Episode 99
E99: REPLAY: Protecting Your Expertise: Why Copyrights and Contracts Matter
Enjoy this reminder about why copyright protection and contracts are key to growing legally, safely and profitably.
💡 Here are the 3 key takeaways:
- Copyrights are Essential: You cannot scale your expertise-based business without copyright protection. To maximize the value of the materials that your clients actually pay for, such as your trainings, workshops, and custom deliverables, you need the protections provided under copyright law.
- Legal Benefits of Copyright Registration: Registering your copyrights provides significant advantages, including the ability to file lawsuits for infringement, presumed validity of your copyright, and access to statutory damages which simplify the enforcement process.
- Contracts Are Key: Strong contractual agreements with both clients and contractors are essential. These contracts should clearly define ownership rights and restrictions on the use of your intellectual property to prevent unauthorized use (or reuse) and ensure you retain control over your assets.
By incorporating these elements into your business practices, you can protect your intellectual property effectively and leverage it to create a more profitable and sustainable business.
Resources Mentioned:
- U.S. Copyright Office: For registering copyrights and learning more about copyright laws.
- Sample Client and Contractor Agreements: Templates or guidelines for drafting agreements that secure your intellectual property rights.
- Previous Podcast Episode: A reference to the last episode discussing the importance of auditing your business assets.
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
Imagine a clothing store with untagged garments stacked up in the back room.
Speaker:How would you know if you have a size in stock?
Speaker:How would you determine if there is an inventory loss?
Speaker:How would you know what to charge to make a profit?
Speaker:Every day that you don't take inventory of your assets is like that clothing store.
Speaker:You might be in breach of client agreements with non compete provisions.
Speaker:Are subcontractors taking your IP with them?
Speaker:Once your confidential information is shared without an NDA in place,
Speaker:there's no going home again.
Speaker:Do you even own what you think you own?
Speaker:I posed these questions in the last episode where I covered the importance
Speaker:of auditing the assets in your business.
Speaker:It is the first step in the three part framework to turn your
Speaker:expertise into recurring revenue.
Speaker:Audit, protect, and leverage.
Speaker:This week, we're talking about protecting your expertise.
Speaker:Thanks.
Speaker:Once you have a clear understanding of your assets, it's time to protect them.
Speaker:There are two key methods for safeguarding the most valuable
Speaker:intellectual property in your business.
Speaker:Copyright registration and contracts.
Speaker:We're going to dive into the importance of copyright registration
Speaker:in preserving your valuable assets.
Speaker:How contracts can either protect or jeopardize your intellectual
Speaker:property and crafting client and contractor agreements to secure
Speaker:your rights and limit your risks.
Speaker:First, copyright registration.
Speaker:So why am I talking about copyright registration?
Speaker:And you'll never hear me talking about trademark registration.
Speaker:Just as a quick reminder, what are copyrights?
Speaker:So copyright protects original works created by a human.
Speaker:that contain a minimal amount of creativity that's fixed in a
Speaker:tangible medium of expression.
Speaker:When you are the owner of copyrights, you have the exclusive right to reproduce
Speaker:the work, to make derivative works based on that work, such as modifications or
Speaker:adaptations or new uses, the exclusive right to distribute copies of the work
Speaker:either publicly for sale or to license it.
Speaker:And the exclusive right to perform or display the work publicly.
Speaker:So, when we think about protecting our work, and we're worried about
Speaker:competitors or former clients stealing our stuff, what are we talking about?
Speaker:Everyone talks about a trademark, do I need a trademark to protect my
Speaker:ideas, but contrary to popular belief, it's not trademarks that are going
Speaker:to protect your most valuable work.
Speaker:If you want to protect those valuable assets, if you want to
Speaker:protect your moneymakers, copyright registration is what you need.
Speaker:Here's a little example.
Speaker:Let's say you have an HR consultancy and it is called diversity
Speaker:and that's C I T Y diversity.
Speaker:It's a little play on words there talent solutions and it has a
Speaker:trademark registration and diverse city talent solutions provides D
Speaker:E I training to corporate clients.
