Copyright

[Teddy Bear]

Three friends (all experts in our field) set up a business partnership 3 years ago, with a partnership agreement. No copyright/IP issues were discussed or written into the agreement. We all contribute sales and marketing, but my contribution is writing a series of very successful publications that sell under my own name (not the same as the company name).
The managing partner handled the transfer from partnership to Limited Company – still no copyright issues were discussed.
After becoming a company, I was shown a copy of the draft valuation. It stated that the value of the company was based on the products that I write, and that any future sale of the company would include the rights to publish what I have written, to use the ideas (methodology) that are mine, and to use my name. I had never agreed to this, and in fact I am acknowledged as the copyright owner on each publication (as author).
What a mess!
We are now in dispute about who owns the copyright. This has all come about through innocence and naivety, and because we were friends.
We have a really good IP lawyer but the managing partner is insisting that the company owns the copyright – not me.
I am very willing to set up a licence agreement for the company, but do not wish to sell my name or methodology to a third party in the future.
What is the difference between copyright and IP?
Is there a case to say that the company owns the IP/copyright? If so, could a future sale of the company include my name and my methodology, even without my consent?
Thanks.

 

[Deleted member 13430]

In answer to your questions:-

What is the difference between copyright and IP?


Copyright is one form of IP right, others include trade mark, patent and design protection.

Is there a case to say that the company owns the IP/copyright?


Different tests apply to the ownership of different forms of IP. With copyright the rule is that the 'author' of the work, and you claim you are the author of these works, owns the copyright in the work if copyright subsists in the work, unless there is an agreement to the contrary in writing and unless you were in the employ of the company and you created the works as part of your normal employment duties. Were you an employee of this company? Did you conduct the work under commision? Whether you would be deemed an employee etc will depend on your exact relationship to the firm. With trade mark rights (which would include the brand and name), common law rights in trade mark rights unless there is an agreement to contrary would subsist with the trading entity which used the brands and is undertstood to control them by the public, registered rights (if they exist at all in this case), unless they conflict with common law rights or were filed in bad faith, and thus can be cancelled, rest with the person/company recorded as the owner at the relevant IP Office.


If so, could a future sale of the company include my name and my methodology, even without my consent?

Not if you are deemed to own the IP rights, yes if the company does.


It may be wise to contact an independent IP Lawyer/trade mark attorney who is not presently connected to the firm to advise you in a personal capacity, as who owns the IP rights will depend on a lot of factors, but hopefully the above helps.


Link to some trade mark attorney firms websites:-


http://www.itma.org.uk/links

 

[Teddy Bear]

Many thanks for your reply, which is very helpful.
I am not an employee of the partnership/company, and was not commissioned to write the materials. I am one of three owners of the company.
We traded as a partnership for two years, and have been a limited company for one.
In the original partnership agreement nothing was written about copyright, and in each publication the copyright is acknowledged to me.
In fact, the IP lawyer I referred to is not advising the company, he is representing me and the third partner (who is also an author). He says we have a very strong case and that if it goes to litigation we (the authors) would win. However, the managing partner has commissioned his own IP advice and he is being told that the company does have a claim on the IP. I would like to avoid litigation as it is expensive and stressful - but it is a case of convincing the managing partner of our position.
Thank you again for your advice.

 

[OldWelshGuy]

Wow is this messy or what.

As was posted above, it ALL rests on 'at the time'. IP is a complex issue and it WILl cost a lot of money to sort the mess out.

Here is the crux for me.

but my contribution is writing a series of very successful publications that sell under my own name (not the same as the company name).

Are you saying that the business product is the publications you wrote? because if the copyright has been granted to you on the publications, then you are some way along with that at least.

Something you are confusing though is this

YOUR lawyer is saying they are yours. (not in dispute if they have cited ownership in the publications). But HE is saying

"the company does have a claim on the IP"

different things really.

Contractual law is not black and white any longer, a couple of years ago precident was set by 'the spirit of the agreement' .

You will argue they are yours. HE will argue that as you were working in a partnership, and as yur work was the core produt, then it would be right to assume that the company owns the IP going forward. Else the company would be worthless and the partnership inequal!

