Clients often want to own all the assets but none of the risk. This is especially true with creative work where copyright can have enormous value but distribution can create all kinds of trouble. How do you nudge your clients toward good ownership rules?
In this episode of the Contract Teardown show, attorney Julie Grantham walks through a document she drafted and advised on: the Agreement for Marketing and Brand Development Services.
Julie shares her advice and experience, including:
- Helping clients navigate modern content production expectations,
- Using specific language for “work product” versus “work made for hire,”
- How to avoid sending combative business signals by misunderstanding the context, and
- Setting realistic expectations for liability from derivative products.
We also ask the biggest question of all: When should lawyers nudge their clients in the wisest direction and when should they simply do the work their clients asked for?
THE GUEST: Julie Grantham is a seasoned legal expert with over 17 years of experience as both a solo practitioner and former General Counsel. She is skilled at collaborating with and providing oversight to cross-functional teams at all levels to achieve set objectives. She has experience handling legal issues regarding hiring, termination, discipline, discrimination, retaliation, wages, executive agreements and non-competition agreements.
THE HOST: Mike Whelan is the author of Lawyer Forward: Finding Your Place in the Future of Law and host of the Lawyer Forward community. Learn more about his work for attorneys at www.lawyerforward.com.
If you are interested in being a guest on Contract Teardown, please email us at community@lawinsider.com.
Watch, listen, or read the transcript below for Julie’s helpful insights.
Episode Links
THE CONTRACT: AGREEMENT FOR MARKETING AND BRAND DEVELOPMENT SERVICES
Guest’s LinkedIn Profile: https://www.linkedin.com/in/julie-e-grantham-b1b043221/
Guest’s Website: https://www.jgranthamlaw.com/
Interview Transcript
Mike Whelan In this episode, Julie Grantham talks about advising clients on new copyright schemes. So let’s tear it down. How are you today, Julie?
Julie Grantham I’m doing great, Mike. How are you?
Mike Whelan I’m pretty good. We took a trip to Memphis. We drove a long time. I’m tired. And then I came back and it was Monday. It turns out Mondays happen. You know, whether you just came back from a trip or not, it’s the worst. But we are talking about important things today, so I’m glad I came back. We are talking about a document. It is this document. It’s an agreement for marketing and brand development services as between random company A and random person B. So tell us, Julie, real quick before we dig into it, what is this document? When are we going to see it?
Julie Grantham You are going to see this document when you have a client that comes in and wants to market and brand develop for their clients. So this is an agreement for your client clients’ clients to say that you got it.
Mike Whelan Yeah. Yeah. And it’s this is sort of an exciting one because this is a document that you worked on. So we’re going to go through a bit, your thinking process, how you were, you know, weighing the different interests of the client, what they actually stated that they wanted versus what you thought was better for them. So it’s sort of an exciting run through your thinking process. Before we do that, tell us about you. What’s your background? What brings you to this kind of client engagement?
Julie Grantham Well, I have been a lawyer since 1999. I have primarily been in-house. I have served as the general counsel for two different companies, one intellectual property technology company, and the other is an international construction company. So I have most of my experience working in-house. I consider myself a business person just as much as a lawyer.
Mike Whelan Perfect. All right. So you will understand how these people are thinking about the nature of this engagement. All right. So before we dig into Deep, I want you to give me a bit of the background. What is this document in terms of who is the client? What did they sort of when they came to you and said, let’s write this thing, where do they after tell us about A-plus photography.
Julie Grantham Great question. A-plus photography has been an old client of mine. The company has been around for decades. So they and they are hearkening back to the time when photography companies were offering our portrait photography that hung in our hallways and living rooms above the fireplace. It’s a mom-and-pop shop that has really grown and expanded. And they are now making their footprint in the digital world and working with their own clients to develop websites, working on client brand development, helping clients have a social media presence that is consistent with their company. So really getting out into broadening their services beyond just that click and develop photography that they have been doing for many, many decades.
