Alex Bruda – Courtesy RGB Stock

As discussed in our last post about nondisclosure agreements, when developing a new client-Agency relationship, there are several distinct advantages to having an NDA (nondisclosure agreement) before starting with a new client. That is, IF you can get your prospective client to sign one.

But what if your Creative Agency has decided to pursue a new business opportunity without a nondisclosure agreement, or has signed an NDA that doesn’t address rights ownership issues? How does an Agency protect its intellectual property (IP) during the new business discovery process, since your potential client will undoubtedly learn some of your concepts, processes and procedures – perhaps even “industry secret” ones?

Fortunately, there are a few ways to handle the Agency’s IP without an NDA when working with a new client.

Fortunately, there are a few ways to handle your IP without an NDA when working with a new client.

Use the copyright law to help.

Copyright law can be a very helpful tool for your Agency during the new business process. But it only protects actual deliverables or assets where the original intellectual property is expressed in a tangible way (think of written proposals, storyboards, concept pieces in print or video, proprietary processes demonstrated in words, graphs or pictures, you get the idea…..).

Here are the main ways you can leverage the protective power of Copyright Law:

• Express as many of your concepts and ideas as is practically possible in some tangible form.
• Put copyright notices and simple rights ownership language on the created assets, and in your written proposal documents.
• Where possible, keep assets that contain Agency proprietary methods, processes, or nomenclature in separate files or documents, so they’re easier to distinguish.
• Keep careful track of the distribution of your proposals and “pitch materials.” Password-protect them, limit actual physical copies, log their “traffic” – the idea is not to make your creative team feel like librarians, but to set the tone internally, and externally, that the creative (and created) materials are valuable property and should be treated that way.

Negotiate rights and compensation issues for new business “Pitch Materials” in advance.

A growing trend in the creative services industry is for the parties to agree, prior to the Agency creating a proposal or any concept materials, or prior to discussing its ideas with the prospective client, that the client will own the rights to whatever Agency work is created during the new business process, for a pre-set fee. This is sometimes called a “Pitch Fee,” but it can have other names too, such as a “License Fee.”

While this kind of compensation is usually not enough to make the Agency whole for its costs during business development, the Pitch or License Fee does defray the costs, and settles the rights ownership in advance between the Agency and its potential new client.

In some cases, the parties agree to a pitch fee only for physical ownership of the created concept assets – with an agreement to negotiate later on for the additional fees for executed campaigns, work, or deliverables. If the Agency takes this route, it’s important to do these things:

• Be as clear and specific as possible about what rights will be covered for the Pitch Fee. Is the fee for physical asset ownership only? Does the prospective client have the rights to copy and execute on ideation with another Agency? Spell out these rights and obligations as best you can.
• If your Agency has a process that you consider proprietary, or other Agency-developed intellectual property such as special nomenclature or methods (and many Agencies do), think twice before including any of it in any of the delivered pitch materials.
• Also, consider using language in your Pitch Fee agreement that carves out any Agency proprietary work in order to clearly protect that material as off-limits.

Stake your claim to the valued IP your Agency develops, and then decide when and with whom you’ll share it and under what conditions. Your IP is your currency – be proactive to protect it.