Ripe was recently appointed to handle a small but exciting piece of business by an entrepreneurial client.
The appointment came about, as is usually the case, after the client and the incumbent agency fell out over issues that had no resolution. And, as is also usually the case, we were eager to begin work with an emerging brand that seemed to have so much potential.
However, when our new client tried to extract artwork and open files from the recently-fired agency, it simply refused to relinquish the goods - even though all bills had been settled in full. The agency contended that it owned the material because it had never surrendered ownership to the client in writing, and that therefore the client had no valid claim on the work.
Every decent agency has lost business at some point, and every decent agency knows the pain (not to mention the time and money lost) in the collating and packaging of an outgoing client's work for handover to the new suppliers. It always feels like salt in the wound, but like printer jams and weekend work, it's simply part of the business.
That's the moral issue, and the upside is that the outgoing agency retains a modicum of respect by not petulantly fighting for someone else's property.
But is it really someone else's?
Many agencies and clients have been, are being, and it appears always will be, burnt by not
being too clear on what the law has to say about the ownership of copyright and intellectual property.
According to Louise Myburgh, Partner at Spoor & Fisher, a legal firm specialising in intellectual property law, the nature of the work produced needs to be considered first and foremost, as the Copyright Act protects certain classes or categories of works provided they meet certain conditions. Artistic works are, for example, works falling into one of these categories.
I asked her about advertising concepts and design work, and was surprised to discover that by default, copyright belongs to the agency - unless expressly assigned to the client in writing. Generally, the author of a work is the creator of the work and is the initial owner of copyright in the work, subject to certain exceptions.
Myburgh points out another bear-trap lurking between the leather-bound covers of the law, and that is that the work generated by a freelancer belongs to the freelancer unless covered by one of the exceptions to the general rule provided for in terms of the Copyright Act.
“Unless the rights under copyright are assigned in writing,” Myburgh says, “the author or creator of the work will be the first owner of the work.”
Picture the scene: you commission an agency to create an artistic work, the agency commissions a freelancer to work on your project, you pay your fees and the work ends up belonging to a complete and utter stranger…
Absurd as it may seem, someone who is essentially a sub-contractor may end up holding legal title to the corporate identity of a bank, an airline, an international hotel chain, or the mom-and-pop restaurant around the corner without the brand owner having the slightest notion that this is the case.
Of course, our new client is more than a little disgusted at the treatment he has received from his outgoing agency. Not only were copyright and IP issues not addressed at the beginning of the business relationship, but the client now faces mounting legal expenses as well as the growing opportunity cost of not being able to proceed with any kind of communications at all.
The lesson is simple. It can't hurt clients and their agencies to be crystal-clear about the terms of IP ownership before the first job-bag is opened. Whatever the noble intent at the start of the relationship, if and when things turn nasty, a few words on a signed document can go a long way in avoiding all sorts of possible disputes down the line.
