IP Tech Knowledgy

Agreements between marketing/advertising companies and their clients should address ownership and usage of the intellectual property created. A client should usually own the output so it can use the materials for any purposes, in perpetuity. However, depending on the compensation structure, the client might only receive a license to use the materials for particular purposes, campaigns, duration, territories, media, and/or with other restrictions.  

A client should understand it only owns the creations if the marketing company affirmatively assigns the rights in writing. Paying for the work does not automatically give the client ownership of what an ad agency creates. This is usually not a situation of work made for hire.  An exclusive license to use the materials must also be in writing; a non-exclusive license can be implied.

At times a PR and marketing company will provide pitches to potential customers without first having a contract. Because ideas are not protectable, the company should understand the client could take the idea and formulate it differently with its own “expression” of the idea.  Conversely, the client should understand that it does not have the right to use any copyrightable material that the company presents if the company has not assigned or licensed the material to the client. An agreement could specifically address whether, and how, the client is allowed to, or prohibited from using similar ideas at all.

An agreement can also address when the ownership rights actually transfer. A client’s right of ownership could ripen only after all fees for the work have been paid in full. In the interim, the client could get a limited license to use the materials. Additionally, the assignment of full ownership should only pertain to the materials a client actually accepts and uses, and not all provided material, such as alternate campaigns or designs. A marketing company may want to reserve back a license to use its completed product to include in its portfolio to show prospective clients. 

The client should ensure that the company warrants that it is providing original content or has a license to use and sublicense to the client the materials that the advertising company provides.  Otherwise, the client may be infringing on the copyright of others.

If the company is helping create branding for new offerings by the client, the brands are the client’s trademarks because the client will be the one offering the goods and services.  

For any domain names acquired to be used with the new program, it is more appropriate for the client to own the domain names, and the client should be listed as the “Registrant” on the domain name registration.  

Ned T. Himmelrich
410-576-4171 • nhimmelrich@gfrlaw.com