EPS 83 - Collaboration Legal Issues: How to Share Ideas without Sharing Ownership Transcript

Erin Austin: Hey, uh, welcome everyone to this month's LinkedIn live. I have these every last Wednesday of the month at noon Eastern. So just so a little housekeeping, these are recorded and you can find the recording in three different places. One here on LinkedIn at my profile. I also have a YouTube channel, uh, the think beyond IP YouTube channel.

Erin Austin: I do. Don't actually don't know, I don't have a link for it, but we can get one later. And, uh, and then also it is also recorded as an episode of my, for my podcast, the hourly to exit podcast, which you can find wherever you listen to your podcast. And, uh, you know, sometimes though, these, uh, these don't go as smoothly as.

Erin Austin: I would hope they would, and I have to rerecord them. But generally, um, what we do today will be part of the podcast as well. So, uh, one thing about StreamYard is it's completely one way. I can't see you out there. Please feel free to use the comment boxes to say hi. And then also as I go through, um, Please add your questions as well.

Erin Austin: Generally, I will talk to you for about 15 to 20 minutes about our topic of choice and and then we'll have plenty of time for questions and answers and in the event for some reason, I don't get to your question. I will make sure that I answer them. Uh, in the comments for this program. So, uh, as we get started, of course, I have to start with a little disclaimer that this is legal information, but not legal advice.

Erin Austin: And it doesn't, uh, uh, create an attorney client relationship. And so if you have specific questions about your circumstances, then you do need to talk to a lawyer about those specifics. All right. So let us get started. So today we're talking about collaboration issues. I know a lot of you, um, ask me about, you know, have plans to collaborate with colleagues.

Erin Austin: I've collaborated with colleagues, maybe even what he's listening right now. And so, um, and there are a number of issues that you want to think about, but collaboration is a great way to leverage your own expertise. You know, it is you're bringing your ideas. Uh, collaborating with somebody else with, um, complimentary ideas that is very much the 1 plus 1 equals 3.

Erin Austin: and so, um, while we'll talk about a couple of things to be mindful of, I do think they're very valuable and a great way to leverage our intellectual property. So this is a the 3rd step in, you know, my audit protect leverage framework where at the 1st step with audit, we make sure that we own what we think we own.

Erin Austin: We don't want to infringe other people's rights as we're creating our leveraged offers. And so we 1st, make sure we own everything when we do have rights that are valuable. We want to make sure we're protecting them using agreements and copyright registration. General. As appropriate and then leverage and collaboration is 1 of those fantastic processes.

Erin Austin: So let's get going. So, as you know, surprise, absolutely. No. 1, uh, the main focus will be the intellectual property. Elements of collaborations, but it is curating a partnership. So there are lots of things you need to think about. You know, we can get very excited about our ideas and and we should be excited about them and who we're going to collaborate with.

Erin Austin: But we do need to be thinking really kind of clearly and articulating what we expect to put into and get out of that collaboration. And so these are just some of the things I want to make sure that you're thinking about. As you enter a collaboration, uh, because it is creating essentially a general partnership.

Erin Austin: And so we'll talk about more of that as we go on. But, um, it's not just, you know, the fun times that you're having during the webinar. There's a lot of stuff behind the scenes that you also need to be thinking about when you enter a collaboration. So, um. Yeah, by the way, the, all this stuff will be available to use.

Erin Austin: You'll have these slides. Um, but let's, let's talk about intellectual property. So there's 2, uh, angles. We need to look at intellectual property with our collaboration. 1 is with respect to the pre existing materials that. Each collaborator is bringing to the collaboration and then the new materials that will be born from that collaboration.

Erin Austin: So, with our pre existing materials, I mean, the reason you want to collaborate some with someone is because they've got some great process skill method training, something that, you know, combined with yours would make a great result. And so. On the front end, you're going to need to give each other permission to use your pre existing materials.

Erin Austin: And so you will want to make sure that license is very clearly, you know, always. I mean, I won't say this again that I want everything be in writing. Right? And signed by all the parties. But, um, but you want to make sure all these things are very clearly. Um, um, set forth, so you want to make sure there are limits on how they can use it.

Erin Austin: You don't just give them a license to do whatever they want to with your pre existing materials in particular, not allowing sub licensing. This will become much more important as we move through this, um, conversation and then mutual indemnification. If I, like, take something off of, you know, chat GPT or we're going there, it's, you know, I have something AI generated and then I contribute it to the collaboration and I don't really have the rights to that.

Erin Austin: And that becomes a source of a claim. Then we would want, you know, we want to make sure. Everyone who's contributing to the collaboration is standing behind the materials that they are contributing to the collaboration. But the, the biggest thing, the thing that surprises everyone the most is what happens with the new materials that are created.

Erin Austin: And so it's kind of a funny concept. It always messes up my slides, by the way, kind of a funny concept that. In the absence of something in writing, we're going to have something in writing, but I want to, like, put the fear of intellectual property law in you that if you don't have something in writing, what will happen is that the default is that each collaborator owns 100%.

