Hello, ladies.
Welcome to the Hourly to
Exit podcast.
This is a replay of a LinkedIn Live that
I did last year.
Lately, I've been leaning into the
hourly side of the hourly to exit
journey, whereas this time last year,
I was emphasizing the exit side
of the journey.
So I wanted to replay this
because it.
Addresses kind of that early stage,
when you are trying to put the
foundation in place that you need to
grow your business from an unscalable,
oftentimes hourly, one-to-one model,
to a scalable one, to many model.
So before you invest your
precious resources, whether it be in.
Coaches or legal fees or other things
to develop, a one to many offer, whether
that is products, licensing programs,
which, you know, I love certifications
or even something as seemingly simple
as a digital course.
You need to be able to answer three
important questions about the quality
of the intellectual property you
want to use.
One, do I own what I think I own?
Two, if I don't own it, can I use it?
Three.
Am I doing everything I need
to do to protect what I own?
So today's episode explores the
second question, whether or not you
can use something that you didn't
personally create.
So if there's anything in your
business that you are using, Even if
you're currently using it with your
one-on-one clients, it is a separate
question about whether or not you
have the right to include it in your
new scalable offers.
So this is what we'll talk
about today.
Listen and enjoy
We're gonna be talking about
the sources of intellectual
property.
As well as the uses of intellectual
property.
And so this is kind of a master
kind of overview.
We're gonna talk about each of
these elements and basically we'll
be talking about whether or not your
use is unrestricted or if it is
restricted now.
Exactly how your rights may be
restricted, would be dependent upon
the documentation and would be
dependent upon the circumstances, and
therefore giving you an opinion
about whether or not a particular
use is restricted would of course
be legal advice.
I don't give legal advice over
LinkedIn Live.
I will be able to give you some
guidelines about your circumstances
for you to think about whether or not
you have restricted or unrestricted
use with respect to any piece
of intellectual property.
So let's first talk about your sources
of intellectual property.
So where does the intellectual
property that is in your business
flowing through your business?
Where does it come from?
So the sources.
Of course it could be your employees if
you have employees.
I'm talking about your W2 employees,
employees that you are paying
employment taxes for.
Then you have your contractors.
Those are people on your team that are
not your employees, that you have
engaged to create deliverables, and
then you get the IP from other third
parties as well.
Your client can, of course, be a source
of intellectual property.
Oftentimes, our clients will give
us materials that we are to use to
provide services we can get.
Intellectual property from a
licenseor via a license agreement.
And then we can get them from
other sources as well, which we
will talk about.
So how do we use intellectual
property?
And I like to put 'em in these
five buckets.
of course they can all be broken down
further, but the main buckets would
be tools, marketing, client deliverables,
products, and.
Exit.
and of course I'm talking about the
perspective of the service-based
business and when we have a service-based
business, we're are.
Primarily talking about copyrights.
Yes, there's going to be some
trade secrets.
Yes, there's going to be some
trademarks, but for the purpose of
this conversation, we're talking
about copyrights.
So those things that are in writing or
created creatively put intangible
form, photos, graphics, software,
books, trainings, things like that.
So those are the things that we're
talking about during this conversation.
So your tools will be the things that
you use internally.
These are the things that you
use in order to provide services
to your clients.
So those might be your standards
and procedures.
You may have a database, you may
have a resource library frameworks.
You probably have some sort of
productivity tools or things like that.
For marketing, those are things that are
public facing that are not for sale.
So website copy, your lead magnet,
your newsletter, your social media
posts, and you know your speeches or
your slideshow for presentations, you
have your client deliverables.
So you'll notice that client work
is both a source of IP and clients
can also be a use of intellectual
property.
So when we have our deliverables, In
the service-based business, we
are delivering intellectual
property to our clients as well.
And then products would be those
things that we create for sale,
like books, trainings, licensing
program, and then an exit would be in
the event that you sell your business,
can the intellectual property go with it?
So those are the buckets of uses for
our intellectual property.
So top level answer regarding
the unrestricted use of ip.
Do you own it?
Do you own it exclusively?
And if you do, then you have
unrestricted use.
It's.
Really that simple.
If you do not own it exclusively,
then you have restrictions on
how you can use it.
So how do you get exclusive ownership
of intellectual property?
