#239 Do you own your IP?
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Making assumptions in business is dangerous. I do not have any feel-good stories where a business owner made a heap of assumptions and it all turned out fine. I just do not.
I spent the first 12 years of my career as a litigation and disputes lawyer, helping businesses when things went wrong. These days, I am all about prevention being better than cure. My job is to help business owners set themselves up so they do not end up as somebody else’s litigation client.
One of the most common areas I am seeing assumptions right now is intellectual property ownership.
The Question Most Business Owners Do Not Expect
If I asked you, “Who owns your intellectual property?” you would probably say, “Well, if it’s in my business, then I own it.”
That is the assumption, and it is often wrong. So let me dig deeper. Who owns your brand assets, your logo, your website copy and your internal documents? These are valuable business assets, and intellectual property sits underneath all of them.
Your Logo And Brand Assets: Paying For It Does Not Automatically Mean You Own It
A really common one is a logo or brand suite. Business owners often think, “I paid the designer, so it’s mine.”
In Australia, copyright law works in a way that surprises people. At a high level, the human who creates original work automatically owns the intellectual property in that work, unless it is assigned in writing to someone else.
So if you engaged a designer, the answer to who owns the IP is in your agreement with that designer. If there is no agreement, the IP usually sits with the designer unless there has been a written assignment.
Often, a well drafted design agreement will say something like: once the client has paid in full, the IP transfers to the client, and the designer can still use the work for their portfolio. Sometimes the designer keeps ownership and gives you a licence to use the assets for the intended purpose. Either way, you need to know what you agreed to.
Website Copy: The Grey Areas Matter
Website copy is similar, but it can get even murkier.
If you engaged a copywriter, check the service agreement. Then look at the scope of what actually happened. Did you provide the raw content and they edited it? Did they create original copy from scratch? Did you do a brain dump and they shaped it? The details matter, because they affect what was created and who owns what.
This is where the law loves grey areas, and it is not a great place to sit. You want clarity.
Internal Documents: Do You Own The Documents You Rely On?
Internal documents are another area that gets overlooked.
If you engaged a lawyer to draft your documents, do not assume you automatically own the IP in them. Some lawyers assign IP to the client once fees are paid. Others retain the IP and restrict editing or taking the documents elsewhere.
The same goes for HR consultants, policy templates and purchased document packs. If you buy templates, read the provider’s terms so you understand what you can and cannot do. Often, the IP is not assigned.
Background IP And New IP: What Happens When You Create Things For Clients?
Now let’s talk about the IP you use when you deliver services.
Background IP
Background IP is what you already own before the client engagement. It might be your frameworks, methodology, workshop materials, tools, processes or design approach.
If you are bringing background IP to the table, you usually want to preserve ownership of it. You can still give the client a licence to use it for the intended purpose of the engagement. The key is that everyone is clear, and it is written into the agreement.
New IP Created During The Engagement
Then there is new IP created during the work with the client. Who owns that depends on the project and the expectations, and this is where misaligned assumptions can blow up.
If the client thinks they own it and you think you do, you can end up with fractured relationships and disputes. If you want to avoid that, spell it out.
What is the new IP? Who owns it? Does it transfer on full payment? Is it retained by you with a licence to the client? If you get to keep ownership but they can use it for a specific purpose, write the licence clearly. If they own it but you can use it in your portfolio or future work, write that too.
Hope is not a business strategy. Neither are assumptions.
AI And IP: Welcome To The Minefield
Now, AI.
When you use AI in your business to create something, who owns the IP in that output? It is not straightforward.
First, you need to read the terms and conditions of the AI tool. Gone are the days of ticking the box and moving on. You need to know what the tool does with what you input, and you need to understand the privacy risks because you have obligations under privacy legislation.
Second, remember what I said earlier. Copyright law talks about humans creating original work. There is no clear equivalent yet for AI tools creating original work. We do not always know whether the output is truly original, or whether it is built on someone else’s work.
That means there is a real risk you could be infringing someone else’s intellectual property without realising it.
I am not talking about using AI for note taking, summaries, research or workflow efficiency. I am talking about using AI to create the work itself, your concepts, designs, branding, frameworks or methodology.
