Anonymous creative agency

Client won't pay? Let us take it away...

Our client, a small creative agency, was commissioned to develop illustrations, branding and creative content for a tech start-up. We were asked to step in when invoices for the work it had done for a client went unpaid.

Case Study

Case Type

Copyright infringement

Action

Dispute resolution

Outcome

Our client was paid for its work

Gareth Price

By Gareth Price

Partner

Issue:

We’ve worked with the creative agency since 2014 and it has always been aware of IP issues, especially since it regularly works with freelancers to produce cutting-edge branding and multimedia content for its clients. Following a competitive pitching process, our client was awarded a contract to develop branding and web content for a tech start-up.

The relationship progressed well for a number of months but, as cash was tight, our client was offered stock options in part-payment for its services. When this failed to materialise and invoices went unpaid, Gareth Price was asked to review the matter and take action on our client’s behalf.

Action:

We’d already been able to advise the agency on the IP aspects of its terms of business. Under the freelance agreement, we advised on, all copyright in any works which have been created for our client is transferred to it on the payment of a freelancer’s invoice. In this case, our client was out of pocket, as it had paid freelancers for the work done on the project before its client had paid its own invoices — but as a consequence of this, our client actually owned the copyright in the works.

The drafting and terms of our client’s business were key to the successful resolution of this matter. Under its terms of business, our client grants a licence to its clients to use the materials that they create. The licence continues, provided that the invoice is paid on time, but terminates once an invoice becomes overdue. The terms of business don’t constitute an assignment of the copyright in the works created by our client.

As our client retained ownership of the copyright in the works it had created, it was in a position to have these works removed from various online content-sharing platforms. This turned out to be a very effective way to focus the mind of its client, as its online content was immediately removed.

Outcome:

Our actions led to a renewed dialogue between the legal advisors for both parties and a proposal for payment of the outstanding invoices, in return for an assignment of the copyright in the works created. This was a good outcome for our client, as it was able to recoup its costs in return for the transfer of the copyright in works which couldn’t be reused elsewhere.

Are you a creative agency that needs IP advice?

Get in touch with Gareth Price at gip@udl.co.uk​.

0113 245 2388

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