of your pre

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existing materials as well.

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So you always want

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to make sure that you

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understand what's there.

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Your contractors without

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a signed agreement.

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I'm gonna explain

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why that would be

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restricted in a minute.

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And then third party

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materials such as those

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where you're the licensee, so

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obviously you don't own it.

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The Licenseor owns the ip, the

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licensee has permission to use

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the ip, and then other sources

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like the internet, et cetera.

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going back to the client

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work, as you know, it was

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in the, use category above

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where, own an asset, you can

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use it with your clients.

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You have the permission to

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use it however you want,

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including with client work,

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and you can grant them rights

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in the IP that you own.

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But it also can be a source

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of intellectual property.

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You as the expert.

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May be commissioned to

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create the asset for a

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client and so you are

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actually creating the asset.

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But if you have assuming

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that you have a sign client

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agreement that vests the

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rights in that deliverable to

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the client, you do not own it.

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And so when the services

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agreement says the

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client owns it, that.

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Means you don't have the

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rights to reuse that or

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use it with other clients.

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you would need permission

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from the client to use

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any client deliverable

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for any other purpose.

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often, the client engagement

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will say that that

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deliverable is confidential

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information of the client.

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So you cannot use it or

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you cannot disclose it,

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for any other purpose.

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Any purpose other than

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connection with that

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engagement with that client.

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So you need to make sure

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you are aware of what

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your client agreements say

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contractor deliverables.

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If you hire a contractor

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to create deliverables

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for you in this instance,

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you're the end client.

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Like you're the client

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you're asking it.

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Them to create it for

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you, or it could be that

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there are subcontractor.

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You have an end client and

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there's some piece of that

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engagement that you need

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to hire subcontractor for

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what you own will depend

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on the existence of.

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And the language in the

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services agreement, you

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enter with the contractor,

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first, you know, always,

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always, always have

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a written agreement.

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if you have a written

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agreement and it includes

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that very important work

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for hire and assignment

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language, then you own it.

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if it's subcontracted,

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then the client work

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rules would apply.

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So I'm going to explain that.

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let's say you're

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the end client.

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You hire a contractor to

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write some copy for your

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website, and you have a

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written agreement that

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says everything that they

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write, you're going to own.

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So you will be the

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Copyright owner.

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And you can do whatever you

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want to with that website

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copy because you own it.

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You can use it in

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marketing materials.

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You can use it

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in your webinars.

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You can use it in a book

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that you write someday.

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that's yours.

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Now let's say it's.

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Subcontracted.

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let's say you're a web

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designer, you're a web

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designer and your, client

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also wanted you to, create

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some niche thing that

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needs a little bit of

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programming, to make it work.

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And so Your client agreement

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says that they will own all

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of the deliverables and then

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you subcontract the programing

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piece to a subcontractor.

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You need to make sure that

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you're getting all the rights

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from that subcontractor via.

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A written agreement with

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the magic work for hire

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assignment language, and

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then that would flow right

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through you to the client.

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So those rights wouldn't

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even stop with you.

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They'd flow right through

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you to the client.

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You get in trouble, of

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course, if you don't have

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that agreement with the

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subcontractor and the client,

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your client agreement says

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that you need to deliver 100

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percent of the rights to the

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client, then you are in breach

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of your client agreement.

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again.

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Always be mindful of

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written agreements whenever

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intellectual property and

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whether or not you think

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of it that way or not,

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whenever deliverables are

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being created by experts,

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you want to make sure that

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they're written agreements

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that tell you who owns the

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deliverables.

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So, if there is no

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written agreement, the

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contractor owns it.

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if no written agreement.

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The human being who creates

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a copyrightable material is

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the copyright owner, unless

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they're your employee or you

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have a written agreement.

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So that contract will own it.

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If you don't have a written

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agreement, what you would

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have is a non-exclusive

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license to use it.

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So that's kind of the

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default under IP law.

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And in this case, the

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contractor is the license or

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the licensors, the party who

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owns the IP and you are the

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licensee, the person who has

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permission to use the IP,

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but you are not the owner.

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you have a not exclusive

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license and not ownership

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in that piece of IP, that

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means the license or.

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in other words, the contractor

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remains free to exploit the

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same intellectual property and

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to allow any number of other

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licensees to also exploit that

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same intellectual property.

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So, if you want to get

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exclusive rights, or you

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want to own it outright

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must be in writing.

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All right.

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The last source would be

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third party materials.

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So where might these

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come from, from your

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former employer?

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know, a lot of us come

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out of corporate and we

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do work similar to what

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we were doing in house.

