idea ownership/protection

cucumber

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I'm thinking of starting my own business (have been for a long, long, long time now). Marketing for small businesses, probably one-man-bands like myself. I'm going to offer, my ultimate deliverables are going to be, business - as in customers buying from them, rather than marketing materials. So, results based pay - small percentage of income of client's business.

Having pitched to someone, and if we seem like a good fit from my perspective, I want to give them a written description of my proposal detailing the details: how much I get (a small percentage of income) of exactly what, when that starts/what triggers it, the fact that 3rd party upfront media/production costs (eg media space in local paper for ad) will be paid by them at cost but with their approval first, what's expected of them in the whole process, and how the agreement/contract can be ended by either me or them should either of us want to at any point: a month's notice, and if it's me ending the contract all work done so far is theirs, but if it's them ending the contract all work so far is given up by them unless an agreement is come to which says otherwise.

The bit about them giving up the work if it's them ending the contract is necessary because otherwise it'd be possible for me do a whole lot of work upfront, as soon as it gets output, my client ends the contract therefore any chance of me getting paid and they carry on using the work I've done - it'd be like buying a washing machine from Currys using their pay in parts option, get the washing machine delivered, then say "actually I want to end this agreement now" and Currys say "oh OK" and leave the washing machine with the customer.

I've just read The Pitching Bible by Paul Boross (see, I am getting slightly serious about actually giving this a go - I wouldn't have read that book otherwise) and in it there's a section titled Copyright:

copyright.png


I'm reading another book at the moment, a marketing one (Brain Surfing by LeFrevre which is about the strategy side of things - pretty good/interesting) and in a piece written by one of the people the author visits:
The current advertising agency business model doesn't account for retaining intellectual property (IP). The current model is designed to sell time and to give away ideas. Once we present an idea to a client, the client owns the idea, which is absolutely not motivating to teams trying to make the next great thing. If an idea can transform a business, or at least create value for the business, the agency should have a stake in the IP.


Any thoughts on this bearing in mind what my business idea is? I'll be doing the marketing plan, including ideas, and the production of marketing materials whose function and form are derived from the marketing plan and idea. The ideas aspect are important so far as I'm concerned. IMO, done well, they're the secret sauce as it were. So here I am, planning to do what the ad agencies described above do, but worse, because I'm offering my clients to pay as they go and the ability to end the contract whenever they want. I'd be fine with that if they had to give up the work and couldn't use it, but from what's described, sure they wouldn't be able to use specific instances of the work, but they'd be able to carry on using the general idea(s).

Any thoughts on this? I'm pretty ignorant of contracts, copyright laws etc. So don't fear saying seemingly obvious things.

In the above quoted bit of text from the marketing book it says "the agency should have a stake in the IP". So does that mean it is possible to protect the idea aspect?


Also, further, any pointers to good books or whatever for help for writing my proposal/contract in nice simple down to earth clear language while covering the necessities and details well enough? In a way that would hold some legal credibility?
 

cucumber

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I haven't stated nor done/had any of the ideas to be protected. The marketing work I do for a client, for their business idea, will include an idea/ideas. Done on a per client basis. They're the ideas I'm talking about; the actual work I do for them. Not my business idea.
 
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cucumber

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To be honest, I think your concerns over copyright are a touch of over-thinking.

If I've understood - you come up with some really cool creative to advertise a product or service, and your customer pays you for your service, and the advertising, and then pays you a commission on all sales it generates thereafter?

Yes, basically, except by "some really cool creative to advertise a product or service" do you mean possibly a one off ad? If so: I'm thinking of something more comprehensive than that. Marketing plan (research, establishment/development of bunch of factors, …) then likely a small handful of marketing materials which work together, and if they fail, or as they fail after working, more marketing materials, also any upkeep and maintenance - an ongoing process probably. Underlying all this would be a, I suppose, a strategy - that sounds a bit grand but I think it's the right description - and a brand idea, an ongoing idea, not a one off ad idea.
 
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cucumber

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> it might be hard to compete with agencies that let customers keep all their sales for themselves

Well presumably those agencies would charge quite a lot upfront, in the first place. They must do, that's their entire payment. Which means for the small biz owner, apart from a larger amount of money upfront rather than spread out, they take all the risk - the marketing may not work at all or very well. They have to pay irrespective of whether the marketing works or not. With what I'm offering, I'm shouldering that risk – because I'm charging for customers/business delivered as a result of the marketing (which has the further benefit of it paying for itself). Not for the marketing itself. I'd buy that if I was them! Wouldn't you?
 
