10 Words That Can Help You Make Money
Ivan Hoffman, B.A., J.D.
I’ve been practicing intellectual property law as of this writing for over 37 years and if there is a way to capture in one simple phrase one of the reasons people fail to make money in this business it comes down to this:
It never matters…until it matters…and then it matters.SM
People fail to realize the significance of this phrase and thus make it virtually impossible for them to ever succeed in this business. “This business” can be writing, publishing, singing, song writing, making records, being an artist or any other form of intellectual property business. I have represented all such parties and the leit motif is the same across the spectrum.
To say it in even stronger terms: by failing to understand the significance of the phrase, they set themselves up so that they can only fail. They put themselves in a lose-lose situation. If their project is a failure, they lose because they have spent $x.00 producing the project. If their project is a “success,” they end up spending more money than they could ever imagine paying lawyers to try to retrofit the project and, in many instances, end up paying out damages and costs to other parties so they lose there as well. What kind of a way is that to run a business? It seems completely self-defeating.
In the intellectual property business, the only thing you have that has the possibility of making money is intellectual property rights. This is not like land which can rise in value on its own. It is not like the stock market which, in better times, also rises. The only way you can make money with intellectual property is through the exercise of your rights.
Other than locking your projects in desk drawers, the only way you can lock in your rights is to have valid documentation supporting your rights. If you are the sole author and creator of the project, you still need valid copyrights, trademarks and other forms of intellectual property rights. But rarely is the author and creator the only party involved in a project. At the very least, there are often editors (if a writing), illustrators, co-creators of one sort or another such as co-composers or co-authors or ghostwriters, as well as one or more distributors such as publishers, record companies, licensees of one sort or another including foreign licensees, and many other such parties.
So let’s get real for a moment since I am a reality-based attorney. Many, if indeed not most, projects are destined to not be successful having nothing whatever to do with the creativity or merit of the project. It is just simply the arithmetic of creativity. Trying to figure out what people are going to “like” is a nearly impossible task. So in many, if indeed not most, instances, that there has been a failure to properly secure rights may not “matter.” Of course it always matters since projects can have long lives under copyright law and that a project is a failure on day 1 does not mean that it won’t find “legs” later on, at a time when figuring out who owns what may be even more difficult.
But staying with the reality theme here, in the rare instance where the project is a “success,” then we come to the time “until it matters.” Once the project is at this stage, my long experience tells me that it is nearly impossible and certainly much more difficult and expensive, to make a deal once the project is completed as compared to when the project is in its creative stage. But now it clearly “matters” whether you have properly secured your rights in the form of copyrights, trademarks, licenses, written agreements and the like.
And if the parties have not planned for success by thoroughly documenting the rights, we come to the “and then it matters” stage because that’s when the claims start. And if the rights are not properly documented, the project is destined to fail since even if it is a “success,” you cannot count the number of claims that will come out of the woodwork if the project makes more than $1.82. Further, if there are claims to the project, the project is virtually unmarketable since no one is going to want to get involved with the project pending the outcome of the likely numerous conflicting claims. Read the series of articles with the general title “A Legal Nightmare: The Unwritten License” on my site. Click on “Articles for Writers and Publishers.”
The Excuses For Not Doing It Right
Over this same period of time as I have been representing parties in the intellectual property business, I have heard all of the reasons (although they are not reasonable nor logical so it is really hard to call them “reasons”) for not preparing for success and for thus planning to fail. These are some of my favorites:
a. “We don’t need a contract…the other party is my [fill in here any relationship you like…husband/wife, brother/sister etc. etc.]”
If I had a nickel for every time I represented one or more of such parties in a dispute over the project for which they “didn’t need a contract,” I’d be rich indeed.
Moreover, it is not contracts that break up relationships. Contracts are just easy targets. What breaks up relationships is the “I thought you said….” stuff that comes from no contracts or poorly written ones. So if these relationships were really valuable, the parties would protect those relationships by writing the deal down properly.
b. “It’s just a small project so there’s no need for an agreement.” Now if anyone actually knows what is going to be successful and what not, well you wouldn’t be reading this article. And if it is actually a small project, why bother?
c. “I don’t have the money to engage the services of an experienced attorney.” No… but they do have the money to throw away on the project such as production costs, lost time, uncertainty, risk etc. And then you have a project where you have one foot on the gas and the other on the brake since you are afraid that if the project becomes too successful that someone’s going to bring a claim (which they are very likely to do).
A good entrepreneur works backward. The entrepreneur thinks: “if I want to be here in 5 years, what do I have to do in 4 years? What do I have to do in 3 years? What do I have to do today?” In the intellectual property business, today requires you to think ahead and plan for success so that when it “matters,” you will be ready.
Copyright © 2010 Ivan Hoffman. All Rights Reserved.