If you are relying heavily on AI to produce the core creative output, you may not be able to confidently say it is original work, and you may not be in a position to claim ownership or licence it.
A more defensible approach is using your skill, experience and client instructions to create the work, and then using AI to support the presentation, formatting or a specific assistive step.
If You Do Not Own It, There Is A Fix
If you realise you do not own the IP in something you thought you owned, there is a solution.
You can enter into a deed of assignment of intellectual property with the person who created it. That is a written document that clearly assigns the IP to you.
Yes, it is after the fact. Yes, it is closing the gate after the horse has bolted. But it can still remove risk and create clarity.
What To Do Next
Go and check your agreements.
Review the contracts you sign when you engage designers, copywriters and consultants. Review your own client agreements to make sure background IP and new IP are handled clearly. And take a moment to think about the AI tools you are using, what you are inputting, and how much of the output you are relying on.
Please know that problems with IP are fixable, but ones that are much easier to fix early. So get on top of it today.
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[00:00:47] Tracey: Making assumptions in business is dangerous. I don't have any feel-good or happy ending stories to share with you that come to mind when we're talking about business owners who just make assumptions and think it'll be right.
[00:01:00] As you know, if you're a longtime listener, when it comes to what can go wrong in business, hand on heart, there is nothing I haven't seen. I spent the first 12 years of my career as a litigation and disputes lawyer, helping businesses when things went wrong. Now, fast-forward seven years into this business, I'm all about prevention is better than cure, and so I'm supporting business owners to set themselves up so that they don't end up as somebody else's litigation client.
[00:01:25] So, as you can imagine, there is no room for assumptions in that scenario. Like I say, I don't have any examples that I can draw from where the business owner made a whole heap of assumptions and it all turned out okay. I don't have any. One of the really common areas that I'm seeing lately with growing businesses is assumptions around their intellectual property ownership.
[00:01:48] So if I said to you, "Who owns your intellectual property?" You'd probably say, "Well, what do you mean intellectual property? And if it's something in my business, then I own it." I [00:02:00] imagine, like many business owners that I speak to, that would be the extent of the conversation unless I dig deeper. So let me dig deeper.
[00:02:07] Who owns your brand assets, your logo, your website copy? Who owns your internal documents? They are all really important assets of a business where intellectual property has a part to play. In today's episode, I'm gonna dive in and share with you why it's dangerous to assume that you own the IP when you don't own the IP, and then I'm gonna talk about AI in the context of IP. I've got a lot to say on that.
[00:02:39] First of all, as a business owner, IP is something that easily gets overlooked because growing businesses have lots of needs, and often the business owner is wearing lots of hats and doing lots of things. I get it. But I want to draw you back and ask you to pause so we can just think through the IP and the IP ownership, because sometimes by the time you get to thinking about this, it can be too late, because either you want to bring somebody into the business by way of a, a shareholding or a partner, or you want to sell the business, or there is a dispute because you haven't been paying appropriate licensing fees over the use of somebody else's IP.
[00:03:17] So I want to draw our attention to our business assets at the moment and have a think about the IP. So if necessary, you can go away and make inquiries and check agreements and get clear on whether or not you own those assets, and if you don't, we can talk about what to do then.
[00:03:34] First of all, let's start with the basics. Your brand, your logo. Often business owners think, "Well, I paid a designer for those, so it's mine." That's not automatically the case, as with much of what we're gonna talk about today. In Australia, we've got the Copyright Act, so there's a piece of legislation that says, at a high level, I'll just give it to you on a high level because I'm sure you don't want me to go through it in detail.
[00:03:59] It [00:04:00] says humans who create original work automatically own the IP, the intellectual property in that original work, unless it's assigned in writing to another party. Notice I said humans? I'm going to come back to the AI discussion after we go through this. So if you've engaged a designer to develop your brand, your brand assets, your logo, The answer to who owns the IP in the assets that have been created will be in the agreement. It'll be in the agreement between you and the designer. If there's no agreement, then the intellectual property automatically sits with the designer unless it's been assigned to you in writing.