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cucumber

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Anyway, idea protection. I produce and publish marketing materials based on an idea/ideas. It starts getting them business. They pay me a small percentage of that business. They can either keep me on, keep paying me, keep getting marketing to keep getting business. Or end contract so hardly pay me anything. And have to give up the marketing work. But would they have to give up that marketing work? No, apparently not according to the two things I quoted in my first post. They'd not be able to use a specific instance of say an ad, but they'd be able to keep going with the general idea, come up with variations of the specific instances I had done. It's the general underlying idea which is most valuable IMO.
 
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cucumber

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> I don't think I'd want potentially unlimited cost if sales commission was payable in perpetuity.

A small ongoing drip feed payment based entirely on however much income is generated partly thanks to the marketing work, vs, big upfront chunky payment irrespective of whether the marketing is going to work or not. Plus, they can walk, end the contract at any point, but give up the marketing work so therefore, depending on how instrumental the marketing work is in getting the small business its business, give up that new/more business source (although, they could just carry on using the general idea it seems even though the my agreement/contract wants to not allow that).

> As for copyright, I don't think marketing plans/ creatives have a very long shelf life.

Hmm, I don't know. Depends on what kind of stuff. Consider the development and articulation of the purpose of a business, the why behind it, what it stands for. That kind of thing lasts. Maybe not indefinitely, but a good amount of years. And it could, in some cases I think, last indefinitely.

> Products change, tastes change and 80% of your small customers will be bust within a few years anyway

Well yup, there's likely some truth in that.
 
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I suppose all ad agencies have the same issues.

I've had agencies in the past pitch entire campaigns and leave behind full storyboards that I could have ripped off. I'm sure it happens.

If you're developing a campaign with a customer providing input about their product and marketplace, how will you decide who owns how much IP in the finished product?
 
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billmccallum1957

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Personally, I think you are over-thinking the plan.

Option 1 (for your client base) hire an agency and pay up front, no matter how successful or useless they are.

Option 2 is they hire you and you produce the marketing plan (although they have to pay for production costs), and pay you a commission on each sale from the customers you generate.

Then reality kicks in....

In reality, many small businesses wont use an agency, shoestring budgets usually mean that's a non-starter.

How will you be able to measure which customers you have generated and those which you clients develop organically?

How will you be able to come up with a commission structure that satisfies both you and the client, 1/2% - 2% - 5% - 10%? % of what? Cost, net sales, gross sales, profit generated.

So the advice is, don't over-think your plan, just offer it to a client and see what the negotiation brings.
 
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ethical PR

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    1. Of course you can protect a creative concept.

    2. I think your business model won't work for you. You'll end up doing lots of work for very little money. A busy fool is no way to run a business. How will you separate out how what you have done as opposed to what the client has done to get customers on board?. What if you create a terrific campaign, that's right on message and engages the target audience - but the client messes up the operational and/or sales process resulting in sales being lost? There's a reason PR and marketing people don't in the main offer commission only sales.

    3. I got rather lost in your long, waffelly posts, you need to find a way of simply and clearly articulate what you do and clear benefits...practice what you preach and all that :)
     
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    MOIC

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    Copyright/intellectual property plus properly drawn up contracts.
    1. Please explain what the OP's idea is?

    2. What's stopping anybody, including any of the OP's potential customers using the "idea'.

    The OP's idea is centered around a process.

    How is that original?

    In order to have Copyright, the idea must be original.
     
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    3. I got rather lost in your long, waffelly posts, you need to find a way of simply and clearly articulate what you do and clear benefits...practice what you preach and all that :)

    Me too!

    That excerpt that you site is correct, in that you cannot protect an idea, it is however completely wrong in that whole bogus 'envelope' thing. No court will accept that, as there is no way to prove that the envelope was not tampered with and the contents added after posting.

    It was formerly known as 'The Poor Man's Copyright' but nowadays is more often known as 'The Idiot's Copyright'!