Mike Whelan So is it fair to say then that, you know, sort of the engagement with you in terms of their thinking about their relationship with their client is rooted in this: I took some pictures. There are pictures. Someone owns pictures who owns these pictures. And now it’s sort of morphed into this: Well, you know, as esoteric as the digital image was, now we’re talking about brand services and it starts to get really esoteric. So there’s probably, I’m assuming, still sort of rooted in this. I took the picture, you know, who owns this thing? I do. And now you’re trying to move them into a more modern conception of ownership. Is that sort of what’s going on in the background?
Julie Grantham That’s a fantastic way of stating it. And exactly. And the reason why I chose this particular contract is I kind of had to drag my client kicking and screaming to some realizations. And then I also had to just lay out the facts and let them make their choices in some other areas.
Mike Whelan Cool. All right. We’ll dig into that. And I appreciate you sharing this document. The fact that it’s sort of a live document and one that’s been used is really useful. So let’s jump down to three seven and three eight. You know, as you mentioned, they’re creating assets. So there’s this creative act of coming up with, you know, images and brand logos and designs on a website. They’re coming up with this thing. And there’s obviously a question of ownership. So talk to me about three seven. It says trademarks. The photo company may create or develop trademarks for the client. And in these different marks, it says such marks remain the sole property of AP. What do you think about the photography company? What do you think about the way three seven came to be?
Julie Grantham Well, three seven was the one where I had to lay out the facts and tell them they’re going to have clients that are going to disagree with this clause. The reason why is that when a company is hired to draw a logo, create a logo, help create synchronicity across different advertising and marketing platforms. The person that it’s being drawn for is expecting to own that particular item when the work is completed. So this was a difficult one. I did explain to this particular client that they will have clients of their own that will mark through this provision. But again, it goes back to the mentality of where we were a couple of decades ago, three decades ago, when this company was simply a photography company. They believed there was ownership over their work product. So trademark being the first one and which will lead us right into 3.8 is copyright. But so this was this was a clause I didn’t agree with because I think it will always be a clause for this company that their clients won’t agree to.
Mike Whelan Yeah. I want to ask you about work for hire, but before I do that, let’s talk about three eight and the copyright bit. It seems to sort of mirror the idea of three seven. But but tell me about the copyright section.
Julie Grantham Well, the copyright section let me start for a moment and explain on the work made for a hire doctrine; what that really is. So we’re made for hire. It was created by the US copyright law. And generally whoever creates a work is considered to be a, quote, author and it’s automatic owner. But under the work made for hire doctrine, it’s the exact opposite. So if you’re a viewer, if you create something for your employer, it’s work made for hire. It belongs to your employer. Also, in situations where someone hires you, as in this company, to create something for them, it should explicitly be work made for hire, depending on how the contract language reads. There are a couple of other things that go into or made for hire and the criteria that has to be met. I can run through those real quick. It’s really just three main bullet points for clients, specifically orders or commissions to work. So it’s going to be work made for hire. If also the work commissioned is used for the courts, use a nine prong test. I won’t go into that, but most works are made for hire will be one of those nine prongs. And then thirdly, whether the contract with the client explicitly states this work is a work made for hire. So there is very golden language to have in there if you want it to be considered, work made for hire.
Mike Whelan Can we then jump down to ownership to nine one? I’m going to read this because, you know, there’s a relationship between what you were telling the client, what the client wanted, that I think is really interesting. Nine one talks about work product and says explicitly all materials developed by this company for the client are subject to trademark and copyright and patent. Similar protections shall be deemed work product client agrees all title and interest to work product is not deemed works made for hire within the meaning of the Copyright Act. How did you feel about that? Like do you feel like this is even effective? I mean, thinking about those different prongs that you’re talking about, does saying the opposite. You know, it sounded like you mentioned if it says explicitly this is works made for hire then that qualifies does saying the opposite disqualify it?
Julie Grantham That’s a really great question and the courts have been split on this and a few different areas. But this client particularly wanted to have ownership of what they were creating and you’ll see it throughout the document. And it’s here, in here, what you pointed out is, is exactly on point, stating this is work products that we maintain is the opposite of work made for hire. So we’ve said it in one place. This is not about working for hire. And then we’ve explicitly said this is actually work product.
