Erin Austin: Hello,
everyone.
Welcome to this month's
LinkedIn live.
I do these every last
Wednesday of the month,
whether there are four
Wednesdays or five Wednesdays
like this month, I was
shocked by how much time I
had to prepare for today's
LinkedIn live.
And we talk about different
topics of interest to
experts in the areas of.
Contracts and intellectual
property and copyrights in
particular.
And so I do these are
recorded and you can
find them on my profile.
at Aaron Austin and also on
my website thing beyond.
I.
P.
do sometimes release these
as podcast episodes.
My podcast is hourly to exit.
and it depends on
how clean this recording is.
We'll see if this 1 gets
on, or if I rerecord it
afterwards.
So, please do check out
those resources as well.
If you are listening to
this and audio only there
are, PowerPoint presentation
that has slides.
I will be talking you
through it, but you're
interested, then go find
the video.
So you can also see the
resources for those of
you who are here live.
I'm happy to take your
questions.
I'll talk for a bit and
then open the floor to your
questions and you can post
them in the comments at any
time, as well.
And so let's get to today's
topic, which is spotting the
hidden license and our client
agreements.
So what we're going to
talk about is particularly
how we protect or fail to
protect our intellectual
property with our clients.
And in particular,
with our client agreements.
So we protect our
intellectual property
in 2 ways.
There is the intellectual
property law, which is
the default in the U.
S.
and which applies when
you don't have any contracts
at all.
And so I actually don't
have a slide about what
happens when you don't
have contracts at all.
So, if you have questions
about that, then ask me
about that when we get to the
Q and a, and then the other
way is with our contracts.
So we can change the
default through the use of
contracts.
You know that I like to
talk about copyrights
in particular because we
are experts with corporate
clients, the copyrighted
works, the things like
our trainings, our workshops,
our PowerPoint presentations,
our courses and books,
those are all copyrighted
works.
The things that are the
expression of our expertise.
Those are things we
protect with copyright.
It's different than
trademarks.
I don't talk about
trademarks because,
that's not what provides value
to our clients.
stylized I.
P logo on the corner there.
I think it's kind of cute,
but you get absolutely
no value from that.
You get the value from the
stuff that I.
Talk to you about and so
we will focus on protecting
our copyrighted works when we
enter client agreements.
And so intellectual
property law, just
briefly, under copyrights,
the human, it always has
to start with a human, the
human being who creates
something original and
puts it in a tangible form.
They write it down, they
record it, photograph it.
At the moment of creation,
copyright protection
attaches, and it is the human
who creates it, who is also
the owner, and so that is the
default, but we can change
that through contracts.
And so we'll talk
about that.
in our client agreements
there, we're going to talk
about the provision
specifically, In your client
agreements that addresses the
contractual provisions
that change the default.
And so some of the paragraph
headings, you will
find it under intellectual
property is probably the
number 1, probably 75
percent of the paragraph
headings will be intellectual
property.
but other ones might be
deliverables or work product or
just ownership.
I went through, a couple
dozen examples of client
agreements that I've worked
on just to see what they
generally say.
And so these are where you
will look for the language
regarding intellectual
property rights in connection
with the work that you do for
your clients.
before we get into a
real example that we will.
want to just talk about the
concepts that we will find
in a client agreement
in that intellectual
property provision.
And so these are, the types
of ownership.
Or permissions that we have
in copyrights under
intellectual property law.
So the highest level, and
I'm going to use that term
highest level and you'll
see why in a minute.
well, actually, the highest
level isn't even on this
slide because when we just
do work for ourselves.
So I sit down and I write.
A post as Aaron Austin,
and I am the human being
who created it.
So I am both the author
and I'm also the owner.
So I'm the creator and
the owner.
There's, just 1 human or entity
involved in the creation
of that copyrighted
work.
But when we are doing work with
3rd parties, when we're
doing client work, there's
obviously.
2 parties involved,
there's, you and I as
consultants and then there
is our client.
And so the top level
of ownership is the work
for hire.
the, work for hire means
there is.
The human being who created
it, but there's somebody
else who is the owner.
There's a 2nd entity who's
the owner.
So the, classic example is
the employee employer
relationship, you whether
or not there's an agreement
in place if I create
something as an employee,
and I create it in the course
of my scope of duties.