    'The Idiot's Copyright' is an old chestnut and I've even heard lawyers, who aught to know better, give out completely wrong advice, advocating its use. If somebody suggests that is a tried and tested method of proving a copyright, you can safely ignore everything else they tell you about copyright law.

    You prove a copyright in a court of law, the same way you prove anything else. You prove beyond all reasonable doubt that at a certain date, you published a song, wrote that script, published that book, whatever. That means witnesses, documentation, published articles, books, CDs, DVDs etc., records of returns from CD pressing plants, dated and stamped LPs, stuff like that.

    On another tack - I have no idea what it is you are trying to ask us, or what it is that you are trying to achieve, but I do warn you - there are thousands of silly books about how to succeed in business. Take all that stuff with a giant pinch of salt!
     
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    cucumber

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    Personally, I think you are over-thinking the plan.

    By the plan you mean the marketing plan I do for my client right? I think so. I think the absence of a good marketing plan and a good idea is a common reason marketing efforts often fail. And the marketing working is necessary for me to get paid. As it is for my client to get paid. It's the bit I think is most important; if I have any "secret sauce", that's it. It's the thing small businesses often miss out on.

    > In reality, many small businesses wont use an agency, shoestring budgets usually mean that's a non-starter.

    Yes you're absolutely right there. Not even an option for, nor even considered by, most small businesses. For a number of reasons. One of which is, as you say, money.

    So their option 1 is actually in reality: Either do a marketing plan themselves or skip that and jump straight to marketing materials production. For that either hire production people, eg a website maker, to produce marketing materials as and when required and/or do production themselves.

    My offer to small business owners isn't: Marketing planning etc. My offer is: New/more business - customers. The reason I'm talking about planning and ideas is because that's a major part of what I'll do in order to achieve and deliver what I'm offering - key part of how I'll deliver.

    > How will you be able to measure which customers you have generated and those which you clients develop organically?

    Generally that won't be possible. In some cases that might be a show stopper (eg where their deals are large and far and few between). In other cases it won't.

    > How will you be able to come up with a commission structure that satisfies both you and the client, 1/2% - 2% - 5% - 10%? % of what? Cost, net sales, gross sales, profit generated.

    Well, that boils down to what anyone who's selling anything has to answer: how much are you going to charge for what you're offering? Yes it's a balance. It'll vary per client. How they charge their customers will influence that, for a start… I'll be aiming at something they're prepared to pay on an ongoing basis, but an amount which gives me a chance to get fairly compensated if successful.

    > So the advice is, don't over-think your plan, just offer it to a client and see what the negotiation brings.

    The plan will only be developed and presented after they hire me (although before they're charged anything). And IMO it's essential to making marketing that'll work.
     
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    cucumber

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    I suppose all ad agencies have the same issues.

    I've had agencies in the past pitch entire campaigns and leave behind full storyboards that I could have ripped off. I'm sure it happens.

    Right, but in that scenario, no sale was made so no agreement was reached, I guess. Which is different to the situation I'm talking about. An agreement is reached before I do them any work. But they don't pay a lump sum. They can end the agreement, and I'm worried, think they can carry on using the marketing after ending the agreement. It seems the fact an agreement was made, makes me being able to cover what I'm concerned about much more likely I reckon (and that's what ethical PR is saying).

    > If you're developing a campaign with a customer providing input about their product and marketplace, how will you decide who owns how much IP in the finished product?

    Don't know. But for my offer to work I don't think that's necessary to answer. I'll be charging for results, if and when delivered (a small percentage of those results). Continual use of marketing requires continual small percentage of results pay. If wanting to end small percentage of results pay, then unless some other agreement is wanted and agreed to, use of marketing including underlying idea/plan is stopped.

    I know I quoted that guy talking about agencies should have a stake in the IP. The situation he's talking about is different to mine. Some similarities but not the same. Plan, underlying idea, having value; that's the general point there.
     
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    cucumber

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    "Protecting" an idea is nonsense.

    > 2. What's stopping anybody, including any of the OP's potential customers using the "idea'.

    I'm not talking about stopping any/everybody using the work/plan/idea. Nothing to do with that. Nor am I talking about stopping potential customers using it. It's about a current then past (past because they've ended the agreement between us) single client not continuing to use the work, including ideas, that was done for them - unless some other agreement has been come to.
     