Default under copyright laws
is if the human who created the
intellectual property, who
who created the the copyrighted
Owns it.
So if you created it and it's
original to you, you own a hundred
percent of it.
If your W2 employees created it, then
as the employer you own it, a
hundred percent is the owner.
And then the third is if there's
something in writing, signed
in writing that.
changes that dynamic so that
the creator is not also the owner.
So if you engage a contractor and
you have a written services agreement
with that contractor that assigns the
rights in that copyrighted work
to you, then you are the owner.
And so in those circumstances,
own it.
You have unrestricted
use of it for all those five
buckets of uses, unless you created
those materials.
As part of a service for a client.
So that's gonna be addressed in the
restricted use.
but anything that is created outside of
a client engagement, you own it in these
circumstances, and you have
unrestricted use of that ip.
And then I'm gonna go dig a little bit
deeper regarding the contractor,
because that is by agreement.
So you need to have the right words in
your agreement to make sure that you
own the rights.
So the important magic words here.
When you have a contract, when you
have a services agreement, you
are the client.
In this instance, your contractor is
creating something for you and you
wanna own a hundred percent of it.
You wanna make sure you have the magic
words work for hire, and so those are
copyright terms, so that it is as if you
created it yourself.
Very much like W2 employee, when they
create something for you, a contractor
who does something for you as work
for hire, you're also the owner.
But because there's some specific
language regarding work for hire,
you also have just this assignment
of all rights just in case it doesn't
fall into the scope of work for hire.
Then you also get an assignment of
all rights as well.
So that is to make sure that you own
everything from a contractor.
Now, if you have a contractor who has
some preexisting material, so let's
say for instance you are a coach
and you hire to create your website.
Who has like a template for
coach's websites because it's magic.
And so they take their template and
they layer on your branding, your copy.
So you own that, but you don't own
that template.
And so your vendor, your contractor,
will carve out the preexisting
materials so you won't own those.
So those are things that you won't own
and that are subject to a license.
So that is the bridge between,
you have some that is unrestricted
and some that is restricted.
If there's any preexisting
materials that's covered by your
signed contract.
So if you don't own it, everything
else, there are restrictions
attached to the youth, and so the
specifics of those restrictions will
depend on the.
How you receive them, you whether
you receive them via an agreement
that has terms in it, whether
you receive them without an agreement
that has implied terms and what
those terms are.
Exactly.
So anything that you don't own,
there's going to be restrictions.
So if you've engaged a contractor and
there's no signed agreement, who
owns that material?
The contractor, because the default
is that the human who created it owns
it, unless there's something signed
and in writing.
And of course any carve-outs even
if you pay for it, you tell them
exactly what to do.
If there's not a signed
agreement, then the contractor owns it.
And what you have is you have
a non-exclusive license to use those
deliverables for the purpose that
they're engaged for, but they own
the copyright.
So your use is restricted to.
What you hired them to deliver
to you and for the purpose that they
were delivered.
So for third party materials, let's
say it's client work, and this
is both incoming.
The client has materials that
they've presented to you to work with,
so that's incoming as well as outgoing.
So you've now created something
for the client and you've delivered
it to the client.
Let's go back to this lovely
language where in this case, you
are the contractor and your client
is the one who is getting all of those
rights in what you created as a work
made for hire.
And to the extent it's not a work made
for hire, you are assigning to your
client all rights in that deliverable.
So here you're on the other side
of that language, and so your client
owns 100% of those deliverables.
And I think you know that anyway,
but that is the language that
solidifies that.
And if for whatever reasons you're
doing work with your clients without
an agreement, then you do own
that material.
Of course I don't recommend that
for either party's comfort, but that
is the default.
And then for licensed materials,
so let's say you went through a
certification program and as
part of that certification
program, you have a license to use
the materials.
Maybe there's a framework that
they let you use.
Maybe there are trading
materials that they let you use.
Meaning there a evaluation tool
or an assessment tool that they
let you use.
This part of the license every
license is going to have terms in it.
It will say like for how long you
can use it and.
With whom you can use it.
Is it for internal purposes only or can
you sub license it?
Can you allow third parties to also
access those same tools and materials,
or are there restrictions around
maybe even the type of person that
you can work with?
