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Imagine a clothing store with untagged
garments stacked up in the back room.

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How would you know if
you have a size in stock?

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How would you determine if
there is an inventory loss?

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How would you know what to
charge to make a profit?

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Every day that you don't take inventory of
your assets is like that clothing store.

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You might be in breach of client
agreements with non compete provisions.

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Are subcontractors
taking your IP with them?

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Once your confidential information
is shared without an NDA in place,

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there's no going home again.

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Do you even own what you think you own?

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I posed these questions in the last
episode where I covered the importance

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of auditing the assets in your business.

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It is the first step in the
three part framework to turn your

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expertise into recurring revenue.

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Audit, protect, and leverage.

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This week, we're talking about
protecting your expertise.

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Thanks.

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Once you have a clear understanding of
your assets, it's time to protect them.

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There are two key methods for
safeguarding the most valuable

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intellectual property in your business.

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Copyright registration and contracts.

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We're going to dive into the
importance of copyright registration

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in preserving your valuable assets.

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How contracts can either protect
or jeopardize your intellectual

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property and crafting client and
contractor agreements to secure

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your rights and limit your risks.

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First, copyright registration.

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So why am I talking about
copyright registration?

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And you'll never hear me talking
about trademark registration.

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Just as a quick reminder,
what are copyrights?

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So copyright protects original
works created by a human.

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that contain a minimal amount
of creativity that's fixed in a

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tangible medium of expression.

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When you are the owner of copyrights,
you have the exclusive right to reproduce

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the work, to make derivative works based
on that work, such as modifications or

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adaptations or new uses, the exclusive
right to distribute copies of the work

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either publicly for sale or to license it.

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And the exclusive right to perform
or display the work publicly.

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So, when we think about protecting
our work, and we're worried about

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competitors or former clients stealing
our stuff, what are we talking about?

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Everyone talks about a trademark,
do I need a trademark to protect my

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ideas, but contrary to popular belief,
it's not trademarks that are going

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to protect your most valuable work.

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If you want to protect those
valuable assets, if you want to

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protect your moneymakers, copyright
registration is what you need.

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Here's a little example.

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Let's say you have an HR consultancy
and it is called diversity

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and that's C I T Y diversity.

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It's a little play on words there
talent solutions and it has a

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trademark registration and diverse
city talent solutions provides D

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E I training to corporate clients.

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Trademark protects the business
name diver city talent solutions.

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What does the copyright protect?

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It protects the training materials,
the videos, your presentations,

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the workbooks, the guides.

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All those things are
protected by copyright.

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Which one provides the
most value to your clients?

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Well, which one provides
any value to your clients?

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In other words, which of those assets
does your client pay you money for?

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Do they pay you money for your trademark
or do they pay you money for those

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trading materials for those videos?

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It's the assets that are protected by
copyright that they're paying you for.

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Your corporate clients care about
the transformation you provide.

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If you're going to turn their disgruntled
employees to a well oiled machine,

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that's what they're paying you for.

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They don't get that from your trademark.

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They get that from your
copyrighted materials.

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So that's what we want to focus on.

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Now that we've settled on copyrights over
trademarks, Why register the copyrights?

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As we know, copyright protection
happens automatically at the time

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that it is put in that fixed,
tangible form of expression.

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So, yes, it is automatic, but
there are significant benefits to

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registering the work with the U.

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S.

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Copyright Office.

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And there are even greater benefits if
it is registered before it is published.

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It's considered published after
you make it available, it's

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offered to the public in some way.

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So what extra protection do we get
from registration that we don't get

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automatically under copyright law?

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One, it enables you to file a lawsuit to
enforce the copyright in federal court.

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If you want to use the court
system to get a remedy against an

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infringer, it must be registered.

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Also, when you have it registered, it's
evidence that you have a valid copyright.

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Let's say somebody infringes your work,
they steal your work, and they claim that

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they have the valid copyright, not you.

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If it's been registered,
well, that's a non issue.

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And, of course, it puts others on
notice that the work is protected by

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copyright, that you are the copyright
owner, and that you take your

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rights in those materials seriously.

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We don't register everything.

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You probably wrote something today
that you posted on LinkedIn or,

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or some, a blog post or something
that you probably won't register.

