Protecting IP with Contracts
So now we're going to dive into protecting your intellectual property through contracts. You didn't think we were over yet, right? So we talked about, you know, doing the registration, trademark registration, copyright registration, these air, some of the ways in which you're going tio protect your intellectual property, but that's not the on ly way remember I said, right at the top that what we're going to do is make every decision through the lens of intellectual property, so that means that you're going to make these decisions not just with trademark registration, but everything. So when you're looking at your contracts, you want to make sure you have clauses in your contracts that protect your intellectual property and that control the transfer of that type. Ok, so a lot of the different transactions that you enter into our going to effect, how your intellectual property is either transferred to somebody else or whether you get to retain the rights to it. So you want to make sure t...
hat you've got contracts for all those different pieces and all those different ways in which intellectual property is sort of changing hands in your business? You want to, you know, pay attention to the path that I pay is taking so once it's created, are you selling it to someone? And if you are you selling the I p itself the copyright ownership of the I p r u licensing it out you know thes these air some of the decisions that you need to be making and be really conscious of so be aware of what's in your contracts okay and have contracts with every transaction okay, so follow rachel's rule of thumb which is to have a contract for every single business relationship that you have ok, so if you've got vendors have an agreement with them if you have contractors you have an agreement with them if you've got clients, you have a client service agreement with them all right? So we're going to talk about some of the different contracts that you want to have, what the purpose of it is and I'm going to show you how this you know, determines what happens with your intellectual property and how it's transferred okay, so this stuff is really important so let's talk about some of the benefits of protecting your eye p with contracts you're taken seriously by clients, vendors, business partners okay, so some of my clients you know, when they first come to me they say, well, I can't send a client a contract to my client or, you know, I've been working with this real answer for a really long time I feel funny about sending them an independent contractor agreement design okay, well that's okay to feel funny, but you're going to send it anyway, ok? Because you're running a serious business that has really value we talked about the value of your intellectual property already, right? So when you have valuable things like that, you don't just leave them lying around and not protect them because you're scared of how somebody is going to react. And I have to say, you know, of the hundreds of clients that I've worked with when they do, you know, broached the subject of they have a contract that they want either their client to sign a contractor to sign a vendor or whoever it is that they're working with the other party is usually happy about it. The other party feels like, okay, well, now, now we're going to be really clear about what our transaction is. Ok, so we're going to be really clear about what we're exchanging here in this transaction, so usually the other party will actually be thrilled they'll be happy that they have a contract cause they want clarity, too, and I have to say that you'll find people responding to you feeling like you're super professional, right? They'll feel like you are a real business, maybe if you're an entrepreneur, you work from home in your pajamas every day, your business is essentially existing on your laptop. And sometimes it makes you feel like you're not a real business well, you are a real business okay and your clients will see you that way and anybody else that you deal with we'll see you that way when you use contracts okay and like I said most importantly you have to protect your business you've got to protect your stream of revenue that's how you take care of yourself it's how you take care of your family it's your legacy that you want to leave with the world right? So you've got to protect it all right? You can't be worried about what somebody is going to think do what you got to do all right? So protecting europe one of the benefits is you know with contracts is to be taken serious flea you avoid cash flow issues because you're gonna find yourself being paid on time every time okay, you're much less likely to have people trying to get over on you when you actually have a contract okay people are going to know that you mean business that you have certain policies and boundaries in place in your company and you're gonna have less issues of people you know messing around with your cash flow which is really important and then it will help you create and maintain good relationships with everyone who with whom you do business because there's going to be clarity you're both going to be on the same page and then it allows you to take advantage of new opportunities by minimizing risk let's say you want to do a joint venture with another entrepreneur the two of you wantto join up together to create you know a product jointly you might be excited about doing that but you also might feel like wait I'm confused I'm worried about what if this happens or what if that goes wrong how we're going to divide the work how we're going to divide the profits a contract brings clarity to that situation and allows you to feel like all right I'm willing to take the leap and take that risk because it's a managed risk right? You're not just you know jumping off the side of the cliff with no parachute you're going to do it with a parachute right and that is your contract and then lastly it increases your efficiency and productivity in your operations believe it or not this is something that you want to systematize I'm a huge fan of systematize ing everything this is what I do in my business I try to systematize every single process if we've ever done it more than once then I wanted systematized so that we know