If You Want to Own it, Put a Contract On it

I tell CEOs, “if you want to own it, put a contract on it.”

Maybe you have believed the following statements to be truth:

“If I create it, my business owns it.”

OR

“If I paid for it, then my business owns it.”

OR

“If I paid for it, I own it.”

Truth is, the lie detector determined that was a lie.

In a world of copyrights, the original creator owns the rights. That includes you in your own business and others when they create anything for you. Think brand photos, logos, videos, social media content, courses, speeches, email content, livestreams, and whatever else might come to mind.

Well, how do you own it? Put a contract on it.

In your business, unless you are a W-2 employee of your business and on payroll, you are the owner of all intellectual property you create for the business if it is not explicitly stated otherwise in your operating agreement.

An operating agreement is the contract for an LLC. It is the governing document that lays out the contract terms for how the business will operate and what can and cannot be done with assets of the business and your membership interests (ownership). The LLC operating agreement is equivalent to a Corporation’s shareholder agreement and a Partnership’s partnership agreement.

No matter if you have an LLC, Corporation, or Partnership, if you want your business to be the owner of all works you create for it, then the respective operating, shareholder, and partnership agreement must expressly state so.

How about works you pay others to create?

Look to your contract. If you did not have one, then first let me remind you to never do business without a contract.

Whether there is no contract or the contract is silent on ownership, it is not too late to request revisions to the contract before you sign or secure the rights by using an intellectual property assignment agreement if the work is already done.

An intellectual property assignment agreement is a contract that transfers and assigns the property rights in creative works from one party to another. It is very important it has the correct legal language to complete the transfer of property and meets all of the requirements to be a legally binding contract to hold up.

Beware of contract language like “license,” “exclusive,” or “royalty.” If you see this language, then you are receiving a license (lease), not complete ownership (deed).

Contracts are a powerful asset protection and procurement vehicle when drafted and used properly. But it is not enough to put a contract on it if you put the wrong party at the top of the contract.

⚠️ Remember: if the other party is a business and their operating agreement is silent on who owns the works they create and the contract is between your two businesses, it is highly probable they still own the copyrights because simply put it is the “wrong contract party” and their business does not own the rights it “transferred.” That’s like a squatter trying to sell a home he does not own.

Now that you know, never leave money on the table again because you cannot monetize what you do not own and you can never own intellectual property created by another unless you put a contract on it.

P.S. Never put your name at the top of a business contract unless you want to be personally liable and on the hook if something goes wrong. The limited liability protection from your business will not protect you in this scenario.

__________________________________________________________________________________

About the Author: Chayla C. Jackson, Esq. is a business attorney, business strategist, and legal coach. She is also the founder of Legacy Legal & Consulting Firm, a virtual law firm for CEOs on the go. With her Georgetown Law teaching background, Chayla empowers business owners and her clients to understand the law without getting lost in the legalese. Chayla has practiced law for over 9 years and earned her juris doctorate from Georgetown Law.