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And we'll put our C in a circle.

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We'll use the copyright notice
of a C in a circle on there, but

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we don't register everything.

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We want to register our moneymakers
because we want to be able to enforce

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our rights against infringers.

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So what is the big benefit that we
get from registering our copyright?

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It is statutory damages.

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So what are statutory damages?

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They are a form of damages that
a court can award in a lawsuit,

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but the damages are set forth
in by law, like in the statute.

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It's why it's called statutory damages.

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And so instead of trying to figure out
what the actual harm is, what profits

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were lost, what are my actual damages?

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That's a whole separate process.

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But when you have access
to statutory damages, it's

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basically like preset penalties.

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And so when someone infringes your
work, you can just look at the statute

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and say, this is what they owe me.

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It makes it much simpler to get a
remedy, much less expensive since

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using lawyers of course is expensive.

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And it's much greater deterrent
because it's kind of difficult

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sometimes to approve actual damages.

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But when you have statutory damages,
you don't have to bring that proof.

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And that means that it is much easier
for you to get a remedy and therefore a

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greater deterrent to potential infringers.

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So, to be clear, you can still protect
your work against infringement.

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You can still go after someone for damages
if it's not registered before publication.

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So, if you have something out there that's
already been published and it hasn't

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been registered, but it is something
that you would hire a lawyer to protect

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your rights against an infringer in a
court of law, then those are the things

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that you want to have registered But
you would have to prove actual damages.

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You'd have to say, I was selling 10
copies of this a week at 500 a pop, and

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they have been ever since they infringed
it and started selling it on their own.

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I haven't had any sales.

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And therefore, this is
what my damages are.

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It's a little harder to prove that than
to be able to look to the statute and

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just say, they sold 50 copies of my work.

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And therefore, these
are what my damages are.

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So what are those statutory damages?

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Well, it depends on the gravity
of the infringement as well

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as the infringer's intent.

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So, for innocent infringements,
like, sometimes we steal things.

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We don't even realize it.

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That does happen.

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Unintentional infringement.

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Our subconscious remembers something
we think it's original, but it

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is actually an infringement.

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So if you can show that you weren't
aware, you had no reason to believe

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that was an infringement, then the
damages can be as low as 200 per

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infringing work, but it can go up.

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If you should have known, it can go up
from 750 to 3, 000 per work infringed.

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And if it was willful
infringement, you absolutely know.

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Someone steals your entire website and
they start selling it as their own.

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And when you tell them to stop
doing it, they don't stop doing it.

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It's a willful infringement.

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The damages can be as up to
150, 000 per work infringed.

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So those are statutory damages.

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And these are some of the benefits
that you get under intellectual

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property law when you register a work
as copyright registration with the U.

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S.

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Copyright Office.

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Contracts is the other way
that we protect our copyrights.

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Registration that helps us and takes
care of infringers, but you know what,

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mostly people don't just steal our stuff.

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The number 1 way that we lose rights
in our intellectual property is

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by not using contracts or signing
contracts that we do not understand.

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All right, so intellectual property
law takes care of infringers, but

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most people don't lose rights in
their IP because of infringers.

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It's more likely that we will lose control
over intellectual property because we

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are not using contracts or we're signing
contracts that we do not understand.

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And that is just a self-inflicted wound.

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Unlike physical assets, ownership
of intellectual property has nothing

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to do with possession or whose idea
it was, or even who paid for it.

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If we want to make sure we are
maximizing the value of our assets,

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we need to use our contracts in
order to make sure that we control

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the use and get paid for its use.

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So we cannot skip the contracts step.

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We need contracts with our clients to
limit their ability to reuse or even

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distribute our proprietary materials, and
we need contracts with our contractors

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to make sure that we have rights in
everything that they deliver to you.

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So, when we think about our client
contracts, if you're regularly

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signing contracts provided by your
corporate clients, those agreements

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will absolutely have language
about who owns the deliverables.

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And you want to make sure that there
is language in there so that you retain

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rights in your preexisting property.

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If they're coming to you, chances are you
have preexisting property that they value.