Mike Whelan Hmm. I’m going to ask you to give me a little bit of a 1 to 1 on this just for helping with the context. So I’ll give the example of this show when I, you know, do this show, Law Insider hires me in my company to create these episodes and it is work for hire. And if I’m understanding correctly, that means not only does Law Insider own the ability to publish this video as it is, they also own the ability to iterate off of it, to create other product, to use it where they want to sell it, where they want. What is the relationship between once something is identified as work for hire and the continued use of that work that’s made for hire?
Julie Grantham Again, a great question and that all goes back to what it says in your contract because a company can say it can they could say, let’s divide the six, let’s take six and leave the other six for you. And I say that I mean, will allow you to own this amount, might allow you to own this particular part of the work that you’re creating. But we want royalties on X, Y, Z. So this is when you get into discussions of who’s going to own the royalty rights, is it an exclusive or a non-exclusive right to ownership? Who’s going to be able to license it? So there are lots of ways and there are many different, many different ways for each party to have a percentage of ownership of how this work product is going to be used in the future.
Mike Whelan Hmm. It’s interesting because I’m I’m not advising your client here as someone who creates you know, I am someone who creates creative product. It it is if I were hiring a marketing and brand development agency that had, you know, their contract reflected this kind of understanding of creation, which is really sort of a 30 or 40-year-old conception of what creative work does. I mean, this is sort of a business red flag, not just a contract red flag. This is a conceptual understanding of creativity that might get in the way when you are dealing with the client and you were talking to them about this, how maybe there’s a big picture question, but how do you make the business case for rethinking the nature of creativity and copyright and work for hire?
Julie Grantham Great question. The client came, the client in this particular case, they came to me are of an older generation. Now they do have a younger generation coming in relatively soon. And I can bet you dollars to donuts we’ll be redoing this contract in about two or three years. So it is exactly what you said that how each generation has viewed ownership over the creative process is much more fluid today. So this will definitely be a contract that I think we’ll be revising in 2 to 3 years when the new generation takes over this company.
Mike Whelan Yeah, such an interesting thing dealing with clients, but let’s jump out of this ownership part and see what’s reflected in sort of the indemnities and the liability that’s taken on for the work that’s done here. So let’s jump down to eight and eight one. There’s a section called Client Indemnity: Client Shall Indemnify, Defend, Hold Harmless AP and everybody else. You included the word indemnity with two E’s, which is always fun, you know, because it’s the same. Were just spelled differently, but it applies just language is great. Tell me about this section and how you were thinking about the indemnification bit with your client’s client.
Julie Grantham Right. Well, interestingly, we’ve just spent all this time talking about, oh, my poor old clients that are so old and from another generation. Yeah, I do have to say, when it came to the indemnification and the client liability, meaning their clients, not my client, my client’s client’s liability, they were spot on. They knew that when things went on the Internet, when they were going to be working with their clients and creating social media, managing social media pages, they were very clear that they did not want to be responsible for what their clients were putting out there. And if you look specifically at section eight, which is indemnity, there is a provision that specifically simply calls out their will that my client would be indemnified for any inaccuracy of information supplied by the client, period. So opinions and different things that may be interpreted by the general public as offensive or anything of that nature, my clients and I don’t want to have any responsibility for what they’re putting out there. I want complete control over their social media page or I don’t want any control over it at all. Hmm. So it was interesting, you know, from a branding perspective to see, you know, how is this going to work? You want to have responsibility for developing their brand on social media, but you don’t want to be responsible for what they post took to social media. Yeah. So we had to draw a line with that.
