Top Posts

Making a resolution to get your services agreement dialed in? Or maybe just curious how your agreement stacks up? Consider a CreateLegal Report Card to see if your services agreement makes the grade.

Read More

The portfolio clause is an important piece of any creative services contract. While straightforward, I’ve seen disputes arise out of missing or incomplete portfolio clauses.

Read More

Retainers can be great for the studio or agency but they are prone to disputes. Longer terms lead to forgotten discussions, evolving needs, and unmet expectations.

Read More

All Posts

Blog

Work for Hire and Assignment Clauses

Every creative services agreement should contain provisions addressing ownership of work. This post speaks includes tips when your client will own the work at the end of the project.

Other than payment disputes, the most common problems we see involve contracts missing intellectual property clauses. These can lead to payment problems, portfolio disputes, file delivery questions, infringement allegations, and unhappy clients. This post collects some tips to think about when your client will take ownership of the work. If you will retain ownership, you will need a license (and that is a post for another day).

  • The most important clause to include regarding intellectual property is a condition stating that your Client doesn’t take ownership of Agency’s work until they have paid for it. This simple clause is a key tool to stopping a client from using work they haven’t paid for.
  • For most types of work, we recommend that you avoid typical “work made for hire” language. Instead, use language of transfer. For example, “Upon payment in full, Agency hereby assigns the Work to Client.” This is often sometimes called a “full buyout.”
  • When transferring all rights, make clear that the deliverables assigned are only the final files (as opposed to concepts or working files).
  • Similarly, if you have any tools, code, or similar bits that you reuse on various client projects, make sure these Agency Tools are excluded from the scope of what is transferred to Client.
  • You do not need to retain any ownership to retain portfolio rights. Rather, you just need a good portfolio clause.
  • Assignment transfers all rights in the work to the Client – they can do whatever they want with the work. Because the client is getting all rights, be sure to price your work accordingly (more than if a client were to get a license in the same work).

Keep these tips in mind when negotiating the intellectual property clauses of your contract. Check out other posts in our series Anatomy of a Services Agreement.

Trademark Issues in Services Agreements

If you do logos, naming, and tag lines as part of your branding work, there are a few trademark issues you should address in your services agreement. This post outlines how to avoid some of the major pitfalls surrounding this type of creative work.

Logos, naming, and tag lines (we’ll call them “Marks” for this  post) are unique in that they can become trademarks – identifiers of the source and quality of goods or services. Trademarks are different than other types of design in that they can be innocently infringed. This means that if you create a Mark similar to someone else, even if you’ve never seen the other mark, using it may still constitute infringement.

Because of this, when you create Marks for clients, it is important that the client understand what they are and are not getting from you as a designer. Here are some things to keep in mind.

  • Ideally, your services agreement should state that you have no duty to investigate whether your work infringes the intellectual property rights of anyone else. You are a designer, not a clearance officer.
  • The next step is to state that you are not performing any trademark clearance services. This fits best in the SOW list of “excluded deliverables”. You aren’t a trademark lawyer so don’t let your Client believe they are getting trademark clearance searches from you.
  • Even if you do a Google search or a word search of the trademark office databases, we recommend that you do NOT include that in your list of services and deliverables. Stating this just creates misunderstood expectations with your Client. And in any case, these types of searches are not the same as a proper trademark clearance search.
  • When you present concepts for Marks to a client (before one is selected for development into the final), this is the time when the Client should take those Marks to its trademark lawyer to complete a trademark search.
  • When your Client signs off on the concept it wants developed into the final, consider having the sign-off documentation acknowledge that the selection is made with the understanding that trademark clearance is their responsibility.
  • If a client asks for a representation or warranty that your work does not infringe intellectual property rights, you should either exclude trademark from this representation or qualify it based on your knowledge without investigation. To do otherwise essentially makes.

Keep these tips in mind the next time you’ll be creating Marks as part of your project. Find more posts about issues in your services agreement in our ongoing series Anatomy of a Services Agreement.

Exclusivity (aka Noncompete) Provisions in Services Agreements

From time to time I see services agreements with  exclusivity (aka noncompete) provisions. This post breaks down these types of provisions and how you can respond to them.

Let’s first make sure we are talking about the same thing when we refer to an exclusivity provision. A typical exclusivity provision might provide something like the following:

At all times while providing services under this agreement and for a period of 12 months thereafter, Agency shall not perform services for businesses that compete with Client.

While this seems straightforward and maybe even reasonable, there are a number of things an Agency should keep an eye out for:

  • A good first response to a clause like this would be to delete it. For the reasons discussed below, it is a big ask so don’t assume you have to agreement. Make sure it isn’t just dusty boilerplate that the Client doesn’t really care about (many do not).
  • If striking the clause doesn’t work, ask the Client to identify the specific business concerns as applied to your relationship. That will help you identify the real issue and come up with an appropriately drafted restriction. Is the concern confidential information? Or just that they are worried that the design you do for them will show up on a competitor’s website. These are different concerns and there may be ways other than exclusivity to address them.
  • Exclusivity isn’t free. A client asking you to restrict your potential field of clients is basically asking you to take yourself out of certain aspects of the market. This is a big ask! If you consider agreeing to a provision like this, make sure you are getting paid for it.
  • If your Agency has a narrow industry focus (e.g., only do websites for breweries or only do websites for craft breweries in the Pacific Northwest), exclusivity provisions can be very restricting on your ability to take other work and should have a higher price. If you are a general service Agency without industry specialization, you won’t be able to command as high a price for exclusivity (and it is probably less of a concern).
  • If you have a narrow industry focus and you are being hired by a client within that industry, you can remind the Client that they are hiring you expressly because of that focus. Having that focus and working with companies in that industry is what makes you the right agency for the job.
  • It is far more reasonable to ask for exclusivity during the term of the agreement. Exclusivity beyond the term of the engagement (12 months in the above example) should come with a very high price to Agency.
  • If you are negotiating a provision like this, keep an eye out for broad provisions like “businesses that compete with Client.” Judged in hindsight, this can be viewed very broadly and is subject to interpretation. Better approach is to specifically list the companies, or even the business units within companies, that are considered competitive.
  • If you are a large agency, one response is to include language requiring that if you service a competitor, that you must do so with a separate client team and no information access. This has logistical and technical challenges and is  understandably difficult for smaller agencies.
  • If you are forced to agree to an exclusivity clause, its fair to ask for a provision prohibiting the Client from hiring your employees and contractors away from you. While not a direct tit-for-tat, it does give address some of the risk created by an exclusive relationship where your client team works so closely with the Client.

Keep these tips in mind the next time you face an exclusivity provision in a services agreement. Tackling other problems in your services agreement? Find most posts like this in our ongoing series Anatomy of a Services Agreement.