Episode 80
E80: Did You Know That You Are Already Licensing Your IP to Your Clients?
We’re discussing how to spot the hidden license in your client agreements.
In this episode, Erin dives deep into the nuances of protecting your intellectual property with your clients and uncovers the hidden licenses that may exist within your client agreements. Here are 3 key takeaways from the episode:
1. Understanding the Levels of Ownership: Learn about the varying levels of ownership and permissions in copyrights under intellectual property law – from work for hire to assignment and license.
2. Granting Limited Licenses: Discover the importance of limiting the license you grant to your clients for the use of your materials, ensuring it aligns with your compensation and use parameters.
3. Protecting Your Intellectual Property: Gain insights into how to carve out your preexisting materials, clarify the exclusivity of the license, and ensure it is solely for your client's internal use.
Tune in to the full episode on the "Hourly to Exit" podcast to equip yourself with the knowledge needed to protect your intellectual property and navigate client agreements effectively.
Don't miss out on these valuable insights!
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/
Hourly to Exit is Sponsored By:
This week’s episode of Hourly to Exit is sponsored by the NDA Navigator. Non-disclosure agreements (NDAs) are the bedrock of protecting your business's confidential information. However, facing a constant stream of NDAs can be overwhelming, especially when time and budget constraints prevent you from seeking full legal review. That's where the NDA Navigator comes to your rescue. Designed specifically for entrepreneurs, consultants, and business owners with corporate clients, the NDA Navigator is your guide to understanding, negotiating, and implementing NDAs. Empower yourself with legal insights and practical tools when you don’t have the time or funds to invest in a full legal review. Get 20% off by using the coupon code “H2E”. You can find it at www.protectyourexpertise.com.
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,
Speaker:everyone.
Speaker:Welcome to this month's
Speaker:LinkedIn live.
Speaker:I do these every last
Speaker:Wednesday of the month,
Speaker:whether there are four
Speaker:Wednesdays or five Wednesdays
Speaker:like this month, I was
Speaker:shocked by how much time I
Speaker:had to prepare for today's
Speaker:LinkedIn live.
Speaker:And we talk about different
Speaker:topics of interest to
Speaker:experts in the areas of.
Speaker:Contracts and intellectual
Speaker:property and copyrights in
Speaker:particular.
Speaker:And so I do these are
Speaker:recorded and you can
Speaker:find them on my profile.
Speaker:at Aaron Austin and also on
Speaker:my website thing beyond.
Speaker:I.
Speaker:P.
Speaker:do sometimes release these
Speaker:as podcast episodes.
Speaker:My podcast is hourly to exit.
Speaker:and it depends on
Speaker:how clean this recording is.
Speaker:We'll see if this 1 gets
Speaker:on, or if I rerecord it
Speaker:afterwards.
Speaker:So, please do check out
Speaker:those resources as well.
Speaker:If you are listening to
Speaker:this and audio only there
Speaker:are, PowerPoint presentation
Speaker:that has slides.
Speaker:I will be talking you
Speaker:through it, but you're
Speaker:interested, then go find
Speaker:the video.
Speaker:So you can also see the
Speaker:resources for those of
Speaker:you who are here live.
Speaker:I'm happy to take your
Speaker:questions.
Speaker:I'll talk for a bit and
Speaker:then open the floor to your
Speaker:questions and you can post
Speaker:them in the comments at any
Speaker:time, as well.
Speaker:And so let's get to today's
Speaker:topic, which is spotting the
Speaker:hidden license and our client
Speaker:agreements.
Speaker:So what we're going to
Speaker:talk about is particularly
Speaker:how we protect or fail to
Speaker:protect our intellectual
Speaker:property with our clients.
Speaker:And in particular,
Speaker:with our client agreements.
Speaker:So we protect our
Speaker:intellectual property
Speaker:in 2 ways.
Speaker:There is the intellectual
Speaker:property law, which is
Speaker:the default in the U.
Speaker:S.
Speaker:and which applies when
Speaker:you don't have any contracts
Speaker:at all.
Speaker:And so I actually don't
Speaker:have a slide about what
Speaker:happens when you don't
Speaker:have contracts at all.
Speaker:So, if you have questions
Speaker:about that, then ask me
Speaker:about that when we get to the
Speaker:Q and a, and then the other
Speaker:way is with our contracts.
Speaker:So we can change the
Speaker:default through the use of
Speaker:contracts.