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    cucumber

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    2. I think your business model won't work for you. You'll end up doing lots of work for very little money.

    Yup, that's certainly a, if not the, big danger with this idea. I'm still thinking of giving it a go though. One thing that would counter that danger is getting great clients with great ideas. Needs further thought.

    > I got rather lost in your long, waffelly posts, you need to find a way of simply and clearly articulate what you do and clear benefits...practice what you preach and all that :)

    Sorry.

    > Of course you can protect a creative concept.

    > Copyright/intellectual property plus properly drawn up contracts.

    So the fact an agreement will be agreed to, that agreement could cover the use of the work including an idea part of it? It's just that from The Pitch Bible, the first book I quoted, it indicates that the idea aspect isn't actually ownable/coverable like that? As I say, I'm really not up on this kind of thing at the moment.

    Having thought this through more, plus what you say ethical PR, this is what I'm thinking at the moment: The types of people I intend to deal with are going to be small businesses, quite possibly one-man-bands. Not ruthless corporations. And I intend to work with reasonable decent people. And for the deal to go ahead an agreement will be made between us. And part of that agreement, in plain English (stated verbally and on paper and to be signed), can simply be, along the lines of: you can end the agreement at any point you want, and from the point the agreement ends any business you do/get no small percentage to be paid to me anymore, but also no use of any and all the work I did anymore including the underlying idea (unless an alternative agreement is desired and reached).
     
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    ethical PR

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    Working with start up and one man bands - many will fail leaving with you having invested your time for no return, others won't do well leaving with you with a very small return for your investment, others won't pay even if they are succesful. Getting clients with great ideas won't mitigate against the danger.

    You need clients with a well researched concept, business plan and financial forecasts who know how to run a business and understand the value of marketing to their business success. Those clients will invest up front in their marketing. Small business people can be as ruthless in business as larger corporations (however decent they might appear at first) or just not very good at running a business and just as likely to not pay their bills (just have a look at the insolvency and legal forums).

    What sort of experience do you have of managing client accounts agency side? Have you being involved in drawing up contracts and project scopes for client work? This will be key if you want to set up as a marketing agency.

    If you want to try this concept, you need to speak to a commercial lawyer and get a properly drawn up legal agreement. You will also need to credit check any business you might want to work with to see they are financially viable.
     
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    cucumber

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    On another tack - I have no idea what it is you are trying to ask us, or what it is that you are trying to achieve …

    I'm asking, in this situation: Client agrees to agreement and hires me. I go to work doing marketing work. Research, plan, ideas, marketing materials. They don't pay me for any of that (so far they've only paid for 3rd party production/media space costs, eg what a printer charges to print leaflets). Then the marketing starts working. I get small percentage of the income of new business from now on. On an ongoing basis. They then want to end the agreement, for whatever reason. That's fine, that's an option that's offered in the agreement. My small percentage of payments stop when the agreement stops. BUT, this is what the question is about, I want also, when they end the agreement, for them to understand they can't continue using the marketing I did for them, including ideas (unless some other agreement is wanted and come to).

    ethical PR says that's quite possible with an appropriately written contract. You're saying, I think, it's not possible - not to stop the use of underlying ideas legally. Yes you can stop them using specific instances on an idea, but not the use of the ideas to generate other instances.
     
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    There's only one big marketing agency that I'm aware of that does this, while most agencies choose a more traditional model. I think that's indicative that a straightforward structure is more effective at being fair to both parties.

    If you also note what they were doing (I forget their name - they were presenting at a conference I attended a while back) to make sure they got paid, they took over EVERYTHING.

    - all the web presences, phone numbers etc were taken over, tracked including generating numbers for all the different campaigns
    - they handled all the calls/sales etc

    Literally the only way they could ensure they got paid, clients didn't lie to them about results (they will do this to you sometimes even if they are 'decent' not because they wanted to screw you over to start with, just because they ran out of money that month so needed to make up a lower sales figure to pay you less..), and clients didn't mess up on actually doing the selling was to take over doing all of that for them - a huge operation.

    I also think you're overestimating how much your competition charges. Not everyone is choosing 'big London ad agency' or you... There are lots of freelancers who do good work, and smaller agencies that focus on small businesses.

    It's not even that good of a deal... the times it works it ends up being ridiculous for the client if the % you take is large (which it would have to be to make it worthwhile for you to work with one man bands and the micro businesses you describe...).

