In-depth: Brands are winning the war for ownership of ideas, but ad agencies want a change

When any agency conceptualises any campaign idea for their clients, should they be duly credited for it in terms of both courtesy mentions, royalty or even on a monetary basis, even after their contract comes to an end?

This issue has been debated for decades in hush-hush tones by almost all advertising agencies and brands. There, however, till date remains no clear-cut path or a modus operandi for handling these situations.

What fanned the fire recently was Amer Jaleel’s LinkedIn post calling out Motilal Oswal for not having the courtesy to credit Mullen Lowe Lintas for their new 2022 ad, which is based on an earlier ad conceptualised and executed by his agency in 2017.

BestMediaInfo.com sat down with experts to get to the bottom of the problem. The experts suggested that the agencies should receive the credit for the work they do along with the client at an equally shared IPR.

Sukesh Nayak

According to Sukesh Nayak, Chief Creative Officer, Ogilvy India, “As per the terms and conditions, once we do a creative project, the Intellectual Property Rights (IPR) become the client’s property.”

“While this is the current practice, there should certainly be an IPR of the creator on each one of the individual’s creations, albeit in any creative community, including music, entertainment or even advertising,” he added.

In Nayak’s words, the agencies have no IPR on the ideas that they come up with because they tend to sign it away in their contracts.

“There is no IPR on the idea but only for the execution of the idea, there is a time-bound duration and if you choose to run a campaign beyond that time, you are bound to pay every single person associated with it, including the actors, directors, production house, and so on and so forth but not the agency who came up with the idea,” he said.

Furthermore, Nayak also questioned, “If a company chooses to run a commercial or campaign after the contract has ended in the music or entertainment industry, they are bound to pay perpetuity or renew royalty to everyone involved in the creation, so why not the creator or the person who conceptualised the idea?”

Sandeep Goyal

As per Sandeep Goyal, Managing Director, Rediffusion Brand Solutions, “It is actually very unfortunate that clients so large are stinge in terms of compensating somebody who actually created the campaign. On top of it, claiming that just because your company paid the retainer and thus everything done by the agency for that specified amount of time is your own IPR, it is completely unfair.”

“An agency’s IP is an agency’s property, no matter if it was presented five years ago or five years later, the IP continues to belong to the creator. However, the problem here lies in the fact that there are several people who think they can get away with it in the country, thinking that the agencies won’t react because they want the business,” he said.

Vistasp Hodiwala

Striking a similar tone, Vistasp Hodiwala, Founder and Chief Creative Officer, Underdog and Co-Founder Centrick also said, “Honestly, the agencies don’t have any legal standing for gaining credit of their work, because there is no clause in our contracts to make that happen.”

Hodiwala also pointed out that if one considers taking the client’s perspective, the creative work conceptualised or executed by any agency on a retainer or project basis, for the company, eventually becomes the client’s property since he or she has paid for it. There is no running away from that fact.

But speaking from an agency point of view, Hodiwala said, “But it does leave a bad taste in the mouth because when a client goes to a different agency, which ideally doesn’t want to work on the same chain of thought as the previous agency, but asked to do so anyway, it is highly unethical. How can you take somebody else’s idea and take it ahead? However, there is no legal provision which addresses this issue.”

Mithila Saraf

Similarly, Mithila Saraf, Business Head, Famous Innovations, also said, “In most industries, many of these aspects are not just about what is decided by the law, but they are also decided by the common practice that everybody in the industry has accepted and follows.”

Citing an example for the same in the advertising industry, Saraf said that when a production house makes a film, even though the production house and all the talent involved are compensated for their time spent on making the film, the rights for the film belong to the production house.

“Everybody has accepted the practice of buying additional rights if they want to use that film beyond the agreed duration and even the clients are also okay with paying additional fees for the same. However, it is the agencies who have not managed to establish a practice like that,” she added.

