Should agencies retain IP rights to their work?

Creative agencies can claim credit for their work, but not the IP (Intellectual Property) rights. By contract, they are assigned work for a fee, which means the IP rests with the client commissioning the work. Adland is divided on whether this status quo should change - on whether a one-time fee justifies use of an idea for perpetuity by clients. And the voices in favour of retaining IP rights are getting louder and are more frequently heard today.

 

Nagesh Alai, group chairman, FCBUlka, points out that while IP rights were approached casually in the 15 per cent agency commission ecosystem, it needs to be taken up seriously and addressed in the present circumstances.

 

He raises a fundamental question on what the fee paid entitles the client to: “Is it just the day to day 24x7 intense servicing and understanding consumers and competition or does it also include the ‘brand thought’ or the ‘creative idea’ that the agency ultimately gets to the table? In the past, because of 15 per cent system, the agencies were covered in a way. But today, with the fall of 15 per cent regime in many cases, it will only be fair that agencies are remunerated separately and adequately depending on whether the use of that idea is for a limited period or for perpetuity.”

 

Joseph George, CEO, Lowe Lintas and Partners, believes it is unfortunate agencies do not get any IP royalty and sign contracts handing over IP rights to the client, preventing any future claim to the intellectual property.

 

He adds, “Another aspect is that when many agencies participate in these pitches and share the strategy and creatives, there is no legal guarantee that the client will not use the idea. This is a real issue and it is hurting agencies especially in times when revenues and margins are under pressure. And since an idea is the only transactable ware of the agency, if it has such a limited and narrow definition of how to be remunerated (for), obviously agencies will be affected negatively. Creative agencies need to desperately find ways of getting clients to pay for IP.”

 

Both Alai and George cite changes in allied industries with respect to IP rights. They believe that eventually things will change in advertising too.

 

There are others like KV Sridhar, CCO, SapientNitro, who believe that IP rights should remain with the client. He reasons, “Clients share a lot of vital information and strategies with the creative agency, and so virtually agencies become the brand custodian. They pay for the agency’s time, provide the environment and ecosystem to create ideas. Without it a creative agency will never be able to create ideas. If you take the brand away, the idea will not be good enough on its own.”

 

Sunil Kataria, COO, sales, marketing and SAARC, Godrej Consumer Products, believes that assigning IP rights to the creative agency goes against the principle of agency-client partnership. He states, “A creative idea delivers stronger brand equity and a healthier business. These are two common goals driving the agency-client partnership. With creatives asking for the IP rights you are somewhere questioning the partnership principle itself. ‘The idea is mine’ and ‘the brand is yours’ results in ‘me’ versus ‘you’. I find a flaw in this.”

 

For a creative person, the greatest high is seeing the idea communicated and executed well not that the IP rights belong to him/her, he argues.

 

S Yesudas, MD - Indian subcontinent, Vizeum, says that if an agency is assigned to produce work for a brand for a certain fee, logically the IP would rest with the client, ‘unless creative agencies are willing to reinvent their assignment/fee models’. He terms the status quo ‘fair’, and uses the opportunity to make the case for media.

 

“Ideas are many and can originate from various sources. What’s critical is to see the idea reaching a logical conclusion, more so in today’s convergent world. Creative agencies have fabulous opportunities here to align with media agencies to create content which embraces the generic essence of any brand,” he explains.

 

 

 

(Published in the issue of Campaign India dated 25 July 2014.)