A big client is bullying us over IP. Should I cave?

Hey Aunty

We’re a small boutique graphic design firm doing it hard like everyone else.

Our major client has asked to have all native files of artwork be sent across to them – since they’ve become a public company, and policy is to secure all IP.

Initially they were of the understanding it already belonged to them, but I made them aware the IP belongs to the creator (being our company).

We clearly state on all estimates to clients that all artwork remains our property unless otherwise requested – they’ve admitted they’ve never taken the time to read the “fine print”.

We’ve since provided an estimate identifying the investment required to secure the IP and they’re requesting we reconsider forfeiting this and hand over the files.

It’s a substantial amount as a single figure, but more importantly it is fair and commercially acceptable.

This issue has arisen purely through their own ignorance, and they threaten to potentially take their business elsewhere.

We’ve been working with this client for near on six years and it’s been a relatively good relationship for both parties. They do represent a substantial component of our turnover.

Our last conversation ended up agreeing to disagree and now leaves me with the reality we could lose a client because of their bullying and me standing my ground – no winners here.

I’m extremely conscious of not trying to paint a picture of bias; the creative industry has always had a grey cloud of confusion of who owns what. My research identifies as mentioned earlier all IP remains the ownership of the creator unless otherwise stated.

Do I dig my heels in (because my conscience tells me to be true and maintain my integrity) potentially losing them, or do I bend over and let my major client do with me as they wish and carry out their threat of taking their business elsewhere?

F,
Vaucluse NSW

 

 

Dear F,

This is no time to sit on your creative high horse and send a major client galloping off into the sunset.

The large crass public company, struggling with grumpy shareholders, harping analysts and greedy lawyers is never going to understand your position or buy six years of IP.

So here is what you should do. Take off your designer hat and put on your CEO hat. There will be a cost to them to replace your designs, so negotiate a confidential settlement.

It will be substantially less than you want and substantially more than they want to pay (which is zero). Once it is settled, present them with an option to buy the IP whenever they buy a design.

 

Going forward, you should include the option to purchase the IP. First, it could increase your cashflow and second, it does bring to your client’s attention that the IP is not just something in fine print.

 

It is fine to be true to your integrity, but you also have to remain true to your employees, suppliers, shareholders and your family!

 

Good luck,

 

Your Aunty B

Aunty B - Your problems answered by SmartCompany's business bitch

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