[00:04:41] And my guess is if there is no agreement to start with, there hasn't been a deed of assignment of IP either, which means the IP in those brand assets currently rest with the designer. Once you dig out your agreement and have a look at the service agreement that your designer issued to you, it'll deal with intellectual property.
[00:04:59] It certainly should. It'll say who owns the intellectual property, who's got the right to use it. Often what I expect to see in an agreement like this when we're dealing with growing Australian businesses is the designer will have a clause that says, "Upon full payment of the fees, the intellectual property in these assets will transfer to the client."
[00:05:20] And there'll be a license to say that that designer can use photographs or illustrations or examples of that IP that's been created for their portfolio or their marketing purposes. That's usually what I would expect to see. That can be tailored, of course. All the clauses in agreements can be tailored.
[00:05:37] It can be tailored, but that's the sort of thing I'd be expecting to see. Sometimes designers won't release the IP. They will hold onto the IP ownership themselves, but they will give you as the client, the business owner, the license to use the IP for the intend- intended purpose upon full payment, of course, of their fees.
[00:05:55] That's what we need to look for when we're going into the agreement to have a look to see who owns the [00:06:00] intellectual property. Like I said, if there is no clause like that or if there is no agreement, ownership sits with the designer because they created the original work. So this can be a really dangerous area, as you can probably start to see, if you don't have clarity over whether or not you own those brand assets.
[00:06:19] Go take a look in your design agreement if you've had someone build a brand for you or develop your logo. Similarly, your website copy. If you've had a copywriter come in and create website copy for you, again, I'd encourage you to go and take a look at your service agreement with your copywriter to see what's happening with the IP ownership here.
[00:06:39] Also here, we have to have a look at the extent of the services provided, and this is where we get into gray areas, and the law loves gray areas. There's always gray areas when we're dealing with anything legal, and it's not helpful to sit in gray areas legally, trust me. So we want clarity. So we need to have a look at what you've provided, what they've produced, what the services were. Was this their original work? Did you just do a brain dump? What happened? Did they tweak your work? What was the scope? We need to look at the scope to understand what's been created and presented by the copywriter to you, to understand where the IP ownership sits.
[00:07:16] Then we want to have a look at that agreement to understand the assignment, who owns it, who's got the license to use it, and so on and so forth. Very similar to the process we just talked through when we're talking about your brand and your logo. Let's now talk about your internal documents. If you have engaged somebody like me to develop your documents, there's different ways lawyers work.
[00:07:38] Personally, I assign the intellectual property in the documents to my clients once the fees have been paid. The client is free to use those documents, edit those documents, take those documents to somebody else later down the track if they want to. They've paid for it, I've created it, but I've assigned the IP to the client.
[00:07:55] Not all lawyers do that. Some lawyers retain the [00:08:00] intellectual property in the documents, and they do not permit clients to edit the documents, to tailor the documents, and they most certainly do not permit clients to take the documents elsewhere. So understanding who owns the intellectual property in your documents is really important.
[00:08:15] Similarly, with a HR consultant, if they're developing your internal processes and systems and policies, or if you're purchasing templates for something. When you're purchasing a template, make sure you're reading the terms and conditions of the provider to understand what you can and can't do with the templates that you're purchasing.
[00:08:32] Often the IP is not being assigned, often. So just read to be really clear, to make sure you're not infringing somebody else's IP with the way you're using your documents. So they're the ones that get overlooked really commonly when we're talking about the general business assets. So I really wanted to spend some time explaining why it's important to understand who owns that intellectual property and those assets.
[00:08:58] I wanna move on now to talk about your unique frameworks or your methodology or your designs when you're working with your clients. I want to talk about this in two parts. One is your background IP when you're working with clients, and one is new IP that's been created when you're working with your client.
[00:09:19] So your background IP is the IP that you already own and you already have before you take on the client engagement, and you might bring that IP to the table when you're delivering services. So you might be delivering workshops, you might be creating reports, analysis, frameworks. You might be creating a particular methodology for a business, or you might be an interior designer, and you might be creating the designs and concepts for somebody's home.
[00:09:46] Whatever it is that you are bringing to the table to allow you to do that is your background IP. And if you're not intending, as I bet you're not, to transfer or assign that IP to the client so that [00:10:00] you may never use it again, you need to make sure in your agreement you're preserving your background IP. Just want to pause here and say not all service providers are bringing background IP to the table.
