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I am in the process to send a service agreement to my clients. I am stating that Intellectual Property related to all promotional material created while in the service agreement by my company will be owned by the Consultant instead of the client. Examples of these are:

  • In-store promotional material that have to do with the service I am providing to the client
  • Other arts and graphics designed by me (consultant) while engaged in this service agreement

Basically, I am charging my clients for an ongoing service, I am providing graphics/arts in order to provide this service. I am trying to avoid a client engaging in my service for 2 months so that they can stay with all art/graphics and IP behind our marketing experience.

Does this make sense? Is this a good way of protecting my IP?

If the client stops the payment, then I collect the arts, and stop my service. At least in theory it sounds good. What do you think?

This is what I got from another service contract. As an example:

All rights, titles and interests in and to the programs, systems, data, reports, audio and video materials, databases, or other materials used or produced by Consultant in the performance of the Services called for in this Agreement, including any modifications, enhancements, or derivative works thereof, shall remain or become the property of Consultant.

UPDATE:

I just noticed that is not understood that the client is not hiring us to make art. They are paying us to help them with their customer service. In order for us to do this, we will need some art-work. Is not required that we make it, but is encourage. We will be fine for them to make their art-work somewhere else, but if they don't we will eat that cost.

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3 Answers

up vote 5 down vote accepted

This is a terrible idea. You don't hire and pay people for them to keep the results of the work for themselves.

What you can and should do is to state the following:

IP and related rights as well as all of the benefits gained through these achievements remain the property of their creator until the work has been paid in full. Then and only then are the rights transferred to the client.

A good idea would be to split the work into some chunks, milestones or whatever and have the statement above apply individually to each stage. Then it would provide for a good balance of interests between you and your client.

UPDATE: With your arts I feel like it's better covered by a minimal service term for which the company must pay no matter if they use it or not. Here you can optionally add a stimulating clause only transferring the ownership of arts after the minimal term has been through. That would be far more reasonable the the threat of taking everything with you if they dare fire you ever.

UPDATE #2: Your SLA snippet is actually absurd. It says: "... or other materials used ... shall remain or become the property of Consultant". That effectively attempts to transfer the ownership of anything you encounter or learn at the client's site to you. This is basically hostile. Such contract can only be signed by someone who doesn't have a habit of reading contracts. I also believe this sort of agreement can be perceived as fraud attempt in a court.

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Thanks for the honest feedback and the idea. The point that I am trying to make is that the result of my service is not the art that my company have to produce, is the actual service that we do in a daily basis. So the result is being delivered, my concern is on the art that we have to put on the stores to make our service happen. If they stop using our service, then we should be entitled to sell the art or collect it? – Geo May 30 '11 at 22:01
I guess this all boils down to a non-lawyer trying to construct a legal document in the event of a contract going sour. I think I will have to hire legal services based on your Update #2. Thanks @Developer. If anyone else have an opinion please share. – Geo May 30 '11 at 22:45
@Geo: It's fine to write down your first ideas but at some point when your intentions have become serious you need to have a proper agreement in place and let a specialist provide your with a document based on your ideas and your concerns. This is the way it must be. – user10393 May 30 '11 at 23:16
And to your text like I said it is okay to collect ideas on your own, you just overdid it a bit. :) – user10393 May 30 '11 at 23:17
2  
Your update #2 is legally incorrect. Courts will generally presume that people read and understood the contract (although reality shows that often isn't the case). I don't see including an unconscionable contract provision as ever constituting fraud. The worst I see happening is that the provision (or perhaps the entire contract) would be unenforceable. – user6603 May 31 '11 at 9:14
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up vote 3 down vote

It sounds like you need two different agreements (or at least separate sections of the agreement), one for the artwork and another for the ongoing service. To state it simply, they must buy the artwork for its real value regardless of how long they use the service. You could give terms for paying for the artwork but those terms would not be related to whether or not they continued to pay for the service.

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up vote 1 down vote

Well it is not an absurd question. Under US law, without a contract, a consultant does own the IP they create, and the client gets a license to that IP

When you sign a contract with a consultant, the consultant can ask to retain certain developer "stock" or "background technology" that is re-used with multiple clients.

http://www.nolo.com/legal-encyclopedia/software-application-development-agreements-copyright-29584.html

You would need to have a story about what the developer stock is, which is generic non-business-specific components. You generally want the customer to feel that you are in no way claiming rights to anything they thought of, or anything you invented specific to their problem.

Please get an attorney

I am not an attorney and this is not legal advice

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