Speaker:You know that I like to
Speaker:talk about copyrights
Speaker:in particular because we
Speaker:are experts with corporate
Speaker:clients, the copyrighted
Speaker:works, the things like
Speaker:our trainings, our workshops,
Speaker:our PowerPoint presentations,
Speaker:our courses and books,
Speaker:those are all copyrighted
Speaker:works.
Speaker:The things that are the
Speaker:expression of our expertise.
Speaker:Those are things we
Speaker:protect with copyright.
Speaker:It's different than
Speaker:trademarks.
Speaker:I don't talk about
Speaker:trademarks because,
Speaker:that's not what provides value
Speaker:to our clients.
Speaker:stylized I.
Speaker:P logo on the corner there.
Speaker:I think it's kind of cute,
Speaker:but you get absolutely
Speaker:no value from that.
Speaker:You get the value from the
Speaker:stuff that I.
Speaker:Talk to you about and so
Speaker:we will focus on protecting
Speaker:our copyrighted works when we
Speaker:enter client agreements.
Speaker:And so intellectual
Speaker:property law, just
Speaker:briefly, under copyrights,
Speaker:the human, it always has
Speaker:to start with a human, the
Speaker:human being who creates
Speaker:something original and
Speaker:puts it in a tangible form.
Speaker:They write it down, they
Speaker:record it, photograph it.
Speaker:At the moment of creation,
Speaker:copyright protection
Speaker:attaches, and it is the human
Speaker:who creates it, who is also
Speaker:the owner, and so that is the
Speaker:default, but we can change
Speaker:that through contracts.
Speaker:And so we'll talk
Speaker:about that.
Speaker:in our client agreements
Speaker:there, we're going to talk
Speaker:about the provision
Speaker:specifically, In your client
Speaker:agreements that addresses the
Speaker:contractual provisions
Speaker:that change the default.
Speaker:And so some of the paragraph
Speaker:headings, you will
Speaker:find it under intellectual
Speaker:property is probably the
Speaker:number 1, probably 75
Speaker:percent of the paragraph
Speaker:headings will be intellectual
Speaker:property.
Speaker:but other ones might be
Speaker:deliverables or work product or
Speaker:just ownership.
Speaker:I went through, a couple
Speaker:dozen examples of client
Speaker:agreements that I've worked
Speaker:on just to see what they
Speaker:generally say.
Speaker:And so these are where you
Speaker:will look for the language
Speaker:regarding intellectual
Speaker:property rights in connection
Speaker:with the work that you do for
Speaker:your clients.
Speaker:before we get into a
Speaker:real example that we will.
Speaker:want to just talk about the
Speaker:concepts that we will find
Speaker:in a client agreement
Speaker:in that intellectual
Speaker:property provision.
Speaker:And so these are, the types
Speaker:of ownership.
Speaker:Or permissions that we have
Speaker:in copyrights under
Speaker:intellectual property law.
Speaker:So the highest level, and
Speaker:I'm going to use that term
Speaker:highest level and you'll
Speaker:see why in a minute.
Speaker:well, actually, the highest
Speaker:level isn't even on this
Speaker:slide because when we just
Speaker:do work for ourselves.
Speaker:So I sit down and I write.
Speaker:A post as Aaron Austin,
Speaker:and I am the human being
Speaker:who created it.
Speaker:So I am both the author
Speaker:and I'm also the owner.
Speaker:So I'm the creator and
Speaker:the owner.
Speaker:There's, just 1 human or entity
Speaker:involved in the creation
Speaker:of that copyrighted
Speaker:work.
Speaker:But when we are doing work with
Speaker:3rd parties, when we're
Speaker:doing client work, there's
Speaker:obviously.
Speaker:2 parties involved,
Speaker:there's, you and I as
Speaker:consultants and then there
Speaker:is our client.
Speaker:And so the top level
Speaker:of ownership is the work
Speaker:for hire.
Speaker:the, work for hire means
Speaker:there is.
Speaker:The human being who created
Speaker:it, but there's somebody
Speaker:else who is the owner.
Speaker:There's a 2nd entity who's
Speaker:the owner.
Speaker:So the, classic example is
Speaker:the employee employer
Speaker:relationship, you whether
Speaker:or not there's an agreement
Speaker:in place if I create
Speaker:something as an employee,
Speaker:and I create it in the course
Speaker:of my scope of duties.
Speaker:So I am.
Speaker:the head of H.
Speaker:R.
Speaker:and I write the employment
Speaker:guide, the employee,
Speaker:handbook I created that in
Speaker:the course of my employment.
Speaker:I am the human being who
Speaker:created it, but the author
Speaker:for copyright purposes is
Speaker:my employer and also.