exactly how to do it we do the same way every time so let me give you an example of this if you've got a client service agreement and you make you know clear you create clear terms of what intellectual property is being exchanged in your agreements with your clients? For example, if you're a web designer and you know you're creating a logo for someone and in your contract, there's clear terms about they're getting this logo with maybe the vector file, maybe in pdf form, but they're not getting all the other logo's you showed them that, you know, they might have seen in the sort of creation process or your original art worker illustrations or notes related to their logo. Right? All that stuff you're keeping. So that lets you know that every single client that you work with if they've all signed the same agreement. You know what the deal is with all of them. Okay. And then when you onboard a new client, you immediately send them a client service agreement. Send it to them, elektronik. Lee, let them sign it through. Hello, sign or doc, you sign or another company like that. So they immediately sign that agreement, and then you would start working with them, right? And you collect payment and you have a process. Same thing with independent contractors. If you've got an agreement with all of your ice is, then you know you send as soon as you onboard them, you send them your independent contractor agreement. You also send them a w nine so you can issue their ten, ninety nine you've got the issue you're ten, ninety nine the following year if you're gonna pay them more than six hundred dollars throughout the year and if they're an llc or sole proprietor, so you're going give them their w nine you're going give them their independent contractor agreement right up front. Boom, you've got a process for how you on board a new independent contractor? So that's, what I want you to do is really systematize this process in your business so it's seamless and so that it happens every single time. I cannot tell you how many clients that I've had that have had major legal issues happen because they have a contract, but they didn't get it signed one particular time and of course that's the time that they have the problem client and there's a legal issue that arises and they wind up losing money. Okay, so not only do you want to get your contracts in place, but you want to systematize the process so that every single time they're signed so let's talk about some of the different contracts you need toe have in your business one of them is your client service agreement if you're in a service business, so if you provide web design if you are an accountant if you are a lawyer like me if you are a photographer if you're a filmmaker, any time of tape of service is that you would provide that someone would pay you to provide a certain service then you need a client service agreement on one of the key things that you wanna have in there is a grant of rights clause that protects your I p right because it lets them know what they're purchasing for example in a photographer's client service agreement you might say you know what? You're buying this service of me you know, doing a photo shoot and here's what you get you get a license to use these particular photos in this particular way ok? That's what you want or alternatively you can say, hey, you can purchase the copyright to these photos but of course that's going to cost you a lot more money so you know, in a client service agreement that's going to protect you and sort of create boundaries around your client your your interaction with your client and it determines what happens to the I p that is created when you're you know, doing work and providing a service to a client ok? So that's really important and if you want more information about that, if you're a photographer check out advanced type for photographers we go until a lot of detail about what should be in a photographer's client service agreement also advanced type for filmmakers. We do the same thing talk about client service agreements for filmmakers and my advanced type for designers course of your designer, we go into a lot of detail about client service agreements, and I give you some specific clauses in all three of those courses ah, specific to your industry. So if you're in one of those three professions, definitely check that out, but for our purposes just know that you need a client service agreement if you're in a service business, okay, it should be the same every time you get it drafted, either by a lawyer or you can get a reliable template. Some places you might get a reliable template from is like a professional organization. If you're part of ah, certain profession, if you're a member of a professional association, a lot of times they provide reliable templates notice I'm not saying search for it on google because you're not going to find a reliable template there or, you know you can have a lawyer drafted or another alternative is some lawyers like myself, I have, you know my small but his bodyguard legal pit actually includes a client service agreement template that is reliable, ok, so so those are some of the ideas that can have for getting a client service agreement and implementing this in your business. So three older alternative is if you don't sell services, but you actually sell products, then you want to have a sales contract for your products. And so a lot of us who sell products are in e commerce, right? We sell our products from our website, so if that's what you do, then you need have terms and conditions on your website that serve as their sales contract between you and the people come to your website and purchase your products. Okay? So terms and conditions is sort of similar to the client service agreement and that it sets the boundaries for the customer relationship with your business, so you'd have things in there like you're shipping policy. Your refund policy, you'd have things in there about, you know, if it's an info product or if there's an exchange of intellectual property, for example, there are a lot of us have membership sites now, right? There are a lot of entrepreneurs who who create membership sites for their content, and when you do that, it might be interactive, right? So you might have