    I'm not saying you can't make it work, I'm sure just about anything can work if you can sell it to people... but there will be lots of things go wrong and lots of cancellations when you've been hugely successful because suddenly they're paying you a lot, but they know roughly what you're doing and even if they honestly hand back all the IP, they will be able to shop around on price for someone to continue with some new creative at a much lower price than your escalating success fee. Also some things you can't take back - help them get tons of local press with some great story ideas, fix their presence online, dominate in rankings... you can't switch those off when they realise they're all set now.
     
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    cucumber

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    Some very useful info/thoughts there Steve, thanks.

    I also think you're overestimating how much your competition charges. Not everyone is choosing 'big London ad agency' or you... There are lots of freelancers who do good work, and smaller agencies that focus on small businesses.

    Well I wasn't really imagining small businesses choosing, even considering, an agency. More, either doing the marketing plan/ideas part themselves or not really considering that part much, and going straight to production of marketing materials, eg website developer/designer. So from what you say there, "There are lots of freelancers who do good work, and smaller agencies that focus on small businesses.", it might be more a case of me underestimating. You've suggested something in between what I was imagining and the big London agency. Does seem to me that small businesses often pretty much miss out on a marketing plan (don't do it fully themselves and hire people who are asked to produce some marketing materials).

    Anyway, useful and helpful general info, thanks.
     
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    ethical PR

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    I think one of your issues is that you haven't really researched your market properly (or perhaps at all). As other have mentioned, it's not a case of small businesses doing it themselves or hiring people to produce marketing materials (only one small element of the marketing mix). Small businesses can and do use freelances and smaller marketing agencies to produce marketing plans, creative concepts, marketing, advertising and PR campaigns for their business.

    What market research have you carried out that shows this isn't the case?
     
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    cucumber

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    Just personal experience of doing some websites for small businesses, and working in a major company's marketing department (some years ago though). In both situations, I noticed an absence of an understanding of the importance marketing planning side of things. Hadn't been done. Didn't value it. Weren't going to do it or ask anyone else to do it. Not in a good way anyway. Generally this is what I've experienced/seen.
     
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    You're saying, I think, it's not possible - not to stop the use of underlying ideas legally. Yes you can stop them using specific instances on an idea, but not the use of the ideas to generate other instances.

    I have a friend that sells just such a service. Once the company has signed up for a specific deal with time-frame, that's it. Hotel did £1m TO before. On-line marketing steps in with two-year contract and hotel does £2m p.a. and my friend's company gets a cut of the extra million.

    Part of the deal is of course, open books, redesign website and generally step in and reorganise the business. Perhaps they introduce some new ideas, such as on-line payments and booking and working with cruise ships and wedding organisers.

    Once that period is over, it's over. The hotel is now free to continue to use that website and exploit those ideas. Complex contractual arrangements can be protected. Ideas cannot!

    The reality is, one of three things happen -

    1. The relationship is so profitable, that neither side wants to cancel.

    2. The company stops using the service and finds TO begins to fail and they then return for more of the same, or perhaps a completely new deal with different terms.

    3. The increase is negligible or just does not happen and both sides call it a day.
     
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    cucumber

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    What is your sales/marketing experience? Reading through this, it's clear you've read a few books, but not clear what you've actually done in the real world.

    Worked in a marketing department, ad agency, for years, and some other things related to marketing.

    Once that period is over, it's over. The hotel is now free to continue to use that website and exploit those ideas. Complex contractual arrangements can be protected. Ideas cannot!

    That's an interesting variation on what I'm describing. Removes the problem I'm talking about - client not using work after agreement ends. Plus doesn't necessarily remove working for client on an ongoing basis. Probably would require a higher percentage of results as pay though to make sure there's a reasonable chance of being fairly compensated in the fixed time - because you'd have to assume it will end at the end of that time. Which would then make continuation of work after fixed time less likely.

    Anyway, point taken, ideas not protectable even with agreement/contract.

    Thanks for that.


    Any pointers for starting to write an agreement/contract bearing in mind I'm pretty ignorant of this side of things at the moment? Creative contracts for dummies kind of thing. Thanks.
     
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    What is your sales/marketing experience? Reading through this, it's clear you've read a few books, but not clear what you've actually done in the real world.

