Part 3: What does a creative agency agreement need to cover?

In a creative agency agreement, there is a very important section which needs to be covered in significant detail. This is the section dealing with intellectual property rights.

Following on from Part 1 and Part 2 in this series, in Part 3 we will cover what needs to be addressed in respect of intellectual property.

Client IP Material

Generally, all intellectual property of the client, which we will refer to as Client IP Material, provided by the client for the creative agency to provide its services will be retained by the client. To make this abundantly clear, the agreement should have a clause stating that nothing in the arrangement between the creative agency and the client will constitute a transfer or assignment of the intellectual property rights to the Client IP Material. The creative agency will simply have a licence to use the client’s intellectual property for the purpose of providing services for the duration of the agreement.

Created IP Material

Where the creative agency develops intellectual property for the client, which we will refer to as Created IP Material, the client will generally want ownership of such intellectual property.

A standard clause in a creative agency agreement will normally provide that the creative agency agrees to assign all right, title and interest in the Created IP Material, in any given campaign or project to the client. In addition, upon request by the client, it must execute all documents and perform all acts necessary to vest all intellectual property rights of the Created IP Material in the client.

Third Party IP Material

Sometimes in the provision of the services, the creative agency will use material that is owned by a third party, which we will refer to as Third Party IP Material.

Where the creative agency uses Third Party IP Material, it is important the client is adequately protected. If you are the client, you may wish to include a clause in the agreement stating that where the creative agency uses Third Party IP Material, the creative agency must notify you and obtain an assignment or a licence of all necessary rights as required in respect of the Third Party IP Material.

Conclusion

Intellectual property is a valuable asset and there are often disputes over the ownership of intellectual property that is in arrangements involving designs, creations and artworks. A detailed intellectual property rights clause can help both parties avoid lengthy disputes over ownership of intellectual property. If you are entering into a creative agency agreement, and you are unsure of your rights in respect of intellectual property, you should have the agreement reviewed by a contract lawyer before you sign. Once the agreement is signed, it can be very difficult to amend the terms, particularly if the terms are favourable to the other party.