All agencies are in the content creation business.

Whether your agency focuses on marketing, advertising, communications, media, digital – or ALL OF IT – the primary way you deliver your benefit is with the creation of some kind of content.

Copy, design, software, strategy, research results – all content.

Wherever there’s content, there’s almost always copyright. And where there is copyright, someone owns or has the legal right to benefit from that copyright.

So how can you be sure who owns the rights to use content?

And what should your agency do when someone else says it owns the content you’ve used, and demands that you 1) stop, 2) pay them, or 3) both of these things?

First, Who Actually Owns Rights in the Content?

This seems like a trick question, right?

In most agency-client relationships, the parties’ intentions are that the client will own all rights in the created end work product (at least most of it). The shorthand usually applied to these expectations is “work for hire,” i.e. “its work for hire for the client.”

The key to reflecting everyone’s intentions accurately is the contract between the parties.

What does your MSA say about work rights ownership? Does it say that the client owns the work product? Are there any conditions to or exclusions from the client’s ownership, like:

• The agency getting paid first (HIGHLY recommended);
• The agency retaining the rights in its preexisting work (methods, systems, technology);
• The agency licensing, rather than selling/assigning the final work product to the client; or
• Any third party work that gets incorporated into the final deliverables, like stock assets?

This is an area of agency-client relationships where intentions and documentation don’t always align.

There are a lot of copyright law rules and implications and rules to consider; however the bottom line is that US copyright law requires that if the agency creates work that the client will own, you need a writing that documents the transfer of the rights between the parties – there is no automatic ownership triggered by payment.

Similarly, if the agency is using freelancers or other contracted parties to contribute to the work product, neither the agency nor the client will automatically own those contributions (again, even if money changed hands) without written documentation of the transfer.

Getting the documentation about work product rights is crucial for the agency in contractor relationships for at least two reasons: 1) you can’t convey to a client what a contractor hasn’t conveyed to the agency and 2) you need the ability to monitor and take corrective action when a contractor displays samples of work created for the agency’s clients.

These are the TOP reasons why I repeatedly stress the importance of addressing this issue in nondisclosure agreements, master service agreements and independent contractor agreements.

If you haven’t evaluated your agreements to make sure they address these matters accurately, it’s time for an update, ASAP.

Next, what do you do when someone makes a claim of ownership to work product?

It’s a normal Tuesday when someone at the agency tells you one of the following things:

• Client XYZCo. got a license fee demand from our stock photography service for a photo we used on their website
• Joe Freelancer put a sample of the creative work he helped us with, in his online portfolio (including the client’s name) without our knowledge
• We just learned the logo we developed for the new corporate identity system for ABCInc. looks exactly like one for another brand on the market, and there’s a cease and desist demand

I’d like to say that these are all fiction. Unfortunately, we’ve seen real-life occurrences of each of these events.

When we help our agency clients navigate their way through these situations, we find that this 5-step formula to respond and react helps to create the time and space needed to work toward a resolution:

Step One – Acknowledge the Demand/Problem/Request. When a third party, like a stock photography house or a third-party trademark owner, contacts your agency (or, worse, your client, who then reaches out angrily to you) about an alleged IP infringement, don’t ignore it or delay in acknowledging it. Acknowledge your receipt of the communication promptly, tell the party reaching out you are investigating the claim, and give them an estimate of the amount of time it will take you to respond to their claim.

Step Two – Investigate the Facts. Gather and review all the information you can relating to how the “problem work” was created – people, dates, communication trails, receipts, contracts or licenses – to determine if and where a problem occurred. This will help expedite your navigating a resolution.

Step Three – Assess Agency Responsibility. Once you’ve gathered your information, the agency’s team – perhaps along with your insurance provider or legal counsel’s participation depending on the claim – should confidentially assess the agency’s potential responsibility for the alleged IP infringement. This is also the stage at which you probably develop your point of view about whether you and the client will work together to resolve a claim made by a third party (usually preferable), or whether the client should take the lead in attempting resolution. Alternately, if a third party like a freelancer engaged in conduct that led to the claim against the agency, this is where you develop a point of view about reaching out to that party to participate in solving the problem.

Step Four – Client Communication. Now it’s time to talk to the client about what your investigation reveals and the strategy you might recommend for resolving the claim. If the agency believes it has some responsibility for a mistake or misguided action, get legal counsel to coach you in these communications. The hopeful outcome from these communications is being on the same page with the client about how to respond to the claim, but even if there are different points of view regarding responsibility between agency and client, there will at least emerge a strategy for the agency’s response to the situation.

Step Five – Create and Share Your Response or Proposed Resolution to the Demand/Problem/Request. The potential options for resolution are too numerous to detail in this post; however the agency’s response could be anything from a denial of responsibility for the claim (to the third party, to your client, or to both), to an apology and an agreement for attribution of the work, to payment of a license fee for a photo that was not licensed correctly, to a full reimagining of the company’s logo, to a damages settlement. Whatever the agency’s initial response, communicating it clearly and in a reasonable amount of time, with sufficient supporting information, is key.

Some of these steps might occur in tandem, and some of them are very quick. Others are trickier because they involve some potentially difficult conversations with your clients or business colleagues. Focus on making continuous forward progress, regardless of pace.

Final Thoughts – and Good News

If your agency has ever found itself on the receiving end of a copyright (or other IP right) infringement claim, you’re in good company. It comes with the territory of being a content creator.

The good news? The more time and attention your team spends on careful due diligence like creating and thoughtfully reviewing license and contract documents to make sure responsibilities are laid out clearly and ownership of work well-defined, the less time it will spend later dealing with an IP claim.

Need help assessing an IP claim, or evaluating your contract documents to make sure IP ownership is well addressed? Contact us to talk about it!