Speaker:The owner, so if we were to
Speaker:look that up at the copyright
Speaker:office, there's only 1 entity
Speaker:listed their employer.
Speaker:I don't appear anywhere
Speaker:on there.
Speaker:I don't even exist for the
Speaker:purposes of the creation
Speaker:of that asset when it's not
Speaker:an employee and it's
Speaker:contractual relationship
Speaker:like.
Speaker:What we have with our
Speaker:clients, then the work for
Speaker:hire concept also exist.
Speaker:You do have to have the
Speaker:magic words work for hire.
Speaker:We'll look at that in
Speaker:a second.
Speaker:, and then when we have that
Speaker:it's in writing and it's signed
Speaker:and it's work for hire.
Speaker:The human being, the
Speaker:consultant is creating it,
Speaker:but the, client is the owner.
Speaker:And again, there's
Speaker:only, they immediately
Speaker:own it as if they created
Speaker:themselves.
Speaker:There's no separation
Speaker:there versus assignment.
Speaker:When there is an assignment,
Speaker:I have the creator.
Speaker:And that is the human, of
Speaker:course, and then I have
Speaker:the person who's going
Speaker:to own it.
Speaker:So, if we were to look
Speaker:at that in the copyright
Speaker:office, there would be the,
Speaker:author, the human, and then
Speaker:the owner would be the separate
Speaker:entity, the client.
Speaker:So, there is actually a
Speaker:transfer of rights from
Speaker:the creator to the owner,
Speaker:and that's the assignment.
Speaker:And then license is
Speaker:the last level where The
Speaker:creator and the owner is
Speaker:the same, but they're giving
Speaker:permission to the 3rd party
Speaker:to use, some or all of my
Speaker:rights that I have in
Speaker:that work.
Speaker:these are the 3 kind
Speaker:of concepts that we will
Speaker:find in.
Speaker:A client agreement, so
Speaker:let's look at a sample this
Speaker:is going to be a very typical
Speaker:provision.
Speaker:it will have this 1st
Speaker:section.
Speaker:not going to read the
Speaker:whole thing to you, but
Speaker:I'm going to point out, the
Speaker:key provisions that we are
Speaker:looking for.
Speaker:So, in this 1st paragraph,
Speaker:it is talking about the
Speaker:rights that contract or
Speaker:use the term contractor
Speaker:instead of consultant
Speaker:here is.
Speaker:Providing to the client,
Speaker:so this refers to the
Speaker:deliverables that the
Speaker:contractor is agreeing
Speaker:that all the deliverables
Speaker:are owned by the client
Speaker:and that the contractor has
Speaker:no rights in it and that it is
Speaker:a work for hire for the client.
Speaker:So that is that 1st level, as
Speaker:soon as it's created by the
Speaker:contractor, It is as if the
Speaker:client created it and they
Speaker:immediately own it and
Speaker:immediately have all the
Speaker:rights under copyright law
Speaker:in that work.
Speaker:However, the bucket of
Speaker:things that can fall under
Speaker:work for hire when it is
Speaker:a contractor relationship
Speaker:versus an employment
Speaker:relationship is actually
Speaker:defined, like, not everything
Speaker:we do qualifies as a work
Speaker:for hire when contractual
Speaker:relationship as opposed to
Speaker:an employment relationship.
Speaker:So there is a bucket of
Speaker:things that it applies to.
Speaker:if it doesn't, for some
Speaker:reason, fall into one of
Speaker:those specific buckets, a
Speaker:work for hire eligible work
Speaker:product, then the assignment
Speaker:comes in because then
Speaker:the client, okay, if it
Speaker:doesn't qualify as a work for
Speaker:hire, I still want to make
Speaker:sure I get all the rights.
Speaker:So if it's not a work
Speaker:for hire.
Speaker:Contractor assigns 100
Speaker:percent of the rights in that
Speaker:deliverable to client.
Speaker:So here, again, the client ends
Speaker:up with all of the rights, but
Speaker:it is through an assignment
Speaker:as opposed through as if
Speaker:they created it themselves.
Speaker:But still they get all the
Speaker:copyrights with the client, and
Speaker:the contractor retains no
Speaker:copyright interest
Speaker:in that deliverable.
Speaker:And then the second,
Speaker:paragraph refers to those
Speaker:elements that the contractor
Speaker:brings to the table.
Speaker:I mean, there's a reason
Speaker:they're coming to you instead
Speaker:of somebody else, because,
Speaker:you have a system, you
Speaker:have a model, or you have,
Speaker:, some research or data or
Speaker:something that you're bringing
Speaker:to the table, and you want to
Speaker:make sure that you continue
Speaker:to own those.