So I am.
the head of H.
R.
and I write the employment
guide, the employee,
handbook I created that in
the course of my employment.
I am the human being who
created it, but the author
for copyright purposes is
my employer and also.
The owner, so if we were to
look that up at the copyright
office, there's only 1 entity
listed their employer.
I don't appear anywhere
on there.
I don't even exist for the
purposes of the creation
of that asset when it's not
an employee and it's
contractual relationship
like.
What we have with our
clients, then the work for
hire concept also exist.
You do have to have the
magic words work for hire.
We'll look at that in
a second.
, and then when we have that
it's in writing and it's signed
and it's work for hire.
The human being, the
consultant is creating it,
but the, client is the owner.
And again, there's
only, they immediately
own it as if they created
themselves.
There's no separation
there versus assignment.
When there is an assignment,
I have the creator.
And that is the human, of
course, and then I have
the person who's going
to own it.
So, if we were to look
at that in the copyright
office, there would be the,
author, the human, and then
the owner would be the separate
entity, the client.
So, there is actually a
transfer of rights from
the creator to the owner,
and that's the assignment.
And then license is
the last level where The
creator and the owner is
the same, but they're giving
permission to the 3rd party
to use, some or all of my
rights that I have in
that work.
these are the 3 kind
of concepts that we will
find in.
A client agreement, so
let's look at a sample this
is going to be a very typical
provision.
it will have this 1st
section.
not going to read the
whole thing to you, but
I'm going to point out, the
key provisions that we are
looking for.
So, in this 1st paragraph,
it is talking about the
rights that contract or
use the term contractor
instead of consultant
here is.
Providing to the client,
so this refers to the
deliverables that the
contractor is agreeing
that all the deliverables
are owned by the client
and that the contractor has
no rights in it and that it is
a work for hire for the client.
So that is that 1st level, as
soon as it's created by the
contractor, It is as if the
client created it and they
immediately own it and
immediately have all the
rights under copyright law
in that work.
However, the bucket of
things that can fall under
work for hire when it is
a contractor relationship
versus an employment
relationship is actually
defined, like, not everything
we do qualifies as a work
for hire when contractual
relationship as opposed to
an employment relationship.
So there is a bucket of
things that it applies to.
if it doesn't, for some
reason, fall into one of
those specific buckets, a
work for hire eligible work
product, then the assignment
comes in because then
the client, okay, if it
doesn't qualify as a work for
hire, I still want to make
sure I get all the rights.
So if it's not a work
for hire.
Contractor assigns 100
percent of the rights in that
deliverable to client.
So here, again, the client ends
up with all of the rights, but
it is through an assignment
as opposed through as if
they created it themselves.
But still they get all the
copyrights with the client, and
the contractor retains no
copyright interest
in that deliverable.
And then the second,
paragraph refers to those
elements that the contractor
brings to the table.
I mean, there's a reason
they're coming to you instead
of somebody else, because,
you have a system, you
have a model, or you have,
, some research or data or
something that you're bringing
to the table, and you want to
make sure that you continue
to own those.
Materials, so we want to make
sure that we are carving
out from, that work for
hire and that assignment your
pre existing materials.
paragraph says you retain
ownership in those things.
But where is the license?
So, the, last part of that
sentence is the license
that you are granting to
your client to use your,
materials.
Obviously, they have to
have a license to use it.
Let's say you do A strategic
analysis, and as part of
that analysis, you're
using some preexisting
research that you have.
You're using some models
and templates that you
have and you package that
together for the deliverable
and you present that strategic
analysis to your client and
so they have to have the right
to use, the things that you
incorporated in that
deliverable.
The issue is how broad is
that license?
This is.
Very standard language
that you will see from
the client.
Now, first of all, this one
is fairer than a lot of client
agreements, because a
lot of client drafted
agreements won't even have
this second.
Paragraph in it, it will
just be 100 percent of the
deliverables.
I own it because I'm
the client, probably
at least 40 percent will
also have this 2nd
paragraph that acknowledges
that you're bringing your
own materials to the table
and that they simply get a
license to it.