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What is the distinguisher between
you, like, take the HR consultant,

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the difference between you and
another HR consultant will probably

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be your preexisting materials that
you have developed workshops that

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you've developed trainings that
you've developed guides that are

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more effective than the next guys.

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And that's why they're coming to you.

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And we want to make sure that you are
preserving the rights in those works.

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And if you're signing a standard
client agreement, then you are

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endangering your rights in those works.

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Also with our contractor agreements,
the agreements that we signed with

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people, when we are the client,
we want to make sure that we have

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the rights, the ownership, and all
the things that they do for us.

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In the absence of a written agreement
that is signed and not by email, but

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actually signed, it can be, you know,
an e signature, but something that

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is an enforceable signature, if we
don't have that in place, then the

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human who created it still owns it.

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So, if someone is creating something
for you that you will be using with your

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client or you'll be using it in your
business to build some assets on, you

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want to make sure you own those things.

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You want to make sure you have contractor
agreements in place that are signed.

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Signed agreements are the only way
to overwrite the default provisions

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regarding ownership and licenses
under intellectual property law.

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So, if you don't have signed agreements
with your clients, then your clients may

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have an unlimited license to use your
pre existing materials, if not own it.

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So, those are the two dangers and
no agreements with your contractors.

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They may own some very important piece
of your methodology or framework.

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Now, in an AI world, we have
even more risks associated with

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oral or unsigned agreements.

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And again, I'm including email in that.

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If we don't have signed agreements, we
can't get assurances regarding the work

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that is delivered by our contractors.

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We want to make sure that we have
representations from our contractors

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regarding the originality of what they're
delivering to us, and that it does

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not infringe any third parties rights.

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So, in our standard contractor
agreement, you will want to have

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language that says that contractors
work is original, unpublished,

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and solely their own work product.

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And that as delivered to you and
used by you, it will not violate any

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laws or violate any third party's
intellectual property rights.

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When we have someone using
AI, we don't get any of those

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assurances when you use AI.

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That is buyer beware, user
beware with regarding anything

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that is generated by AI.

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So if you have a contractor where
you care about the originality and

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that you have full ownership of those
deliverables, you want to have the

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contractor agreement in place and
you want to have language in there

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about whether or not they can use AI.

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If you don't want your contractor to use
AI, make sure the agreement says that.

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If you're okay with a contractor using
some AI, so long as it's disclosed to you,

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then make sure that's in the agreement.

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And most importantly, always
be mindful of how a deliverable

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from a contractor will be used.

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So that you can make sure that that
agreement includes all of those

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rights that you have in there.

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Let's say you have an agreement with a
contractor and they have language that

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says, I'm gonna be using my pre-existing
framework, and it will say, you as

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the client can use it, but you cannot
sub-license it to any third party.

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But your intent was for this to
be used with your own end client.

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You have to make sure that there's
language in there about that.

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So, the end result is in some, we really
want to make sure that we don't end up on

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the receiving end of a cease and desist
letter because we don't get all the rights

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from our contractors that we need, that
we don't end up at the receiving end of

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a cease and desist letter because we have
granted exclusive rights and materials.

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To one client that we need to use with
other clients and at best I wasted money.

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Maybe you need to refund money and
at worst you could end up with an

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infringement claim and you could have
some permanent damage to your reputation.

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Certainly if you turn in something to a
client that turns out that it was created

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by AI, that could be a real mess for you.

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So we want to make sure
that that doesn't happen.

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IP is everywhere in particular.

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Your IP is everywhere.

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So we want to make sure that we
use copyright protection and we're

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using contracts to make sure that
you own it and that you control it.

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So that brings us to the third and
final leg of building a scalable and

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salable expertise based business.

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That is leverage.

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So leverage means increasing
profitability, not just

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increasing revenue.

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What does that mean?

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We have leverage in our business.

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If we can increase our revenue without
increasing the cost to get that revenue

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that increases profitability, or we can
decrease cost without also decreasing the

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revenue or both in the best of both words.

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That means we are applying leverage
so that we have a more profitable

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business, meaning there's more
distance between revenue and costs.

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And yes, you can have
leveraged one on one services.

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So if you want to find out more,
make sure you check out the next

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episode of the hourly exit podcast.

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Thank you ladies.

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And remember IP is fuel.