5 Reasons you Need an IP Agreement

5 Reasons you Need an IP Agreement

Calling all creatives! Put down your paintbrush / camera / surface pen / makeup brush /drumsticks /other creative implement for one sec. You need an IP Agreement! Why? Because we said so! Kidding, we’ll stop being parental. Read on for a run-down on what intellectual property agreements are, and five genuine reasons why you need one. 

What is Intellectual Property?

Intellectual Property is exactly what it says on the tin: property that is a product of your mind and knowledge. And attached to those brain babies are legally enforceable rights. The Copyright Act 1968 states the creator of the “work” is the owner of the attached IP. An exception to this is employees who create works as part of their employment. In that case, ownership automatically passes to the employer. It is a different story again for freelancers: you need to negotiate IP ownership. Don’t worry, we’ll get to that bit: freelancers are the backbone of creative industries. Chances are that you, reader, are one yourself, or will deal with freelancers regularly in your hustle. So you must understand how IP ownership works!!! 

An IP owner can do whatever they damn well please with the work: sell it, copy it, distribute it, perform it, brag about it obnoxiously [social etiquette is unfortunately not legally enforceable]. 

But in business exchanges, do not make assumptions about who retains/is transferred IP ownership! You know that old phrase, assuming makes an ass out of u and me. But mostly you, because I’m telling you this stuff now! Having a solid IP Agreement in place leaves no room for assumptions.  

If you want more detes on IP, we have just the fact sheet for you. Or listen to our podcast episode on IP here! Or watch our IP-themed interpretative dance here! (We jest regarding the latter, but please let us know if you do prefer to consume your legal and biz content via interpretative dance?)

What is an IP Agreement? 

An IP agreement is a contract setting out the rights and obligations concerning the IP involved in a business exchange. If you take away one tidbit of knowledge from this article, let it be this: dates stuffed with blue cheese make for a salty, sweet, tangy, FLAVOUR-BOMB of a snack. We joke, it’s this: understand the difference between assigning IP and licensing IP. But also, do try the stuffed dates. Seriously. 

Assigning means you are handing over ownership of the IP, licensing means you are agreeing to someone using the IP for a specific purpose or under limited terms of use. An assignment is akin to buying a DVD, a license is like renting one from Blockbuster. Apologies for the redundant metaphor. And if you were born post 2000s, google Blockbuster…and DVD.

I digress, if you are wishing to retain ownership in your work, a license agreement is non-negotiable. 

If you’re DIY’ing an agreement, for it to be sound under the Copyright Act make sure it covers the essentials:

  • if assigning: it should name the new IP owner and state the original creator of the work confirms their consent to transfer ownership; or
  • if licensing: how can the person use the IP, and for how long? and 
  • All parties must sign it before any work or exchanges proceed. 

While we love a DIY (catch us in our spare making clay pots or glitter-gluing well, everything), some things are more water-tight when done by a professional. On a completely unrelated note, do not put real plants, that require water, in our aforementioned DIY pots. 

5 Reasons You need a Legit IP Agreement 

Here’s a scenario to put the importance of an IP agreement into perspective…

A freelancer is engaged by a creative agency to write the copy for a client wishing to publish a recipe book. The recipe book, Saucy (a collation of sumptuous recipes laden with innuendo), goes on to be wildly successful. But, the silly sausages didn’t negotiate an IP Agreement! Now they are in a pickle. 

Let’s learn from that Saucy tale. Here are five things an IP agreement could have offered: 

1. Clarity

Where there is no written agreement the law will generally assume there was an implied license for the creative agency to use the copy in line with the purpose for which they engaged the freelancer. But, what happens when the agency hands over the saucy copy to the publisher, or if the agency uses the copy? Does the implied license extend to the publisher? What happens if the publisher uses the copy in a way not agreed to by the freelancer? We now have 50 shades of grey areas. 

An IP agreement sets out who owns what, when ownership passes between parties, and the usage rights of all involved. How good is peace of mind! As is pieces of cake! You deserve both!

2. Avoid risks

You are taking an unnecessary gamble not having a proper IP agreement in place. 

As the creator of the Saucy copy, the freelancer has a good case against the publisher. The burden would be on the publisher to prove there was a license agreement – which is pretty hard without a good ol’ signed agreement. The power of the pen, am I right?! 

But given the unpredictability of the court room, relying on lawsuit to assert your IP is risky.  At the risk of sounding like a broken record, a legal battle is an expensive alternative to just…maybe…having an IP agreement? 

3. Time saved 

Drafting up a new agreement on the fly for every transaction leaches time and money that could be spent creating things! 

Once you’ve got a solid IP agreement in your back pocket, you can use it again and again just by tweaking the terms to suit the needs of each dealing. More time for creating!

We’ve got a gorgeous, easy to use, fill-in the blanks one ready for you on our website.

4. The market demands it 

Today’s market is fast-paced, and boundary-less. By the time the freelancer discovers the Saucy IP has been used without their permission, it has already been spruiked on Instagram Live, been advertised on the Facebook feeds of thousands, and Nigella Lawson has tweeted about it. The publisher has already cultivated a reputation attached to Saucy, the saucy copy is associated with their brand. So even if the freelancer has the law on their side, the commercial damage has already been done. 

Today’s market is also collaborative! The best end products are often the fruit of collaboration. Like Cadbury chocolate-covered Oreos! Or Rihanna and Fenty!

Anyway, you will likely be doing many creative exchanges in your career. You need an agreement setting out who owns IP that was created independently and collaboratively.

5. Competitive edge 

When you own IP, you can monetize that IP. Think about how unique IP is. It is an intangible product, it’s exclusive manufacturer: your brain! Damn street people should pay for the privilege of using it! Going ahead without an IP agreement may result in you inadvertently losing your right to sell it letter. 

Okay so you’ve now got 6 reason why you need an IP agreement. We stand by because we said so

Get cracking, get one sorted! As always, don’t hesitate to hit up your resident chic legal geek (yours truly) for a helping hand. Find Foundd on Instagram, Facebook or LinkedIn. Or book your legal consultation here!

Next, swap the computer mouse for your respective creative implement we discussed at the start, and get back to doing the creating! Or swap it for a wine glass, no judgment here.



Riz McDonald is an e-commerce business owner, business coach, podcaster and a lawyer of over 16 years. She’s also a mum, a wife, and a lover of good wine...she only ever drinks the cheap stuff when she’s stoney broke. 

***Disclaimer. Please read!!***

This article is for general information purposes only and should be used solely as general guidance.  It does not and is not intended to represent legal advice or other professional advice.  

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