Speaker:Materials, so we want to make
Speaker:sure that we are carving
Speaker:out from, that work for
Speaker:hire and that assignment your
Speaker:pre existing materials.
Speaker:paragraph says you retain
Speaker:ownership in those things.
Speaker:But where is the license?
Speaker:So, the, last part of that
Speaker:sentence is the license
Speaker:that you are granting to
Speaker:your client to use your,
Speaker:materials.
Speaker:Obviously, they have to
Speaker:have a license to use it.
Speaker:Let's say you do A strategic
Speaker:analysis, and as part of
Speaker:that analysis, you're
Speaker:using some preexisting
Speaker:research that you have.
Speaker:You're using some models
Speaker:and templates that you
Speaker:have and you package that
Speaker:together for the deliverable
Speaker:and you present that strategic
Speaker:analysis to your client and
Speaker:so they have to have the right
Speaker:to use, the things that you
Speaker:incorporated in that
Speaker:deliverable.
Speaker:The issue is how broad is
Speaker:that license?
Speaker:This is.
Speaker:Very standard language
Speaker:that you will see from
Speaker:the client.
Speaker:Now, first of all, this one
Speaker:is fairer than a lot of client
Speaker:agreements, because a
Speaker:lot of client drafted
Speaker:agreements won't even have
Speaker:this second.
Speaker:Paragraph in it, it will
Speaker:just be 100 percent of the
Speaker:deliverables.
Speaker:I own it because I'm
Speaker:the client, probably
Speaker:at least 40 percent will
Speaker:also have this 2nd
Speaker:paragraph that acknowledges
Speaker:that you're bringing your
Speaker:own materials to the table
Speaker:and that they simply get a
Speaker:license to it.
Speaker:But let's look at this
Speaker:license.
Speaker:in the middle of the 2nd
Speaker:paragraph, it says contractor
Speaker:hereby grants a client
Speaker:a limited worldwide
Speaker:perpetual irrevocable
Speaker:royalty free, fully paid up
Speaker:transferable right and
Speaker:license to use, execute,
Speaker:reproduce sub license,
Speaker:display, perform,
Speaker:distribute, maintain,
Speaker:create derivative
Speaker:works and make modifications
Speaker:and improvements to
Speaker:the contractor materials.
Speaker:This is very.
Speaker:Common starter language, you
Speaker:know, standard language that
Speaker:you'll get from your client.
Speaker:And so what is wrong
Speaker:with this?
Speaker:you know, we didn't start
Speaker:from the basics of what the
Speaker:bundle of copyrights
Speaker:that you get as a copyright
Speaker:owner, but I'll tell
Speaker:you what they are because
Speaker:they're all right here in
Speaker:this license.
Speaker:the exclusive rights you get
Speaker:as a copyright owner is that
Speaker:you get the exclusive right
Speaker:to reproduce, sub license,
Speaker:display, perform,
Speaker:distribute, create
Speaker:derivatives, and make
Speaker:improvements.
Speaker:Those are your exclusive
Speaker:rights as a copyright
Speaker:owner.
Speaker:And so when you have a
Speaker:license is this broad, even
Speaker:though you have a retaining
Speaker:ownership of that work, you
Speaker:have granted a license to your
Speaker:client that is so broad
Speaker:that they can do anything.
Speaker:Everything that you can do as
Speaker:a copyright owner without
Speaker:coming back to you so they can
Speaker:sub license it.
Speaker:They can create derivatives.
Speaker:They can reproduce it
Speaker:and distribute it without
Speaker:paying you another dime
Speaker:because you have granted
Speaker:them that broad of a license.
Speaker:So, what do we want to do?
Speaker:We want to make sure that we
Speaker:are limiting that license
Speaker:And so just, you know,
Speaker:I probably should do my,
Speaker:disclaimer here.
Speaker:Of course, this is information,
Speaker:legal advice.
Speaker:If you have specific
Speaker:questions about your
Speaker:agreements, talk to a
Speaker:lawyer, but, this is pretty
Speaker:good advice, information.
Speaker:so there are a couple of
Speaker:things that we want to do.
Speaker:First of all, we want to
Speaker:make sure that the grant of
Speaker:license is subject to
Speaker:them paying your fee.
Speaker:What's the difference?
Speaker:So if The grant of license is
Speaker:not subject to paying
Speaker:your fee.
Speaker:You have granted the
Speaker:license so they have the right
Speaker:to do whatever they want
Speaker:to with it.