Mike Whelan Yeah. Again, this is a bit 101. And I’m trying to understand, but you know, if I say in a contract, this is all mine, this is mine. This mine is mine, it’s still mine. I want it, it’s mine. But you’re going to do stuff with it and I’m not responsible for that and have a nice day. And we don’t know each other. Right? Like that seems those two things seem to contradict, but they exist in this contract. Do you see conflict between those two? Do you think a court might see those two? Well, you know, it’s reminded me of piercing the corporate veil kind of idea. Like, if your family money is mixed up with this thing with your company, you obviously have more control over this money than you’re letting on as an individual. Is there conflict in here? The court might butt heads with.
Julie Grantham I think there is. There may be. Certainly. I do think that while there are, maybe those inconsistencies in those two areas, interestingly, there is consistency between 8.1 and 8.5, which is the client liability. So like you had mentioned earlier, how there were two provisions of the same contract. One saying it explicitly, and then one sort of I’m saying, and if you will, the word product versus the word for hire. Here we have you’re going to identify me in not only and then I’m going to say it another way. You’re going to indemnify me and you’re going to have client liability. So it’s sort of a way of double saying it to make sure that you’re getting the point home. But that was important to this particular client. They wanted to make certain that they were indemnified from anything that people put on the social media page, that they were branding and creating. And they wanted to make it clear, not only are we identified, but you’re the one that’s liable if something you know, I’m not going to be held liable for what you choose to put on your social media page that is disruptive or that may incite any behavior and other people.
Mike Whelan Yeah. You know, big picture, as I think about this, there’s a bit of a cliché here about, you know, the Olds don’t understand this stuff and the Youngs understand this stuff. And I mean, the reality is lawyers don’t understand this stuff. There’s a lot about, you know, even when we’re dealing with copyright and ownership issues, when you start thinking about this, you know, the blockchain and NFT is an all these new forms of ownership and creativity. There are things that we don’t understand. And so thinking big picture about your role as an advisor, as a counselor, to be able to advise on this particular thing really well, you almost need to really understand that client’s business better than they do. And I don’t know if that’s a realistic expectation if you’re going to nudge them. And if that’s not a realistic expectation, how much is our job just to go and do what they asked you to, you know, just go in and put it to paper and see what happens and deal with the negotiations. Big question. But what’s that relationship for you as you’re advising clients between feeling like, I need to understand every bit of this versus my job is that that client and they’re going to tell me what to do and I’m going to go do it.
Julie Grantham Well, you bring it you bring up a point that actually has even a third layer to it. You point out shining a light on what the client wants and is it going to work, and you know, in 2022. And then the era that we live in where there is such fluidity between online presence and responsibility. But the third layer behind all that is towards the end. The laws are still playing catch up where we’re trying to codify and put into play case law that addresses these issues. So right now, we’re we’re still, right now, we are we have constantly been as technology has continued to evolve, we’re continually in you know, we’re about six rows back in the law trying to find out how do we address this from a legal perspective with the case law we have is historic. It isn’t looking forward. So we’re slowly playing catch up all the time.
Mike Whelan It’s like an anti-Moore’s Law. Is that Moore’s Law where, you know, the computing power is going to double and get half as expensive? And so technology has just been hockey sticking for so long and the law is just sort of I don’t know what’s the reverse of that, sort of putting along and falling farther and farther behind. You know, it’s an interesting thing. And I think especially where the rubber meets the road, where you’re dealing with clients and who are individuals making choices. And, you know, you’ve got to advise them on how to move forward in this fast and also slow context. So I appreciate you bringing this document to us that really gives us an idea of these wrestling matches that you’re having both with yourself and with the clients. If people want to learn more about your practice and what you do, Julie, what’s the best way to reach out to you.
Julie Grantham Either through LinkedIn or JGranthamLaw.com. That’s a website that doesn’t focus on anything that we’ve talked about today. And so it actually focuses on relational contracts. So it’s a different, different animal altogether, a different show altogether. But that’s the best way to reach out to what I’m doing.
Mike Whelan Well, that’s fine. Perfect. I will make sure that that is included over at the website at lawinsider.com/resources. And if you want to be a guest on the contract teardown show just email us. We are at community@lawinsider.com. Julie, thank you. We will see you guys next time.
Julie Grantham Thank you.