    On a point of order, that was not me!

    Worked in a marketing department, ad agency, for years, and some other things related to marketing.

    One of the problems with working in a department within a larger company, is that one seldom has a view of the larger picture, including percentages and market share - stuff like that.

    Any pointers for starting to write an agreement/contract bearing in mind I'm pretty ignorant of this side of things at the moment? Creative contracts for dummies kind of thing. Thanks.

    Right now, I'm drafting a letter of understanding that is to become a business contract and quite honestly, the best thing is to write down what is agreed to in simple and plain English, using short sentences and avoiding subordinate clauses and commas.

    "X Ltd. agrees to pay Y Ltd. the sum of Z% of all revenues over and above one million pounds Sterling for the period XXX."

    You can even write examples of what a sentence means into your contract. Though, TBH, if you are not sure of these things, write your contract the way you think it aught to be and then get a lawyer to cast a jaundiced eye over the thing and make suitable changes and suggest improvements.
     
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    ethical PR

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    "Any pointers for starting to write an agreement/contract bearing in mind I'm pretty ignorant of this side of things at the moment? Creative contracts for dummies kind of thing".

    Write down how you want your service to work, write down what process you will use for project management of client work, write down what payment terms you want, cover off copyright and how you want this to work, write down process you want to follow if there is a breakdown in the relationship/complaints about work carried out.

    Take this to a commercial lawyer that specialises in marketing and ask them to draw up your contract. They will advise you on what is and isn't possible legally.

    Then for each project you will provide your clients with costed proposals, schedules and plans of work which they will sign off and will form part of your contract with them.
     
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    To my mind, there are two aspects here. First is your understanding of Intellectual property. The second is your business proposition. If you were to hire a good lawyer, and ask for advice on the specifics, you get the advice and the comfort that the lawyer is not allowed to steal your business idea, becasue you are client. Second, you could equally 'pay' someone to assess your idea, test and trial it. But before that, do get your contracts sorted because confidentiality is extremely important when it comes to the protection of the expression of the ideas. TV shows such as Millionaire and the likle that have brough to fame people like Simon Cowell have all been ideas that have been turned into some sort of formation, and then capitalised upon.
     
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    TV shows such as Millionaire and the likle that have brough to fame people like Simon Cowell have all been ideas that have been turned into some sort of formation, and then capitalised upon.

    TV formats are protected almost entirely by industry muscle. The details of the format can, to some extent be protected by copyright law. But if you decide to steal an idea from the likes of Syco, Freemantle, Viacom, or Sony, you are going to have difficulties you never imagined possible. As a TV network, you could find advertising harder to get and programme packages no longer available to you. As a production company, you could suddenly find that nobody will hire you and all your staff will find it impossible to get gigs.
     
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    cucumber

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    Sorry for delay in replying.

    The Byre said:
    On a point of order, that was not me!

    Oops, sorry yes, I knew that. Just made a copy and paste mistake and didn't notice.

    > One of the problems with working in a department within a larger company, is that one seldom has a view of the larger picture, including percentages and market share - stuff like that.

    I know what you mean. It wasn't normal experience though. I won't go into details, just to say, the marketing that company was doing stands as a massive anti-example, devoid of any idea etc. (the company went bankrupt many years later - it was quite a big well known one). I *knew* it was bad at the time. And since then I've been fixing it, in my mind, working out what should have been done. That is a reason I'm into marketing now and have been since.

    > Right now, I'm drafting a letter of understanding that is to become a business contract and quite honestly, the best thing is to write down what is agreed to in simple and plain English, using short sentences and avoiding subordinate clauses and commas…

    OK, great, thanks for that.

    ethical PR said:
    Write down how you want your service to work, write down what process you will use for project management of client work, write down what payment terms you want, cover off copyright and how you want this to work, write down process you want to follow if there is a breakdown in the relationship/complaints about work carried out.

    Yup OK thanks.

    terryashraf said:
    But before that, do get your contracts sorted because confidentiality is extremely important when it comes to the protection of the expression of the ideas.

    Just to say, to make clear, I'm not looking to protect my business idea. The only ideas that I'd like to protect are ones I do for clients (in the event of them ending the contract/agreement), and those ideas wouldn't be so useful generally, only to that client.
     
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