But let's look at this
license.
in the middle of the 2nd
paragraph, it says contractor
hereby grants a client
a limited worldwide
perpetual irrevocable
royalty free, fully paid up
transferable right and
license to use, execute,
reproduce sub license,
display, perform,
distribute, maintain,
create derivative
works and make modifications
and improvements to
the contractor materials.
This is very.
Common starter language, you
know, standard language that
you'll get from your client.
And so what is wrong
with this?
you know, we didn't start
from the basics of what the
bundle of copyrights
that you get as a copyright
owner, but I'll tell
you what they are because
they're all right here in
this license.
the exclusive rights you get
as a copyright owner is that
you get the exclusive right
to reproduce, sub license,
display, perform,
distribute, create
derivatives, and make
improvements.
Those are your exclusive
rights as a copyright
owner.
And so when you have a
license is this broad, even
though you have a retaining
ownership of that work, you
have granted a license to your
client that is so broad
that they can do anything.
Everything that you can do as
a copyright owner without
coming back to you so they can
sub license it.
They can create derivatives.
They can reproduce it
and distribute it without
paying you another dime
because you have granted
them that broad of a license.
So, what do we want to do?
We want to make sure that we
are limiting that license
And so just, you know,
I probably should do my,
disclaimer here.
Of course, this is information,
legal advice.
If you have specific
questions about your
agreements, talk to a
lawyer, but, this is pretty
good advice, information.
so there are a couple of
things that we want to do.
First of all, we want to
make sure that the grant of
license is subject to
them paying your fee.
What's the difference?
So if The grant of license is
not subject to paying
your fee.
You have granted the
license so they have the right
to do whatever they want
to with it.
you can do all the things and
if they haven't paid you,
well, they've breached their
contract and you have a
contract claim against them.
So, they're supposed
to pay you.
10, 000 and they don't
pay it.
Well, then you can sue
them for the 10, 000.
If the grant of the license
is subject to payment of your
fee and they haven't paid
it, that means they don't
have a license, which means if
they use that deliverable
without a license,
what is that?
That is a copyright
infringement.
And so then you not only have
a, contract breach, you
also have all the statutory
damages that you get under
intellectual property law,
because they have infringed
your copyright if they haven't
paid your compensation.
So we want to always
have that.
this should never be
Controversial, when you're
asking for this,
Typically, they will not agree
to it, with respect to the
work for hire the assignment,
you can try it, there should
be no objection to it with
respect to the license of your
intellectual property,
clarifying that it's not
exclusive.
Frankly, you know, if it
doesn't say exclusive, it
is by default non exclusive,
but, let's be clear.
So there's no misunderstanding.
Nobody thinks they have
an exclusive license.
And then we've just cleaned
up to make sure that
the license that you
have granted them in your
preexisting material is
only, for their use and their
use alone.
They can't transfer it.
They can't sub license it.
They can't create
derivatives and it is for their
internal use.
And, you know, I'm making
the assumption that the
deliverables for their
internal use most of the
things that we do for
clients is, to help them
inside their businesses it's
not something that they're
reselling and so make that
very clear in the license
so that if they want to
do something else with it,
they want to use it with,
an affiliate, or they want
to somehow incorporated
in something that they're
going to sell.
You want to make sure that
your fee is consistent with
the breadth of the use
that they're looking for.
these are all very reasonable
requests.
people often ask me, I don't
know if I'm allowed to ask
for changes.
You are allowed to ask
for changes.
=, they just need to be
reasonable and to be very
clear that you're simply
trying to protect your
intellectual property, but
you do want to make sure that
they have the rights to do
what they need to do with your
deliverables.
And so, with that, that's
what I wanted to talk to
you guys about with that.
I am happy to take your
questions and you can
pop them in the chat.
and also, you can always
find me if you have any follow
up questions, on LinkedIn,
please feel free to connect
with me there and then the
recording will also
be available there as well.
So I'll hang around for a
minute to see if you have
any questions.
Otherwise, I thank you for
joining me.
All right, guys.
Well, thank you again.
And if anything comes up, you
know where to find me and I
look forward to next time.
Don't forget, the last
Wednesday of every month, at
noon Eastern.
And I do take requests.
So if there's ever a topic
that you want me to address,
on a live, just shoot it
over to me and I'd be happy
to do that.
Thanks.
And then that's, where
you can find me as well.
I'm online.
All right.
Thanks guys.
See you next month.