Speaker:Trademark protects the business name diver city talent solutions.
Speaker:What does the copyright protect?
Speaker:It protects the training materials, the videos, your presentations,
Speaker:the workbooks, the guides.
Speaker:All those things are protected by copyright.
Speaker:Which one provides the most value to your clients?
Speaker:Well, which one provides any value to your clients?
Speaker:In other words, which of those assets does your client pay you money for?
Speaker:Do they pay you money for your trademark or do they pay you money for those
Speaker:trading materials for those videos?
Speaker:It's the assets that are protected by copyright that they're paying you for.
Speaker:Your corporate clients care about the transformation you provide.
Speaker:If you're going to turn their disgruntled employees to a well oiled machine,
Speaker:that's what they're paying you for.
Speaker:They don't get that from your trademark.
Speaker:They get that from your copyrighted materials.
Speaker:So that's what we want to focus on.
Speaker:Now that we've settled on copyrights over trademarks, Why register the copyrights?
Speaker:As we know, copyright protection happens automatically at the time
Speaker:that it is put in that fixed, tangible form of expression.
Speaker:So, yes, it is automatic, but there are significant benefits to
Speaker:registering the work with the U.
Speaker:S.
Speaker:Copyright Office.
Speaker:And there are even greater benefits if it is registered before it is published.
Speaker:It's considered published after you make it available, it's
Speaker:offered to the public in some way.
Speaker:So what extra protection do we get from registration that we don't get
Speaker:automatically under copyright law?
Speaker:One, it enables you to file a lawsuit to enforce the copyright in federal court.
Speaker:If you want to use the court system to get a remedy against an
Speaker:infringer, it must be registered.
Speaker:Also, when you have it registered, it's evidence that you have a valid copyright.
Speaker:Let's say somebody infringes your work, they steal your work, and they claim that
Speaker:they have the valid copyright, not you.
Speaker:If it's been registered, well, that's a non issue.
Speaker:And, of course, it puts others on notice that the work is protected by
Speaker:copyright, that you are the copyright owner, and that you take your
Speaker:rights in those materials seriously.
Speaker:We don't register everything.
Speaker:You probably wrote something today that you posted on LinkedIn or,
Speaker:or some, a blog post or something that you probably won't register.
Speaker:And we'll put our C in a circle.
Speaker:We'll use the copyright notice of a C in a circle on there, but
Speaker:we don't register everything.
Speaker:We want to register our moneymakers because we want to be able to enforce
Speaker:our rights against infringers.
Speaker:So what is the big benefit that we get from registering our copyright?
Speaker:It is statutory damages.
Speaker:So what are statutory damages?
Speaker:They are a form of damages that a court can award in a lawsuit,
Speaker:but the damages are set forth in by law, like in the statute.
Speaker:It's why it's called statutory damages.
Speaker:And so instead of trying to figure out what the actual harm is, what profits
Speaker:were lost, what are my actual damages?
Speaker:That's a whole separate process.
Speaker:But when you have access to statutory damages, it's
Speaker:basically like preset penalties.
Speaker:And so when someone infringes your work, you can just look at the statute
Speaker:and say, this is what they owe me.
Speaker:It makes it much simpler to get a remedy, much less expensive since
Speaker:using lawyers of course is expensive.
Speaker:And it's much greater deterrent because it's kind of difficult
Speaker:sometimes to approve actual damages.
Speaker:But when you have statutory damages, you don't have to bring that proof.
Speaker:And that means that it is much easier for you to get a remedy and therefore a
Speaker:greater deterrent to potential infringers.
Speaker:So, to be clear, you can still protect your work against infringement.
Speaker:You can still go after someone for damages if it's not registered before publication.
Speaker:So, if you have something out there that's already been published and it hasn't
Speaker:been registered, but it is something that you would hire a lawyer to protect
Speaker:your rights against an infringer in a court of law, then those are the things
Speaker:that you want to have registered But you would have to prove actual damages.