[00:10:10] So if you're not, that's fine. It's not something you need to worry about. But if you are, we want to make really sure that everybody's clear, you, your client, and anybody else that might be involved, who owns that background IP and who maintains ownership, and that would be you. So we want to see that in the document.
[00:10:28] You can, of course, be allowing the client to use that background IP for whatever the intended purpose of the engagement is, and then you can therefore, of course, give a license to use that in the IP clause in your agreement. Now I want to talk about the new IP that's created when you're working with those clients.
[00:10:46] Who owns that IP? It all depends on the business, the client, and the project. Depending on those things will determine usually what the party's expectation is around ownership of that new IP, but we need to clearly outline it in the agreement if we want to set ourselves up for success with our clients and avoid misaligned expectations down the track, because it doesn't bode well, as you can imagine, when a client is using IP that you didn't intend for them to use elsewhere on another project, at another workshop, with another client, or whatever the scenario may be.
[00:11:21] I've seen lots of different ones, and service provider becomes really grated because the client they think is deliberately doing the wrong thing, but the client made assumptions and thought that they were allowed to because it wasn't adequately addressed in the agreement. So like all things, we want to set ourselves up for success in our agreements and avoid scope for those misaligned expectations, which as we all know, can lead to fractured relationships.
[00:11:45] So clarity is key here. So the new intellectual property, what is it? Who's to own it? Is it to be assigned to the client on full payment of your fees? If so, say so in the agreement. If it's not, if it's to be retained by [00:12:00] you, say so. And then if there's a license Where you're retaining the IP and you're allowing your client to use it for a particular purpose, set that out as a license in the agreement, and vice versa. If the client is to receive ownership of the IP, but you're permitted to use it for certain purposes, say so. Say so in the agreement.
[00:12:21] You can already start to see, can't you, that there are so many gray areas here which can have what feels like landmines often, where we hope that we can tiptoe through, and we hope it'll be all right, and we hope they won't do the wrong thing, or we hope it won't come up. Hope is not a business strategy.
[00:12:38] Neither is assumptions. As I said earlier, it doesn't bode well in my experience, and it can be avoided. All of these gray areas and these landmines can be avoided because we set ourselves up for success in the documentation that we enter into with the other party. And in the scenarios that I'm talking about, these are your clients, so this is your service agreement that needs to adequately deal with this.
[00:13:00] Because then if you find out later that the client is doing something that they're not permitted to do with the frameworks or the designs or whatever it might be that you've created, it's a very different discussion or piece of communication when you've got the agreement to rely on and you're just bringing it to their attention to refresh their memory and ask them to stop doing whatever it is that they're doing with your IP.
[00:13:27] You can feel the difference. That's what I wanted to say about your background IP and new IP that you might create when you're working with your clients. Let's dive in now and talk about AI. When we're using AI in our business to create something, who owns the IP in that? Goodness me, it's not so straightforward.
[00:13:51] There's quite a few variables here. First of all, whenever you're using an AI tool, gone are the days where you can just sign up and click the box to [00:14:00] say, "I agree to these terms and conditions," and go forth and start using the tool without reading the terms and conditions. That's not okay. Gone are the days where we can just get away with that and say, "Oh, no one reads it. It's all right." No, it's not, actually, because we've never been in an environment like we are now, where there is so many AI tools available and so much use of material, we've never been here before. It's new, which means we need to understand what we're using and what that tool is doing with what we input. So we need to read their terms and conditions, I'm sorry to say, but we need to.
[00:14:40] As business owners, it is our obligation to read the terms and conditions to make sure we are comfortable with what we're agreeing to, and please take the time to understand the privacy risks because you have obligations under the privacy legislation as a business owner when you're using AI. You have obligations under the privacy legislation regardless, but we're talking AI, and so you have obligations to know what is happening with what's being input.
[00:15:07] So, now that we understand that, we need to then understand who owns the IP that might be created, and it depends on so many things. One, what are you putting in? What are you asking it to do? What is it producing and where is it getting it? The thing is, when I spoke earlier about the copyright legislation in Australia, I said a human who creates original work will own the IP in that original work.