And so you will want to know, you
understand what's in your license,
and you're going to wanna make sure
that the license.
Covers the use that you need it for.
Sometimes the license will be too
narrow for your use.
I have a client who actually,
they are licensing information from
a database and the default license
limits their ability to use
that database.
Like you can't take the information
from their database and combine it
with your own information, that's
the default license.
But my client actually needs to
be able to combine it with their
information cuz it's more powerful.
They can then, perform whatever
processing with it in order to
create insights.
And so they needed to go back and
negotiate a broader license to not
only have access to the data in the
database, but to be able to integrate
that data with the data in their own
databases to get the full value from it.
Now, does that transfer ownership
of that data from the licenseor
to my client who's a licensee?
No, it does not.
So the license still governs
what they can do.
With the data even permits them to
combine it, but at the end of that
term, when they're no longer paying
for it, they have to remove it from
their database and return it all
to the licenseor.
So you do wanna make sure that,
don't assume that your license
covers all the uses that you need.
where does other come from?
Probably one of the major ones that's
people don't really think about is from
our old employers.
we leave employment and we
take some stuff with us, right?
That we use, that we think aren't
proprietary.
but at the end of the day, whether
or not it's.
A secret is not determinative of
whether or not somebody owns it.
Cuz most materials that are covered
by copyright are not secret, right?
Cuz they have to be registered.
Let's say they have an employee manual.
So we take that with us and maybe
we use that and that's not ours.
That is theirs, it's not yours to use.
Um, maybe there's some templates
like, you services agreements people
might take and those are your
former employers.
Property.
so when we don't have a license, we
are in danger of infringing a third
party's copyright.
So that brings us to our fair use.
The only time fair use comes up
is when lawyers are involved.
So fair use is not something you
want to rely upon.
Basically it means you have used
someone else's intellectual
property without their permission.
And they've come to you and said,
you're infringing my copyright.
And if you feel like, no, I think
I have the right to use this without
your permission because it's fair
use, that means you're claiming
that you're not infringing their
copyright because of fair use.
So that is not an in affirmative, right?
That you can receive upfront.
That's not a safe harbor.
It's something you have to assert if
somebody accuses you of infringing
their copyright.
that is, our overview, a high
level overview of how you can use
an intellectual property that
flows through your business.
We talked about the ways that
it comes in.
Unless you own it a hundred percent,
you're going to be some restrictions.
So you're going to wanna understand
the terms.
Of any agreements written or implied,
you cause you can have implied
licenses as well.
Maybe if you got something from
the internet, we've talked about
Creative Commons.
Maybe it's Creative Commons, maybe you
have a handshake deal and you have
a non-exclusive license.
but you need to understand the
limits of your uses, um, that you.
Are not in danger of infringing the
owner's copyright.
So can the services agreement with
a contractor be by email?
the answer to that is, It can
be by email.
However, in order for you to own the
exclusive rights in the deliverables,
it has to be signed.
So the transfer of intellectual
property rights is one of those areas
of law that you have to have something.
Signed.
And so the transfer of real property
is another one of those areas.
if you do it digitally by
email, you it's enforceable,
so you can make them deliver the
deliverables to you, and if they breach
the agreement, you can sue them,
but you will not get your exclusive
copyright by email.
You cannot get that by email.
Is it fair use if I give credit to the
original material?
No, it is not.
So the copyright owner has the
exclusive rights to make copies,
to distribute it, to perform it,
to display it, whatever the nature
of the material is.
That is their exclusive.
Right.
And giving credit to them does not.
Give them that exclusive ride
that takes away the exclusive, right?
So if you've used the material
without permission regardless of
credit, then you are in breach of their
copyrights, their exclusive rights
to what happens with that material.
Unless you can.
Successfully assert fair use.
So if it is fair use, I assume you
would have given credit, but that is
not determinative.
I am actually writing a newsletter
today as little be on my website,
a blog post about fair use and what
the circumstances would be to assert
and hopefully win a fair use defense.
Well, thank you all so much for
joining me today.
If you have any questions, you can
always reach me through LinkedIn
and you can of course access the
free resources on my podcast website,
hourly to exit.com.
Or through my regular website,
think beyond ip.com, and I look
forward to it.
Talking to you again soon.