Erin Austin: Of the new materials that are created, and it's a strange concept, but it basically means that each person has the same rights that 1 person would have if they owned it by themselves. So they each own 100 percent so some of the terms that. All mean the same thing, the same concept of joint ownership under intellectual property law, under copyright law in particular.

Erin Austin: Co ownership, co author, joint author, joint ownership, co copyright, joint work. They're all talking about the same thing where the default under copyright law is that those co authors, co collaborators Own 100 percent of the new materials that were created in the absence of something in writing. So, so how does this happen?

Erin Austin: It happens when each party, each collaborator makes a copyrightable contribution. And so I'm not going to talk about what copyrightable is today, but you can, uh, search, you know, my. Prior linkedin lives or my website for what copyrightable means, but it has to be. So if someone does give an, for instance, um, if someone did contribute something that was in the public domain, that would not be copyrightable that they would therefore not be a co owner.

Erin Austin: Um, if somebody just contributed, um, you know, a map of the United States, that's not copyrightable. So, so it's something someone's contributing something that is copyrightable and to the final work, and it is the intent of the parties that all the contributions will create a merged. Unified whole. And so what does that look like?

Erin Austin: An example here. So 2 people co create co author jointly author and illustrated children's book. So 1 of the co authors provides the text. The other co author provides the illustrations. So each coauthor will own 100 percent of the entire, so the writer doesn't own the text and the illustrator artist doesn't own the illustrations.

Erin Austin: They each own 100 percent of the entire. And so, you know, here you're like, okay, well, I guess that's kind of makes sense because one's giving, you know, creating half and the other one's creating half. Okay, that makes sense. What if 1 party does 75 percent of the work? Let's say it is a chapter book and it is.

Erin Austin: Um, so most of it is text and maybe at every chapter, there's an illustration, but it isn't part of the entire. A whole of that book, what happens then is still the same if each party contributes a copywritable, um, element and, um, if it is intended to be created to create a. A single whole work that will be, um, sold together as a unit.

Erin Austin: You still have each co creator owning 100 percent of the entire work.

Erin Austin: I have a question. I will go ahead and show it here, which is what if someone contributes already copyrighted content, well, they have to. Own the rights to it. So I'm going to assume that they own the rights to it. And that would be the same thing. It's, it's remember that copyrights arise at the moment of creation.

Erin Austin: So you might be creating something. So, so you might be, um, it might be the preexisting material that we talked about that you're licensing in, or it might be something that you are contributing. As part of the joint work, and so it will be 1 of the 2 buckets. So either you own it. It's pre existing and you're licensing it and you need to own it or have the rights to contribute it or you are, um.

Erin Austin: You know, maybe you're creating a derivative of something, like, you have a course and you're contributing, um, something that's derivative from it. So that would be, um, something new, but but based on something copyrighted. So 1 of the 2 is going to. To be the case,

Erin Austin: so, uh, so this is why we need collaboration agreements, because unless you have an agreement to the contrary again, jointly, equally owned, no matter who contributed how much. All right. So why does a big reason this matters? It's, you know, kind of, you know, the 100 percent 100 percent is kind of, um, you know, okay, that's great.

Erin Austin: What does it mean as a practical matter as a practical matter? It means that when each person owns 100 percent of the copyright, they can individually without consent of the other co authors exploit it. The copyrights as if again, they were a solo, um, a solo copyright owner, so they on their own without consent of the other copyright owners can grant 2 3rd parties permission to use the work.

Erin Austin: Um, it. Can only be non exclusive, but they don't need the consent of other parties. They can sell, like if I own my, my hundred percent of my, of that work, I can sell my entire interest to someone. And now you have another joint owner that you didn't know you're going to be in business with. And, uh, and then you can create derivatives from it as well.

Erin Austin: And so these. Are things that are the default if you don't have a, uh, collaboration agreement in place that, um, modifies this, these are just some examples. Obviously, I mean, anything that a single copyright owner can do co copyright owner can do without consent of the others, except grant exclusive rights or sell.

Erin Austin: The other thing is, um, or sell the whole thing. You know, they couldn't sell the whole all the copyrights in the book. So. What we do have, we do still have a duty to account to the other, uh, the other owners for any profit. So I can take my, you know, that illustrated book and I can license, you know, non exclusive rights for, you know, all of.

Erin Austin: South America, um, to a publisher down there. I don't need to get consent from the other co owners, but I do have to account and pay and share the profits that I get from that license. Um, and so again, you know, you can't sell an exclusive license to South America, but I can sell a non exclusive license to all of South America, um, which obviously would affect the value of the entire property.

Erin Austin: So we want to make sure that we have the vendor, uh, we're on agreement on how to do that. So what do we want to do if we are thinking about doing a collaboration? One, we have the considerations that we talked about up front, but specifically with respect to our intellectual property rights, we want to make sure we are addressing, you know, ownership.