people who are members who are your customers who are sharing their I p may be there posting content, asking questions and interacting. In the forums on your membership site, you want to make clear boundaries around the intellectual property that's being exchanged so that any I p that they a blow does their own, and that any I p that exist in that membership site is your own, and you let them know how they can and cannot use your intellectual property. You let them know that your trademarks are owned by you, that all the content in the membership side is your copyrighted content, and that they may not share with anyone who is not a member, right, and that that it can't be used in any way they want, that you really limit the way that they can use that content, that if you're teaching a class and their purchasing access to that class, what they're really purchasing is a limited license to use that content and the way that they can use it is for their own personal use rights, so they can't take your content, I turn around and sell it to somebody else, okay, what they can do is take that content and use it for their own personal benefit for their own personal business. You know, for example, for small business bodyguard has a membership site, okay, so somebody downloads a template from there, they can use that for their business, but they can't use that, and then share it with all these other businesses, right? Because that would be a violation of the license that they're purchasing when they purchase access. So I want to give you an example of you know, how terms in terms and conditions is incredibly important to gover your relationship with customers when you're selling products and this is not something like you don't haven't signed in the traditional way like a client service agreement to the way that you implement that is that you build it in to your purchase process, so if you go online and you're going to purchase something, you might fill out a form that has all of your contact information, maybe you give your credit card or paypal you know, that's how you're paying for it and a lot of times you'll have a box that you got a check and that box you're checking is the terms and conditions, so you're checking a boxing I agree to the terms and conditions, and so you'll have a link there to the actual terms and conditions that somebody could read on the site right there to make sure that they agree to it. But you make your system set up so that they cannot actually purchase that product unless they click that box and agree to your terms and conditions all right, so that's, how you're gonna implement terms and conditions in your business if you're selling products so another important contract I have that I already mentioned it's independent contractor agreements this clarifies that the people that are working for you are actually contractors and not employees this can actually be really important for the irs if you miss classify a worker as a contractor when they're really an employee getting a lot of trouble with the irs you could get audited they can require you to pay all these back employment taxes and it can get very, very ugly so you want to have a clear agreement that makes it clear that this person who's working for you is a contractor and not an employee ok? And then you want to have an agreement with your contractors because again they are often creating intellectual property for your business let me give an example I have a copy writer that I work with she's on retainer with my business so we've been working together for a while now and every month she's creating new copy for my company so you know, I might give her some topics or ideas or I might write something and then she'll edit it or you know she might write an article for our block or she might edit one of our new products right? So she's creating content and basically creating intellectual property all of the time for my business so it's really important that my independent contractor agreement with her makes it very, very clear that that that intellectual property that she is creating on my behalf is owned by my company so that intellectual property agreement needs toe have a transfer clause that's transferring that intellectual property to my company does that make sense? So you see how all these different agreements really affect your intellectual property? Okay, they really determine your ability to protect your I p and it sort of shows you that like intellectual property is affected in every single transaction you're engaging in. Every single thing that you're doing is connected in some way to your I p so you've got to make sure that you've got these contracts in place that protect it okay because you don't want contractors creating content for you and then taking that same content and giving it to some other business you know or using it in some other way you know, you want to make sure that you own your stuff that's what you're paying for often times so another contract that you might want to use to protect your I p is a joint venture agreement now this is in the context where, you know, I mentioned this a little while ago where you might want to team up with another entrepreneur to create something for example, I have a client who is a graphic facilitator, okay, so what she does for a living is she'll, you know, like for example, while I'm speaking here she goes to conferences and listens to keynotes and actually graphically writes out that kino, while the person is talking, so she creates these, like, you know, images in the notes and that's, like, really beautiful s o she actually teamed up with another entrepreneur who wrote an e book, right? They wrote a short book that they were going to self publish on amazon, and they teamed up together so well, one of them was writing the content and the other party, my my client and friend, was actually illustrating it so that's, the joint venture that they did together, and so for something like that, they need a joint venture agreement, and I know she had one because she has she's done several joint ventures, and every time she makes sure she has a contract. So, you know, when you team up with someone and you're your team of with another company or another entrepreneur, you make sure you have an