I would tend to agree with this definition (sorry). I can't see any way how, if:-

1. your work was the product for the company
2. your name was the company brand (or closely associated with it)
3. Your work forms an integral part of the company
4. your work was produced while in the employ (don't confue employ meaning PAYE employment, employ refers to making money for your efforts as a part of it. parttners are 'employed in running the company on a self employed basis' for example.

that you can keep 100% of the ownership for something that was produced for a joint venture, and you aknowledge this here

I am very willing to set up a licence agreement for the company, but do not wish to sell my name or methodology to a third party in the future.

Thhat is your best bet I would say, you licence the right to market the EXISTING products exclusively, but the methodology etc must remain with you, with the new owners being granted a licence.

You seriously need a top IP lawyer and some mediation though.

I am a bit surprised to see that the first course of action legally was to give brief to different solicitors.

a couiple of questions 2the managing partner handled the transfer to limted company2. Did you not sign an agreement? you say there is an original agreement but this is where the 'spirit' will come from. Is ownership or valuation or anythig such like included? Who drafted the valuation and why?

 

[Teddy Bear]

Many thanks for your help. Yes, it is messy isn’t it.

I am a bit surprised to see that the first course of action legally was to give brief to different solicitors.

The third partner and myself did not decide to approach the lawyer about IP initially. We both approached him to ask for advice, as there were many other problems in the company. Basically, the managing partner had breeched the partnership agreement in several ways, and we had not found out about it or understood the implications until too late.

Our partnership agreement stated that each of us should be equally involved in making major decisions about the direction of the business such as the employment of staff (including terms and conditions and salaries), the acquisition of premises and the spending of business funds in excess of £1,000.

The Managing partner appointed his wife to work for the partnership on a salary of £30K, with no job description. He also appointed a part-time worker. We also pay for someone to come in regularly to do the book-keeping. He spent more then £3 re-fitting his office at home, having already decided to lease premises elsewhere. the set-up costs for the new office were in excess of £6K, again without agreement.

When the partnership was established, it was not clear how the time allocations of the three partners would work out in practice. It has since become clear that the managing partner has retained his salaried post (he is employed elsewhere 0.8), and can only devote one day each week to the partnership. Myself and the other partner are working full time for the partnership.

We simply want to be involved in decision-making as was originally agreed. The managing partner had stopped holding meetings – they were just ad hoc or almost accidental, with no record of agendas or minutes and nothing being suggested or agreed – in other words the two of us had been excluded from any kind of strategic involvement in the company. We own the majority share, yet the managing partner is spending money without consultation or agreement. We also had to insist on seeing monthly accounts - it took 5 months before this started to happen.

a couple of questions - the managing partner handled the transfer to limted company. Did you not sign an agreement? you say there is an original agreement but this is where the 'spirit' will come from. Is ownership or valuation or anything such like included? Who drafted the valuation and why?

The transfer to limited company was handled by the accountancy firm that looks after the business, dealing only with the managing partner. The third partner and myself were completely excluded from this until we were asked to sign an agreement, but when we signed we were told that nothing had changed. We had been advised that this was advisable for tax efficiency.

We had been talking to the managing partner about the issues of breech of partnership agreement, but he simply ignored what we said and carried on – he says “We are where we are”. We therefore approached the lawyer in order to try and find a positive way forward for the business.
The managing partner had handled the transition from partnership to company – we were completely excluded from it, which is why I didn’t see the statements in the valuation until 3 months after we had become a company. He put the statement into the draft valuation in order to secure a high valuation for the company and a high value in the Directors Loan Account. I am sure he did this with good will – he would have done this with the intention of looking after all of us and “driving the business forward” – but I don’t think he thought about the implications for me of giving away my name my life’s work to a third party.

We then found that we have an “off-the-shelf” set of articles of association, with all the former agreements in the partnership agreement gone. The lawyer helped us to approach the managing partner with a suggestion that we all establish an agreement in the spirit of teh old partnership agreement that we can stick to and work to. It was during this attempt that I re-stated my unhappiness at the statements in the draft valuation, and this seems to be what the focus of attention is now.