Contractual Power
Asking prospective clients to sign a “non-disclosure” contract before any creative ideas are presented to them is an increasingly common practice in the advertising industry. Such contracts state that the work being pitched belongs to the agency and the client has no claims to it until some other deal is reached. Should there be violations following such agreements, the agency—or any other firm offering up ideas for use—can sue for breach of contract.
If more than one idea or campaign is presented to clients during a pitch, Quinn says a non-disclosure or confidentiality contract can stipulate the client only has rights to ideas it ultimately chooses. “An ad agency might put forth four concepts. The client chooses just one, so the agency would then retain ownership rights to the other three,” he says.
Another strategy is to craft contracts that stipulate incremental delivery of creative materials to clients. In a first pitch meeting, an ad firm might provide only a teaser of a full-blown campaign to unfold at a later date. “So the client couldn’t take it and run with it because the materials aren’t fully developed,” Quinn says. “This way, you’re not disclosing all the nuts and bolts of the roads not yet chosen. The bottom line is, if you’re afraid of giving away the store, don’t give away the store.”
Although use of such contracts once proved awkward for ad firms—in a time of handshake agreements, they were viewed as tantamount to asking prospective spouses to sign pre-nuptial agreements—they have become commonplace as both sides seek to protect their interests. Bergerson often suggests the two parties make non-disclosure agreements mutual, meaning ad agencies or other creative firms must also refrain from using ideas suggested by clients in pitch meetings.
The client’s perspective can be overlooked in pitch scenarios, Quinn says. Most organizations, for example, are reluctant to sign away rights to creative content they haven’t yet seen. “The client is in effect paying the agency to develop the idea for the pitch, so it’s often hard to hear that they won’t have any contractual rights to it,” he says. “The client wonders why it is underwriting the agency’s work when the agency might just go out and use what it just developed, if a deal isn’t ultimately struck, with one of the client’s competitors.”
The bottom line is, when in doubt, write it out. When both parties’ interests are protected by contract, the odds of any messy intellectual property issues arising fall precipitously.
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If you take legal action against a copyright infringement, you’ll need to meet a two-part test, says attorney Stephen Bergerson of Fredrikson & Byron, PA:
• The alleged infringer had access to your work.
• The new work is “substantially similar” to your original work.
Because the latter rests on a subjective judgment, it’s typically the source of courtroom debate featuring testimony of experts in photography and design. Bergerson says that even slight alterations of original works done without permission of a copyright owner can be considered an infringement.
A common misconception is that infringers are only liable for profits they make, or those that are denied the copyright holder. But copyright owners who prevail in an infringement suit can also win statutory damages—as high as $30,000 per case, and as much as $150,000 if a court finds “willful infringement.”
—D. Z.