Speaker:You'd have to say, I was selling 10 copies of this a week at 500 a pop, and
Speaker:they have been ever since they infringed it and started selling it on their own.
Speaker:I haven't had any sales.
Speaker:And therefore, this is what my damages are.
Speaker:It's a little harder to prove that than to be able to look to the statute and
Speaker:just say, they sold 50 copies of my work.
Speaker:And therefore, these are what my damages are.
Speaker:So what are those statutory damages?
Speaker:Well, it depends on the gravity of the infringement as well
Speaker:as the infringer's intent.
Speaker:So, for innocent infringements, like, sometimes we steal things.
Speaker:We don't even realize it.
Speaker:That does happen.
Speaker:Unintentional infringement.
Speaker:Our subconscious remembers something we think it's original, but it
Speaker:is actually an infringement.
Speaker:So if you can show that you weren't aware, you had no reason to believe
Speaker:that was an infringement, then the damages can be as low as 200 per
Speaker:infringing work, but it can go up.
Speaker:If you should have known, it can go up from 750 to 3, 000 per work infringed.
Speaker:And if it was willful infringement, you absolutely know.
Speaker:Someone steals your entire website and they start selling it as their own.
Speaker:And when you tell them to stop doing it, they don't stop doing it.
Speaker:It's a willful infringement.
Speaker:The damages can be as up to 150, 000 per work infringed.
Speaker:So those are statutory damages.
Speaker:And these are some of the benefits that you get under intellectual
Speaker:property law when you register a work as copyright registration with the U.
Speaker:S.
Speaker:Copyright Office.
Speaker:Contracts is the other way that we protect our copyrights.
Speaker:Registration that helps us and takes care of infringers, but you know what,
Speaker:mostly people don't just steal our stuff.
Speaker:The number 1 way that we lose rights in our intellectual property is
Speaker:by not using contracts or signing contracts that we do not understand.
Speaker:All right, so intellectual property law takes care of infringers, but
Speaker:most people don't lose rights in their IP because of infringers.
Speaker:It's more likely that we will lose control over intellectual property because we
Speaker:are not using contracts or we're signing contracts that we do not understand.
Speaker:And that is just a self-inflicted wound.
Speaker:Unlike physical assets, ownership of intellectual property has nothing
Speaker:to do with possession or whose idea it was, or even who paid for it.
Speaker:If we want to make sure we are maximizing the value of our assets,
Speaker:we need to use our contracts in order to make sure that we control
Speaker:the use and get paid for its use.
Speaker:So we cannot skip the contracts step.
Speaker:We need contracts with our clients to limit their ability to reuse or even
Speaker:distribute our proprietary materials, and we need contracts with our contractors
Speaker:to make sure that we have rights in everything that they deliver to you.
Speaker:So, when we think about our client contracts, if you're regularly
Speaker:signing contracts provided by your corporate clients, those agreements
Speaker:will absolutely have language about who owns the deliverables.
Speaker:And you want to make sure that there is language in there so that you retain
Speaker:rights in your preexisting property.
Speaker:If they're coming to you, chances are you have preexisting property that they value.
Speaker:What is the distinguisher between you, like, take the HR consultant,
Speaker:the difference between you and another HR consultant will probably
Speaker:be your preexisting materials that you have developed workshops that
Speaker:you've developed trainings that you've developed guides that are
Speaker:more effective than the next guys.
Speaker:And that's why they're coming to you.
Speaker:And we want to make sure that you are preserving the rights in those works.
Speaker:And if you're signing a standard client agreement, then you are
Speaker:endangering your rights in those works.
Speaker:Also with our contractor agreements, the agreements that we signed with
Speaker:people, when we are the client, we want to make sure that we have
Speaker:the rights, the ownership, and all the things that they do for us.
Speaker:In the absence of a written agreement that is signed and not by email, but
Speaker:actually signed, it can be, you know, an e signature, but something that
Speaker:is an enforceable signature, if we don't have that in place, then the
Speaker:human who created it still owns it.
Speaker:So, if someone is creating something for you that you will be using with your
Speaker:client or you'll be using it in your business to build some assets on, you
Speaker:want to make sure you own those things.