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And maybe there are some

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things that you created there

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as an employee, but as an

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employee, anything you create

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is owned by the employer.

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So anything you take from

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your former employer is owned

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by your former employer.

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We get stuff off the internet.

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We all do it.

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but we got to think about

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how we're going to use it.

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All the things that we got off

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of the internet, you may go

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to a conference and they hand

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out these great materials.

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You may go to a training and

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you get these great materials.

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Those are all third

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party materials.

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You do not own those.

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And so you need to

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understand what rights

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you have to use them.

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we talked about the

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implied license in the

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contract of context when

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you don't have a written

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agreement, but we also have

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explicit written licenses.

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we enter these all the

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time, with your software

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that you use your

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website host, maybe you,

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Have a certification,

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typically certifications

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will give you a license

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to use some of their

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materials with your clients.

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maybe there's an assessment

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tool that you get to use

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or evaluation tool that you

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get to use and that is owned

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by the certifying entity

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and you as a participant

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have a license to use it,

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but that license Usually,

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we'll have restrictions

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on how you can use it.

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it will be a non

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exclusive license.

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Typically, these

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are all typical.

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Obviously, every license

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is different because there

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are contracts and every

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contract is different.

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But typically, under these

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circumstances, you will have

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a non exclusive license and

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that you will not have the

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right to sub license it.

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And so, if you, get that

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valuation tool from, you

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are certified, by, Institute

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of management consultants,

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and you have a CMC, and

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they provide tools for you.

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That does not mean

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that you can then use

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those tools to create.

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Other materials that you're

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going to sell to 3rd parties

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are licensed to 3rd parties.

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So those 3rd party materials,

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how you can use them.

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Typically, the

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use is restricted.

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and so you will have to look

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on a case by case basis.

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How you can use them

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in those 5 buckets?

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can you use it as a tool?

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I mean, maybe it's,

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licensed to you as a tool.

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So obviously you can use it.

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Can you use it in your

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marketing if it's something

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that is for internal use

Erin Austin:

only, and they don't give

Erin Austin:

you permission to use it in

Erin Austin:

your marketing materials.

Erin Austin:

Like, you can't

Erin Austin:

say I, use this.

Erin Austin:

you can't put it in your

Erin Austin:

marketing that you are using

Erin Austin:

this tool that you got from

Erin Austin:

a 3rd party, then you can't

Erin Austin:

use it in your marketing.

Erin Austin:

typically you

Erin Austin:

can use tools in.

Erin Austin:

Client work, but, there may

Erin Austin:

be restrictions if your client

Erin Austin:

wants to own the deliverable

Erin Austin:

and you're using something

Erin Austin:

that you only have a non

Erin Austin:

exclusive license to, then

Erin Austin:

that would be problematic.

Erin Austin:

I mean, that

Erin Austin:

would be the case.

Erin Austin:

Let's say you are creating a

Erin Austin:

website for someone and you

Erin Austin:

put photographs on there that

Erin Austin:

you don't own the rights to,

Erin Austin:

or that you can't get it.

Erin Austin:

a perpetual rights to that

Erin Austin:

is something that only, you

Erin Austin:

can only use for 1 year for

Erin Austin:

and renewing license fee.

Erin Austin:

Your client's going to be

Erin Austin:

very unhappy that you've

Erin Austin:

delivered this work that it

Erin Austin:

wanted to own a 100%, but

Erin Austin:

you have these short term

Erin Austin:

license materials in there.

Erin Austin:

typically you can't

Erin Austin:

use license materials

Erin Austin:

and products.

Erin Austin:

products would only be

Erin Austin:

things that you own.

Erin Austin:

possible that you have

Erin Austin:

the right to, sub license.

Erin Austin:

Some of those things.

Erin Austin:

Let's say you are

Erin Austin:

creating a book, for

Erin Austin:

instance, and you have.

Erin Austin:

gotten permission from

Erin Austin:

a third party to use a

Erin Austin:

graphic that they have

Erin Austin:

that has, data on it.

Erin Austin:

And you want to include that

Erin Austin:

in your book and you would go

Erin Austin:

to them and get permission.

Erin Austin:

That's what a license is.

Erin Austin:

I want permission to use

Erin Austin:

this graphic in my book.

Erin Austin:

It may or may

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not be for a fee.

Erin Austin:

Typically it would be for a

Erin Austin:

fee if you're making money.

Erin Austin:

They should make money.

Erin Austin:

but, in any case that you

Erin Austin:

would need to make sure that

Erin Austin:

you have the rights to that.

Erin Austin:

That's not something you can

Erin Austin:

do without getting permission.

