We’re discussing how to spot the hidden license in your client agreements.

In this episode, Erin dives deep into the nuances of protecting your intellectual property with your clients and uncovers the hidden licenses that may exist within your client agreements. Here are 3 key takeaways from the episode:

1. Understanding the Levels of Ownership: Learn about the varying levels of ownership and permissions in copyrights under intellectual property law – from work for hire to assignment and license.

2. Granting Limited Licenses: Discover the importance of limiting the license you grant to your clients for the use of your materials, ensuring it aligns with your compensation and use parameters.

3. Protecting Your Intellectual Property: Gain insights into how to carve out your preexisting materials, clarify the exclusivity of the license, and ensure it is solely for your client's internal use.

Tune in to the full episode on the "Hourly to Exit" podcast to equip yourself with the knowledge needed to protect your intellectual property and navigate client agreements effectively. 

Don't miss out on these valuable insights!

Connect with Erin to learn how to use intellectual property to increase your income and impact. hourlytoexit.com/podcast.

Erin's LinkedIn Page: https://www.linkedin.com/in/erinaustin/

Hourly to Exit is Sponsored By:

This week’s episode of Hourly to Exit is sponsored by the NDA Navigator. Non-disclosure agreements (NDAs) are the bedrock of protecting your business's confidential information. However, facing a constant stream of NDAs can be overwhelming, especially when time and budget constraints prevent you from seeking full legal review. That's where the NDA Navigator comes to your rescue. Designed specifically for entrepreneurs, consultants, and business owners with corporate clients, the NDA Navigator is your guide to understanding, negotiating, and implementing NDAs. Empower yourself with legal insights and practical tools when you don’t have the time or funds to invest in a full legal review. Get 20% off by using the coupon code “H2E”.  You can find it at www.protectyourexpertise.com.

Think Beyond IP YouTube Page: https://www.youtube.com/channel/UCVztXnDYnZ83oIb-EGX9IGA/videos

Music credit: Yes She Can by Tiny Music

A Team Dklutr production

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.