Arvind Krishnan

According to Arvind Krishnan, Founder and CEO, Manja, “The contracts, almost always, clearly assign all IP to clients.  There is no ambiguity in this. If you go by the word of the law, the clients are right even if they decide to not give credit to the agencies who conceptualised a certain campaign. This is a bit like running the non-striker out in cricket. You are going to stir the hornet's nest."

In his opinion, such a practice is unfortunate and if the agencies create lasting value for businesses, they need to be compensated for the same, leave alone being given credit for it.

Soumitra Karnik

As per Soumitra Karnik, an Independent Creative Consultant, “The relationship between agencies and clients is similar to one that is shared with friends on a rather personal level. As part of this relationship, one automatically ends up expecting that certain work ethics won’t be violated.”

However today the relationships are becoming more of a transactional one, wherein the clients often claim that the IPR belonged to them since they were the ones who paid for it, Karnik added.

“It is the agency’s responsibility, or rather fault, that unlike other industries like music or films, where there is royalty and ownership, the advertising industry doesn’t draw the agreements on a 50-50 partnership so that both the parties have an equal stake,” he said.

Karnik also pointed out that in such instances when the emotions are removed and the client becomes transactional, the creative person rightfully feels deceived because, for him, the idea for the campaign was not just an idea but was the individual’s baby.

Moving ahead with the same line of thought, Underdog’s Hodiwala also pointed out that the agency-brand relationship must be based on grace and mutual respect.

“Just as there is an expectation from the agency to pick up the phone and talk it over, even the client could first call up the agency head and say, ‘Hey guys, we are doing this for XYZ reason, and we hope you are comfortable with it.’ Most agencies wouldn't make a song and dance about it. Mutual respect and humility on both sides is a must,” he added.

The way ahead

Commenting on what can be a viable way ahead for the agencies to get credit and ownership of their ideas, Ogilvy’s Nayak stated that it is a prevalent norm in the Music and Entertainment industry because people came together and got it done.

“Similarly, if there is a change that needs to be brought in the advertising industry, all the creators and agencies will need to step forward and present a united front by agreeing on a common set of terms and conditions and get the contract revised,” he said.

Saraf also resonated with Nayak’s point of view and said, “Credit is a must-have courtesy but the agencies should also own the idea that they contributed to a certain brand, even if their contract expires or the duration of using the idea exceeds.”

In the views of Saraf, the value of an idea that any agency comes up with is actually much higher than the value of an actual tangible piece of content or creative. Therefore, agencies should definitely have the right to own the idea that they come up with and just because clients were compensating the agencies for the time spent on coming up with that idea doesn't make the idea one of their own, she added.

“If the client is using the same idea year after year, without working with the same agency, it essentially means that they are gaining value from it. If you gain value from anybody's creation, you should compensate them for it,” she concluded.

On the contrary, Rediffusion’s Goyal had a different take on the matter, “The agencies can’t come together to fight this issue, because they compete with each other and even if it does if the weakest link in the chain breaks, the entire thing will fall down. Thus, there is nothing that the agencies can do in such cases.”

“The agencies can only shame the client in public or on social media to ensure that the brand looks bad if they are involved in such unscrupulous activities,” he added.

Furthermore, Manja’s Krishnan also suggested that in order to combat the issue the agencies need to reframe the way they think about IP and the value they create for businesses.

He said, “The contracts need to reflect this. If a production house gets a royalty on the work they create, why not someone of far more strategic importance to the business’ health and success?”

Moreover, Karnik also highlighted that it is the agencies that throw the idea under the bus at the drop of a hat because they are so busy impressing the client that they are willing to do anything to satisfy their hunger for business.

“At an agreement level, when we’re signing the contract, these things need to be made very clear. The clients are not to be considered to be at fault here, because they can go with the written words and state that it is written in the agreement,” he stated.

Furthermore, Karnik also asserted that if any change has to be brought in the industry, some legality needs to be brought about and that is only possible when the powerful creative people and the Chief Creative Officers will take a call and raise their voices to demand a 50-50 partnership and stake for the idea. They should also have the power to drop a client if he or she doesn’t comply with the agreement, he concluded.

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