Erin Austin:

And then with the exit,

Erin Austin:

it would depend again

Erin Austin:

on the nature of the

Erin Austin:

permission to use it.

Erin Austin:

Some things are transferable.

Erin Austin:

Like, if you have a

Erin Austin:

software license, that

Erin Austin:

you typically, you can

Erin Austin:

assign it to the acquirer

Erin Austin:

of your entire business,

Erin Austin:

but there are other things

Erin Austin:

where someone's providing.

Erin Austin:

something that is specific

Erin Austin:

to you, and they would

Erin Austin:

not want you to be able

Erin Austin:

to assign rights in that

Erin Austin:

item to an acquirer.

Erin Austin:

So that really again,

Erin Austin:

the value would be

Erin Austin:

in the things that.

Erin Austin:

Can be transferred to a

Erin Austin:

buyer and those would be the

Erin Austin:

things typically that you

Erin Austin:

own or things that you have a

Erin Austin:

license that is transferable.

Erin Austin:

but that would be

Erin Austin:

restricted and you want

Erin Austin:

to make sure that you,

Erin Austin:

understand the uses there.

Erin Austin:

So, this brings

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us to fair use.

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I'm not going to spend

Erin Austin:

a ton of time on this

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because fair use.

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Very simply, it is a defense.

Erin Austin:

It is not an affirmative right

Erin Austin:

to use somebody else's I.

Erin Austin:

P.

Erin Austin:

A license is an affirmative

Erin Austin:

right to use an I.

Erin Austin:

P.

Erin Austin:

I license or owner of the I.

Erin Austin:

P.

Erin Austin:

give you permission

Erin Austin:

licensee to use this

Erin Austin:

piece of this asset.

Erin Austin:

Fair use would be, If it is

Erin Austin:

deemed to be fair use after

Erin Austin:

an analysis by a federal

Erin Austin:

court that it's fair use, then

Erin Austin:

it would not be considered.

Erin Austin:

An infringement.

Erin Austin:

Well, that means you have

Erin Austin:

to go through the process,

Erin Austin:

if you have an objection,

Erin Austin:

you might use something for

Erin Austin:

fair use and the copyright

Erin Austin:

owner goes, yeah, it looks

Erin Austin:

fair to me and they don't

Erin Austin:

they're fine with it.

Erin Austin:

They're not offended by it.

Erin Austin:

And it's fine.

Erin Austin:

It's fair use.

Erin Austin:

But if they are the

Erin Austin:

only way say that Nope,

Erin Austin:

it's not infringement.

Erin Austin:

It was fair use.

Erin Austin:

Well, that requires a

Erin Austin:

lawsuit in federal court

Erin Austin:

and nobody wants to do that.

Erin Austin:

So, I would be very,

Erin Austin:

very careful about

Erin Austin:

relying on fair use.

Erin Austin:

obviously things like.

Erin Austin:

The nature of the work

Erin Austin:

that you're used to.

Erin Austin:

It's something that's kind

Erin Austin:

of historic facts, is less

Erin Austin:

offensive than something

Erin Austin:

that's highly creative.

Erin Austin:

I'm using something that

Erin Austin:

you're taking a teeny tiny

Erin Austin:

portion of is less offensive

Erin Austin:

than using something.

Erin Austin:

That's like the most

Erin Austin:

recognizable part of the work.

Erin Austin:

if you do something that would

Erin Austin:

effectively replace, the.

Erin Austin:

Original owners work, like,

Erin Austin:

creating a summary of a book.

Erin Austin:

now they don't have to

Erin Austin:

buy the owner's book.

Erin Austin:

that's obviously not

Erin Austin:

going to be fair use.

Erin Austin:

And so just so we're

Erin Austin:

clear, what will never be

Erin Austin:

considered fair use is.

Erin Austin:

Providing credit

Erin Austin:

to the source.

Erin Austin:

that is not the same

Erin Austin:

thing as permission.

Erin Austin:

And so, giving the owner a

Erin Austin:

link or an acknowledgement

Erin Austin:

doesn't matter.

Erin Austin:

That would still be

Erin Austin:

infringement if it's not a

Erin Austin:

fair use and any disclaimers

Erin Austin:

that you didn't intend to

Erin Austin:

commit copyright infringement.

Erin Austin:

Except you did.

Erin Austin:

So if you have any questions

Erin Austin:

about whether you can

Erin Austin:

use somebody else's work,

Erin Austin:

book and ask Aaron call.

Erin Austin:

I look forward to

Erin Austin:

hearing from you.

Erin Austin:

Thanks guys.

About the Podcast

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Hourly to Exit

About your host

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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.