[00:15:39] There's no equivalent at the moment for an AI tool. So an AI tool that creates original work, there's no equivalent to that yet in the Copyright Act. So we don't know really who owns it. It depends on what's put in, what it's asked to do, what the output is. Because the thing to remember here is [00:16:00] we don't know if what we're getting out from that AI tool is original or if they've just trained off somebody else's work to give us what we've asked for. By using it then, it follows that we could be infringing somebody else's intellectual property.
[00:16:19] You can see the minefields here already, can't you? The reason I share this is because when we're thinking about IP ownership in our business and in our client agreements with our clients, we then need to think about how we're creating that original work. And if you are using wholeheartedly AI to produce all of your concepts, all of your designs, all of your frameworks, all of your methodologies, my suggestion to you here today is that, that one, is unlikely to be original work, and two, there's real question marks over the ownership of the IP, which means you may not be in a position to claim it, and you may not be in a position to license it for use.
[00:16:59] So we need to just step back and think about the extent to which we're using AI to create our work in our business. Just to be clear, I'm not talking about the use of AI for note-taking or summaries or research or workflow efficiencies.
[00:17:16] I'm talking about when we use AI to create our work, to create your concept, to create your logo, to create your branding, to create your designs. If you are a creative or if you're a business owner that's been engaged to produce those things for clients, have a think about what AI tool you're using and the extent to which you are using it, because you need to be able to sit back and say, "Okay, I can actually hand on heart say, this is wholeheartedly my original work, and what I did is I used the client's instructions, my experience and skill," my whatever else you use to create it, potentially my background IP.
[00:17:55] And what I did is I created that, and then I asked AI to [00:18:00] help with a render or to help with putting my methodology into some lovely slides or something like that. That then would be very different to saying, "Oh, I just input all of this data and asked AI to create it." You can see the difference. So we need to be really intentional and really aware when we are using AI in our business so that we're clear on the extent we're using it, so that we've got great clarity on IP ownership.
[00:18:25] So I'm hoping that what I've shared here is helpful for you when you are assessing what to use and when you're giving thought to what you're inputting and what you're asking for it to produce. So that is what I wanted to share with you around thinking through whether or not you own the intellectual property in your business.
[00:18:45] So I've spoken to you about the IP in your brand and logo, in your website copy, in your internal documents, in your background IP and new IP with clients, and then I've dove in and shared with you my thoughts at the moment on the risks and the gray areas with using AI. If we're in a position where as a business owner, you've identified an area of risk and exposure and you've identified that, in fact, for one particular area in my business, Tracey, for example, my brand or my logo or my copy, I don't own the IP because I either didn't have an agreement in place with whoever developed it for me, or the agreement that was in place was silent on this.
[00:19:24] What can I do? There is a fix. Of course there is. There's always a solution, as my children would tell you, because I tell them that all the time. But the solution is to enter into a deed of assignment of IP, so an intellectual property deed of assignment. Enter into a deed between you and whoever created it, where it is very clear that it's in writing and the intellectual property in that concept or creation or piece of work is assigned to you.
[00:19:50] So you can do that after the fact. So if we're closing holes here or, you know, closing the gate after the horse has bolted, we can still do it, we can still remove the risk, and we can still [00:20:00] create the clarity. That's what I wanted to share with you on that. I really, really hope this episode has been helpful.
[00:20:06] As I say, it is a live topic that comes across my desk very frequently, a couple of times a week at the moment, usually. And the reason it comes across is because business owners have made assumptions. They've made assumptions around IP. They've thought it'll be right, or they just didn't realize that the agreement that they'd entered into was inadequate, either one.
[00:20:26] But we can fix it. So go take a look at your client agreements. Make sure you're reviewing service provider agreements if they're given to you so that you're clear on IP when you're engaging someone to do something. And just take a moment to think about the AI tools you're using and the extent that you're using them so that you're comfortable with that process in your business.
[00:20:44] If you know other business owners that you think would get value from listening to this episode, please, please share the episode with them in some way or another. I'd be so grateful, because together, that's how we get the podcast into the ears of even more business owners. As always, thank you so much for joining me. Catch you next time
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