Speaker:You want to make sure you have contractor agreements in place that are signed.
Speaker:Signed agreements are the only way to overwrite the default provisions
Speaker:regarding ownership and licenses under intellectual property law.
Speaker:So, if you don't have signed agreements with your clients, then your clients may
Speaker:have an unlimited license to use your pre existing materials, if not own it.
Speaker:So, those are the two dangers and no agreements with your contractors.
Speaker:They may own some very important piece of your methodology or framework.
Speaker:Now, in an AI world, we have even more risks associated with
Speaker:oral or unsigned agreements.
Speaker:And again, I'm including email in that.
Speaker:If we don't have signed agreements, we can't get assurances regarding the work
Speaker:that is delivered by our contractors.
Speaker:We want to make sure that we have representations from our contractors
Speaker:regarding the originality of what they're delivering to us, and that it does
Speaker:not infringe any third parties rights.
Speaker:So, in our standard contractor agreement, you will want to have
Speaker:language that says that contractors work is original, unpublished,
Speaker:and solely their own work product.
Speaker:And that as delivered to you and used by you, it will not violate any
Speaker:laws or violate any third party's intellectual property rights.
Speaker:When we have someone using AI, we don't get any of those
Speaker:assurances when you use AI.
Speaker:That is buyer beware, user beware with regarding anything
Speaker:that is generated by AI.
Speaker:So if you have a contractor where you care about the originality and
Speaker:that you have full ownership of those deliverables, you want to have the
Speaker:contractor agreement in place and you want to have language in there
Speaker:about whether or not they can use AI.
Speaker:If you don't want your contractor to use AI, make sure the agreement says that.
Speaker:If you're okay with a contractor using some AI, so long as it's disclosed to you,
Speaker:then make sure that's in the agreement.
Speaker:And most importantly, always be mindful of how a deliverable
Speaker:from a contractor will be used.
Speaker:So that you can make sure that that agreement includes all of those
Speaker:rights that you have in there.
Speaker:Let's say you have an agreement with a contractor and they have language that
Speaker:says, I'm gonna be using my pre-existing framework, and it will say, you as
Speaker:the client can use it, but you cannot sub-license it to any third party.
Speaker:But your intent was for this to be used with your own end client.
Speaker:You have to make sure that there's language in there about that.
Speaker:So, the end result is in some, we really want to make sure that we don't end up on
Speaker:the receiving end of a cease and desist letter because we don't get all the rights
Speaker:from our contractors that we need, that we don't end up at the receiving end of
Speaker:a cease and desist letter because we have granted exclusive rights and materials.
Speaker:To one client that we need to use with other clients and at best I wasted money.
Speaker:Maybe you need to refund money and at worst you could end up with an
Speaker:infringement claim and you could have some permanent damage to your reputation.
Speaker:Certainly if you turn in something to a client that turns out that it was created
Speaker:by AI, that could be a real mess for you.
Speaker:So we want to make sure that that doesn't happen.
Speaker:IP is everywhere in particular.
Speaker:Your IP is everywhere.
Speaker:So we want to make sure that we use copyright protection and we're
Speaker:using contracts to make sure that you own it and that you control it.
Speaker:So that brings us to the third and final leg of building a scalable and
Speaker:salable expertise based business.
Speaker:That is leverage.
Speaker:So leverage means increasing profitability, not just
Speaker:increasing revenue.
Speaker:What does that mean?
Speaker:We have leverage in our business.
Speaker:If we can increase our revenue without increasing the cost to get that revenue
Speaker:that increases profitability, or we can decrease cost without also decreasing the
Speaker:revenue or both in the best of both words.
Speaker:That means we are applying leverage so that we have a more profitable
Speaker:business, meaning there's more distance between revenue and costs.
Speaker:And yes, you can have leveraged one on one services.
Speaker:So if you want to find out more, make sure you check out the next
Speaker:episode of the hourly exit podcast.
Speaker:Thank you ladies.
Speaker:And remember IP is fuel.