Speaker:you can do all the things and
Speaker:if they haven't paid you,
Speaker:well, they've breached their
Speaker:contract and you have a
Speaker:contract claim against them.
Speaker:So, they're supposed
Speaker:to pay you.
Speaker:10, 000 and they don't
Speaker:pay it.
Speaker:Well, then you can sue
Speaker:them for the 10, 000.
Speaker:If the grant of the license
Speaker:is subject to payment of your
Speaker:fee and they haven't paid
Speaker:it, that means they don't
Speaker:have a license, which means if
Speaker:they use that deliverable
Speaker:without a license,
Speaker:what is that?
Speaker:That is a copyright
Speaker:infringement.
Speaker:And so then you not only have
Speaker:a, contract breach, you
Speaker:also have all the statutory
Speaker:damages that you get under
Speaker:intellectual property law,
Speaker:because they have infringed
Speaker:your copyright if they haven't
Speaker:paid your compensation.
Speaker:So we want to always
Speaker:have that.
Speaker:this should never be
Speaker:Controversial, when you're
Speaker:asking for this,
Speaker:Typically, they will not agree
Speaker:to it, with respect to the
Speaker:work for hire the assignment,
Speaker:you can try it, there should
Speaker:be no objection to it with
Speaker:respect to the license of your
Speaker:intellectual property,
Speaker:clarifying that it's not
Speaker:exclusive.
Speaker:Frankly, you know, if it
Speaker:doesn't say exclusive, it
Speaker:is by default non exclusive,
Speaker:but, let's be clear.
Speaker:So there's no misunderstanding.
Speaker:Nobody thinks they have
Speaker:an exclusive license.
Speaker:And then we've just cleaned
Speaker:up to make sure that
Speaker:the license that you
Speaker:have granted them in your
Speaker:preexisting material is
Speaker:only, for their use and their
Speaker:use alone.
Speaker:They can't transfer it.
Speaker:They can't sub license it.
Speaker:They can't create
Speaker:derivatives and it is for their
Speaker:internal use.
Speaker:And, you know, I'm making
Speaker:the assumption that the
Speaker:deliverables for their
Speaker:internal use most of the
Speaker:things that we do for
Speaker:clients is, to help them
Speaker:inside their businesses it's
Speaker:not something that they're
Speaker:reselling and so make that
Speaker:very clear in the license
Speaker:so that if they want to
Speaker:do something else with it,
Speaker:they want to use it with,
Speaker:an affiliate, or they want
Speaker:to somehow incorporated
Speaker:in something that they're
Speaker:going to sell.
Speaker:You want to make sure that
Speaker:your fee is consistent with
Speaker:the breadth of the use
Speaker:that they're looking for.
Speaker:these are all very reasonable
Speaker:requests.
Speaker:people often ask me, I don't
Speaker:know if I'm allowed to ask
Speaker:for changes.
Speaker:You are allowed to ask
Speaker:for changes.
Speaker:=, they just need to be
Speaker:reasonable and to be very
Speaker:clear that you're simply
Speaker:trying to protect your
Speaker:intellectual property, but
Speaker:you do want to make sure that
Speaker:they have the rights to do
Speaker:what they need to do with your
Speaker:deliverables.
Speaker:And so, with that, that's
Speaker:what I wanted to talk to
Speaker:you guys about with that.
Speaker:I am happy to take your
Speaker:questions and you can
Speaker:pop them in the chat.
Speaker:and also, you can always
Speaker:find me if you have any follow
Speaker:up questions, on LinkedIn,
Speaker:please feel free to connect
Speaker:with me there and then the
Speaker:recording will also
Speaker:be available there as well.
Speaker:So I'll hang around for a
Speaker:minute to see if you have
Speaker:any questions.
Speaker:Otherwise, I thank you for
Speaker:joining me.
Speaker:All right, guys.
Speaker:Well, thank you again.
Speaker:And if anything comes up, you
Speaker:know where to find me and I
Speaker:look forward to next time.
Speaker:Don't forget, the last
Speaker:Wednesday of every month, at
Speaker:noon Eastern.
Speaker:And I do take requests.
Speaker:So if there's ever a topic
Speaker:that you want me to address,
Speaker:on a live, just shoot it
Speaker:over to me and I'd be happy
Speaker:to do that.
Speaker:Thanks.
Speaker:And then that's, where
Speaker:you can find me as well.
Speaker:I'm online.
Speaker:All right.
Speaker:Thanks guys.
Speaker:See you next month.