agreement that says things like, who owns the intellectual property? Like, you know, my friend is creating some of this content, right? And so it's sort of hers when she creates it, right? And then this other person is creating her content, and then they're gonna put that content together? Well, that leads to a lot of questions about the intellectual property, doesn't it? Like it's confusing what are the rights that each party has to this I p so let's think about that so if she owns sort of the images and then you've got this other person who owns the words do they so they own those things out right? Right so what can happen the agreement when that stuff comes together? Do both parties have fifty percent ownership? Does one party have one hundred percent ownership in the other party has a license you know, maybe they have an affiliate relationship where they can sell it and generate a certain amount of a percentage of revenue for each one that they sell can the parties you know, strip out their content from the joint products and sell it separately if they want to? These are all questions you need to think about with your business partner and make sure you're answering them and putting them into a joint venture agreement because otherwise you can have a situation where people are confused about who owns the aip so you might have you know, a situation where you've collaborated with someone else you've created this content on dh then one party you know things there how many long it's great you're selling it and then one party decides you know what? I don't want to sell this thing anymore what I want to do is take my content out of it and create this other thing over here well, this affects her right? This affects this other partner so she's not going to be happy if you don't have clear terms to determine who owns the aip what you can do with the I p that brought to the table how your gender how you're separating profits who was handling the operations of the joint venture if you don't discuss those things, you're going to have a problem and I've seen a lot of these joint ventures go wrong okay, so make sure you have a drink venture agreement and then one thing I always recommend to include is, you know, some terms for dealing with disputes. So if it's just two of you you know each one has a fifty fifty vote right there's no tie breaker so if you've got something like that what you and even if you have more people, you should have a protocol in your contract for negotiating the terms, right? So you maybe have you know, if the dispute arises, the parties are required to try and negotiate and resolve the dispute among themselves, so maybe they're required to sit down, have a conversation and try to work it out now if they don't work it out within thirty days or fourteen days or whatever the terms you want to set, then the next step is they'd go to mediation so they'd sit down with a neutral party a neutral third party and both of them would try to resolve the dispute with that mediator okay, so that's another option that you have so you can build that into that contract so that way you don't end up in court you know fighting over intellectual property which is never fun and who's always expensive instead you want to build in you know, terms to resolve disputes because they're bound to arise and I would even go so far as to say this type of protocol of like negotiation mediation all those things have to happen before you can file a lawsuit about it you should put that probably in all of your contracts so that you can work things out amongst yourselves it's always going to be cheaper than going to court sometimes going to court makes sense and that's the right thing to do but it's pretty rare okay it's not common you shouldn't be going to court over every little dispute because it'll cost you way more than it's worth and a lot of instances okay, so you want to reserve that for big issues? S so this is one of the ways to do that and you know, obviously if you're doing a joint venture and there's being created and they're inevitably is I'd be hard pressed to find a joint venture that doesn't involve intellectual property so if you've got a joint venture make sure you have a joint venture agreement you know, and also just so you understand to all these contracts that I'm talking about are actually included in the small business bodyguard legal kent and as one of the bonuses I'm giving you a coupon code t get one hundred dollars off, so if you want to get these contracts that's one way to do it another option is to hire an attorney like I said, or you also might find them in a professional organization. So I want you to actually implement this stuff in your business and not just be learning about it, but actually do it okay? So here's, another contract that can protect your intellectual property and that's non disclosure agreements or sometimes called confidentiality agreements. So this comes in handy when you are thinking about working with someone, and you don't want them to be able to disclose proprietary information that you're going to share with them. So context that might make sense is if you're talking to a potential investor or potential business partner and you know you're thinking about working together, but they need to see your books or they need to see you know the details of your intellectual property or find out all these different proprietary information that's really valuable and specific to your business, right? If you're going to share that information with them, you can have them sign a nondisclosure agreement and that makes it so that they can't steal that content from you, that they're bound to keep that confident secret, not be sharing it with other people on day. Also, you could also include a non in peace so that they can take that information and set up a competing business. So that's, where that comes in really handy. You might also want to have, you know, your contractors signed a non disclosure agreement in a non compete as well, and that's often built into the independent contractor agreement. Ok, so those are some context in which you'll need, and non disclosure or confidentiality agreement. So those are just some of the contracts that will help protect your intellectual property in your business.