Understanding the Importance of IP Ownership and Background Asset Carveouts
As an influencer, protecting your creative work should be a top priority in any independent contractor agreement. However, many overlook the significance of intellectual property (IP) ownership and background asset carveouts. Without clear terms in your contract, you could face challenges such as losing rights to your creations or facing disputes over proprietary tools you’ve developed. A well-crafted agreement can prevent these headaches from arising and give you peace of mind. This guide walks you through the essentials to help you navigate this critical aspect of your contracts.
What Is IP Assignment?
IP assignment refers to the transfer of ownership rights in intellectual property from one party to another. In many cases, clients expect that once they pay for your services, they own the final product. This expectation can lead to misunderstandings. As a creative, you need to ensure that the agreement clearly outlines what happens to your work upon payment. Having this clarity is key to protecting your contributions and ensuring you can still use what you've created in your portfolio or for future projects.
What Are Background Assets?
Background assets are tools and materials that you’ve developed prior to or independently of the work you're contracted for. This includes proprietary frameworks, techniques, or any methodologies you use to deliver your services. Background asset carveouts in your contract protect these essential tools. By distinguishing your background assets from the work you're doing for a client, you maintain your right to use and adapt those tools in future projects without restrictions.
To illustrate the importance of these concepts in your contract, here’s suggested clause language that can help outline the terms of IP assignment and background assets:
Work Product. Upon full payment of the Fees provided in the SOW, Consultant agrees that the deliverables, work product, content and other materials created, developed or conceived by Consultant for Client for purposes of this Agreement as provided in the SOW (the “Work Product”) shall be the sole and exclusive property of the Client. Consultant hereby irrevocably assigns to Client all right, title and interest worldwide in and to the Work Product, including all copyrights, patents, trademarks, trade secrets, and other intellectual property rights therein. Consultant acknowledges that to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in 17 U.S.C. § 101 or any similar or analogous law or statute of any other jurisdiction and such copyrights are therefore owned by Client. To the extent that the Work Product and/or the results and proceeds of the Services may ever be determined under the laws of any country not to be a “work made for hire,” Consultant hereby confirms that effective on the date of creation of the Work Product, it assigns (or has assigned) to Client all right, title and interest thereto (including all copyright and associated rights, extensions and renewals, and all causes of action appurtenant thereto) throughout the world. If Consultant has any rights in any jurisdiction, including without limitation “artist’s rights” or “moral rights,” in the Work Product that cannot be assigned, Consultant hereby unconditionally and irrevocably waives the enforcement of such rights, and all claims and causes of action of any kind against Client or Client’s customers.
Background Assets. “Background Assets” are the materials, tools, utilities, techniques, technical frameworks, data models, object models, methodologies, know-how and information (both in object code and source code) made available to Client by Consultant under this Agreement that are proprietary to Consultant. This Agreement grants Client a non-exclusive limited right to use the Background Assets and does not constitute a sale or convey title or ownership of the Background Assets or any intellectual property rights therein to Client. Consultant is and shall remain the sole and exclusive owner of all right, title and interest in and to the Background Assets, including all improvements or modifications made thereto, and all intellectual property rights embodied in or related to the Background Assets.
This balance in your contract protects both you and your client. While your clients gain rights to the work product they pay for, you retain ownership of your foundational tools and methods, allowing you to use them for other projects.
Example Scenario
Imagine you are an influencer who has developed a unique method for creating engaging social media content using specific templates and editing techniques. Your client hires you for a campaign and pays for the final videos produced. If your contract has clear clauses regarding IP assignment, your client owns those specific videos. However, because your background assets clause exists, you retain rights to your templates and editing techniques. This means you can use these tools for other clients or your own promotional materials without any legal limitations.
How Counsel Club Helps
Counsel Club re-imagines legal for startups, freelancers, and creative entrepreneurs. Our platform allows you to search for lawyer-drafted forms for startups, freelancers, content creators, and other creative entrepreneurs. Our platform guides you through modifications, both to the contract and the scope of work. Counsel Club has the most sophisticated drafting tool on the market, and it was designed and developed by lawyers. If you want more help, reach out to a Counsel Club lawyer through our Concierge program. Our legal agent, Amicus, was trained on proprietary legal data to be your best legal assistant. Finally, legal for today, that is fast, protective, and cost-effective.
FAQs
What is the difference between work product and background assets?
Work product generally refers to the final deliverables you create for a client, while background assets are the proprietary tools and methods you utilize to produce that work.
Do I have a license to use background assets after the project?
Yes, you usually retain the rights to your background assets, and the contract should specify that clients receive a limited license to use them within the scope of the project.
Are source files included in the work product?
Source files may or may not be included in work product, depending on the specific terms outlined in your agreement. It’s important to clarify this beforehand.
How are third-party or open-source components handled?
Contracts should outline how third-party or open-source components are used within the work product and clarify who retains ownership of those elements.
How do I document the split between work product and background assets in the SOW?
Clearly define both terms within the scope of work (SOW). Make sure to specify what constitutes work product and what falls under background assets to avoid future disputes.
Final Thoughts
Incorporating IP assignment and background asset carveouts into your independent contractor agreements is essential for protecting your rights as an influencer. Don't leave your creative work vulnerable; take action now to ensure clarity in your contracts and peace of mind in your collaborations. If you need help crafting these clauses, consider consulting with a legal expert to guide you through the process.
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