Erin Austin: There might be a reason for one party to Own 75 percent and the other own 25%, which is really important in the sense of, like, how will revenues be split, which kind of goes to the revenue sharing as well. You know, you want to have any limitations on use. You know, can you create derivatives from it? Can you, um, license, um, parts of it to, you know, look at our example, South American publishing rights.

Erin Austin: And when, when we talked about the pre existing material, the beginning, you know, what can be done with the rights going in, you know, if we haven't clearly. Set limits on what is being contributed in preexisting material those, the, the sub licensing rights, then those would pass through to my co owner and therefore to, you know, who I sub license it to and so it really starts at the beginning for any materials that you're contributing, you know, your preexisting materials.

Erin Austin: Controlling what happens on the way in, and then your collaboration agreement will also control what happens with the joint work and how it can be used, um, transferred, um, exploited on the back end and revenue sharing. There may be reasons to split revenue sharing. Maybe 1 person, um, you know, needed to.

Erin Austin: Um, you know, wants to just get a flat fee or something, and the other one's willing to take, um, risk on the upside. And so maybe you go, you know, you sell the rights, you know, publishing advance, one person gets 100 percent of the public publishing advance, and the other person gets all of the royalties, you know, because it's so, you can do, I mean, these are agreements.

Erin Austin: There's not. Um, any statutory issues, you know, you can make whatever deal makes sense for your collaboration. All right. So that is what I wanted to talk to you guys about. Um, I would love to get your questions comments and, uh, see, uh. Is there anything else I can cover today?

Erin Austin: And by the way, like, you know, again, if things come up later, feel free to put it in the comments at the, um, you know, in LinkedIn, and I will get those as you get normal comments and LinkedIn to any post. And I can, um, answer them there. I do welcome everyone to connect with me. If we're not already connected with me on LinkedIn, please feel free to do that.

Erin Austin: And I also am happy to take. Suggestions for future LinkedIn lives, I, um, like to talk about copyrights in particular and contracts and how the two work together. Like, this is today's is a perfect example of how the two work together. And, uh, and so, um, the pre existing, uh, was the 1st slide. I'm going to go back to it.

Erin Austin: We got a little bit of time.

Erin Austin: So, the pre existing materials, um, is when we're coming together as a collaboration. I'm going to assume that each of the collaborators has something valuable to bring to the table. That's why we are working together. Now, it might not be, it might be that 1 of the partners is just a fantastic facilitator or, uh, you know, or all of the materials to be created within the collaboration.

Erin Austin: But if, for instance, you know, you have a course. And you're bringing some parts of the course with you, and that will be incorporated into this collaboration. That's going to be maybe have, like, a course on the Internet. That's kind of a DIY and you're going to be doing a collaboration. That's going to be an all day summit.

Erin Austin: And you're going to be taking some of the materials from your course. And bringing it into this all day summit, you will want to make sure that at the front end that you have a license, which very clearly defines how the joint venture, how the collaboration can use your preexisting materials. And it is especially important.

Erin Austin: It's always important when you have an ultra property to have things in writing. Um, but it's especially important because what, um, ends up in that, what the joint works that come out of the collaboration, what you're creating for that all day webinar seminar, for instance, that will be a joint work. Um, you want to make sure that what the co owners can now do with your pre existing materials has been limited.

Erin Austin: And so you've limited it at the front end. You know, sometimes we forget to limit it on the back end, but at least you've limited on the front end. So that's

Erin Austin: all right. Everyone. Well, thank you very much for joining me today. Um, hold on. You got another question. Let's see. Hi, Christine. So, um, when starting negotiation for collaboration agreement, how much do we want to spell out desired terms versus asking counterpart to make suggestions? Well, a collaboration agreement should really be that.

Erin Austin: I mean, if we go to the, um. Considerations, I mean, we should, you know, you should start with the end in mind. I mean, you're a facilitators. I know, you know, like, what is it that we want to get out of? Like, what do we want the transformation to be with this collaboration? And so, and then what. Or each, what is each party bringing to it?

Erin Austin: And so someone can be the driver. Often there is a leader. I mean, there's not, you know, it's not at all unusual for for 1 person to kind of drive the collaboration forward and they're really kind of bringing multiple people in. Certainly that happens with summits and things like that, where there's maybe 1 person driving and they're bringing in other collaborators.

Erin Austin: Um, but it depends on, you know, who has the, the. Um, a better idea of where it's going to go. So if if 1 collaborator has the big picture, and they're bringing in the resources that they need to, to, um, make that big idea come alive, then they're going to start the negotiation. Um, but sometimes it's 2 people who, you know, go, you know, we should work together and you're going to do it together.

Erin Austin: Um. Uh, you know, sometimes it's not a collaboration. Sometimes it's literally just a license. It's literally could be that, you know, driving force will say who really just needs to get access. To somebody else's preexisting materials, I wouldn't call that a collaboration. I would call that a license. Um, but when I'm talking about collaboration, like we're really working together to create the new joint work, if that helps.

Erin Austin: All right, everyone will have a wonderful rest of your day. And, uh, and thanks for joining me.