Ivan Hoffman, B.A., J.D.
For reasons not all together clear, the rise of the Internet has seen the corresponding rise of jargon. People toss around words that, often in the context used, seem malapropisms or at best, inappropriate. But from the legal standpoint, the use of these terms can have very significant consequences, often quite adverse to the parties using the jargon or to others in a given transaction. You might want to read the series of articles on my site under the link “Articles About Being an Entrepreneur” with the title “Precise Contract Language.”
Here are some of my “favorites” uses of jargon, although there are many others:
These are just some of the potential legal issues that arise from the inappropriate use of these terms.
I have seen parties talk about others with whom they work as “partners” when they probably mean “associated with” or “affiliates.” A partner, from a copyright standpoint, is a party that has joint ownership rights to a body of work. Unlike a “joint venturer” which has rights to only the specific work on which the parties who are joint venturers are working, a partner has rights to a much larger scope of work. This means that if someone is your “partner,” that party may be a co-owner of all rights to whatever scope of work the partnership is about. Is that what the user had in mind when the user used “partner?”
Furthermore, parties who are in a partnership are jointly and collectively as well as individually liable for all the debts and obligations of the other parties in that partnership? Is that what the user had in mind when the user used “partner?”
So when you see others use this term, be careful. And never use it yourself unless you are certain these consequences are what you intend.
I see this constantly when parties talk about having a “team” work on a project. This is used frequently when someone seeks to engage an agency or a one-stop shop or other intermediary (for brevity, “Agency”) to design a project (web site, book cover or the like). “We have a team….” or “We have a dedicated team…” to do the work. The term “team” has no legal meaning of any kind whatsoever. There is no legal entity called a “team.”
If you are the party seeking to engage an Agency and you see the word “team,” be prepared to ask a number of important questions and stop all work until you get legally satisfactory answers.
In order for you to acquire exclusive rights to the work of the “team” members, you have to have a valid, written and signed writing transferring all rights exclusively to you. (Read “The Fundamental Principle Under the United States Copyright Law” on my site. It is so important, you can find the article on every table of contents page). If the Agency does not have a valid, written and signed transfer from the creator of all rights exclusively to the Agency with the right on the part of the Agency to transfer and assign those exclusive rights (to you), you do not have exclusive rights to the work of the “team” member unless the team member is a bona fide employee acting in the course and scope of their employment with and by the Agency. In most if not many instances, the “team” member is not a bona fide employee but is merely an independent contractor engaged by the Agency to do the given work, often without any agreement or any appropriate agreement transferring exclusive rights to the Agency and the right to transfer and assign as discussed above. And if that is the situation, since the Agency is not in a legal position to transfer exclusive rights to you, you are not in a legal position to acquire exclusive rights to the work of the “team” member and thus cannot acquire any rights of copyright to that work and thus cannot effectively exploit the work containing the “team” member’s work and other legal and marketing problems. And you definitely need exclusive rights. Non-exclusive rights obtained via an unwritten license, are pretty much worthless. Read the series of articles on my site on the link “Articles for Writers and Publishers” under the main title: “ A Legal Nightmare: The Unwritten License.”
So you have to ask all the above questions and actually see all the intervening documentation and have the documentation reviewed by an experienced copyright attorney.
Another “favorite” of mine. Someone, whether an Agency or otherwise, will tell you they work in “collaboration” with you to create whatever the work is that you are seeking to have created. It could be a book, a web site, software…whatever. Now aside from the obviousness of the concept… of course they work in “collaboration” with you…, the use of that word creates significant legal issues.
If 2 or more parties “collaborate” on a work, there is a strong legal assumption that they are “joint authors,” to use the copyright term. Read “Joint Authors Under the Copyright Law” on my site. This is an assumption and not a foregone conclusion but its mere existence as a possibility creates a potential legal “cloud” on the work thus preventing you from exploiting it, allowing others to exploit it or indeed even seeking copyright registration for the same.
This is how the copyright law defines a “joint work:”
A “joint work” is a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.
So it depends on the “intention” of the parties as well as objective facts. But if the project you are working on becomes successful (or even if it does not), you’d be amazed at the claims parties can make and do you want to get into a multi-year litigation, with the attending hundreds of thousands of dollars in legal fees, risk of loss, loss of value of the project etc. to try and get a court to see it your way?
So, as above, if you see the use of the word “collaboration” (or any similar word implying a joint effort), be prepared to ask a number of important questions and stop all work until you get legally satisfactory answers. And also as above, do not proceed until you have the entire matter reviewed by an experienced intellectual property attorney.
Often these terms are used in the same document saying that you will own the rights to the work and this makes things even more confusing. There are thus potentially conflicting provisions and with such conflicting provisions, the same legal “cloud” is created which means that as a practical and legal matter, you may be unable to exploit, allow others to exploit or even register the work for copyright protection.
The best solution is for you to contract directly with the party doing the work with a valid, written and signed agreement drafted by a knowledgeable intellectual property attorney with experience in these matters.
If for some reason you decide to work with an Agency, you must see their agreements with the “team” members and have those agreements reviewed by a knowledgeable intellectual property attorney with experience in these matters. Moreover, there must be appropriate representations and warranties in your valid, written and signed agreement with the Agency about their rights and ability to transfer and assign those rights to you and appropriate indemnities. Representations, warranties and indemnities however merely give you a right to sue the Agency and, as above, do you want to get into a multi-year litigation, with the attending hundreds of thousands of dollars in legal fees, risk of loss, loss of value of the project etc. to try and get a court to see it your way? The better approach is to have valid, written and signed agreements directly with the party or parties doing the work.
You must also clarify the statements about the above words and concepts so that transfer of rights to you, exclusively, is crystal clear.
These are just some of the issues that arise when you interpose an Agency between you and the creator and you should absolutely consult with an attorney with experience in these areas before doing so.
And for goodness sake, if you are spending the time, money and energy to create a project, then you need to keep in mind that in the business of intellectual property rights, which is the business you are in no matter what your product or service, quality legal services are the absolute foundation of your business. If you are going to run a dress company, for example, an essential expenditure might be machines to manufacture those dresses. However, in the intellectual property business, an essential expenditure is a high quality intellectual property attorney. You would clearly not consider going into the dress business without such machines and you should not consider going into the intellectual property business without such an attorney. Thus unless you budget for attorneys fees in a realistic amount, the amounts you spend on the other areas of your business may be potentially put at substantial risk. Further, without thorough legal protection, you may put yourself in a lose-lose situation: if your project is a failure, you lose. But if your project is a success (or even if it is not), you may find that the other party, NOT YOU, ends up making all the money or you may open yourself up for more claims than you can even imagine and in which event, you lose because you pay all your profits to lawyers and/or damages to the offended parties.
What kind of a way is that to run a business?
Copyright © 2015 Ivan Hoffman. All Rights Reserved.
This article is not legal advice and is not intended as legal advice. This article is intended to provide only general, non-specific legal information. This article is not intended to cover all the issues related to the topic discussed. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. This article is based on United States law. You should consult with an attorney familiar with the issues and the laws of your country. This article does not create any attorney client relationship and is not a solicitation.
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