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Business & Finance

How to Protect Your Intellectual Property from Theft as a Freelancer

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As a freelancer, in any industry, we run the risk of our hard work being stolen and used without getting compensated. It's a risk of the business, but with just a little education and planning, you can protect your intellectual property so that you have a much better chance of avoiding intellectual property theft.

But what happens when your protected intellectual property (IP) is stolen? How can you fix the problem in a way that is efficient and ethical? This is likely a problem that every freelancer will encounter and should know how to decide what, if anything, should be done.

What is Intellectual Property?

There are two things that have to be present for work to be intellectual property: created work and laws to protect the rights to own and use the work. Another way of saying it is that intellectual property is something created for which there are laws protecting rights to that property.

The most common example of laws not protecting your work is when you give your legal protections away contractually. This is when you sell your work to someone else to use it as their own. Copywriters are an easy group to use an example: they write content and sell it to others who often claim it, legally, as their own. The copy that writers produce (content) is intellectual property. Who owns that IP will depend on the legal arrangement between the copywriter and his or her client.

Use Common Sense

The biggest protection you can create for yourself is to use common sense. Do your homework. Know your clients and put simple measures in place to keep your intellectual property protected. For example, never send off your work to someone you've never worked with.

If someone asks you to send new content without any agreement in place, watch out!

As a freelancer, there is a temptation to sometimes send in work to a new client to show our capabilities. That's a risk you may have to take at times, but be sure to exercise great caution in this situation.

If someone asks you to send new content without any agreement in place, watch out! It has never hurt me to clarify - even if just by email - that I own the rights on a piece of IP prior to sending something to a new client. I have had a few that didn't get back to me, but that's usually because they were hoping to get some free content.

Know Your Rights

Another critical piece to protecting your IP is simply knowing your freelance rights. Understanding the basics of protected intellectual property goes a long way to knowing how and when someone can use your IP, what kind of permission they need to use your IP, and what rights you might retain when giving someone your work.

In short, in the roll of a freelancer, once you've created something (a website, a piece of copy, a script, an illustration), that piece is usually your intellectual property. You own it like you own a car and it has some value (hopefully).

What happens next is where things can get a bit complicated. Depending upon your arrangement with your client, you may lose ownership of your protected IP when you send it to them - uploading, emailing, etc. At that point, they owe you for your work (also usually contingent upon whether or not they accept/approve it). I stress "may" because when you lose ownership depends on a few factors.

Transfer of IP Ownership

Let's further look at how IP ownership is transferred from one party to the next. Your contract or agreement with your clients should clarify when they own your IP. Most of the time they will own the work the second you send it to them. But your contract may spell out that they have to explicitly tell you they accept it before rights are transferred. Other times you may own it until you've been paid. Without a contract, you are risking a transfer of ownership the moment you send it to them.

Without a contract, you are risking a transfer of ownership the moment you send it to them.

To keep your IP protected when sending to a client or prospect, of course, you should have a contract first (which I'll discuss below), but you don't have to have a formal document. Even stating in the email something like, "I retain full ownership of the attached documents until full payment" is a condition upon which they will have to agree if they want to keep your work.

Without going into the full details of legal contracts, suffice it to say that if you make it clear you are not giving your IP rights to them prior to some other action (acceptance of the work, payment, posting your copy online, etc.), then even a simple statement like the one above can mean the difference between winning and losing in court.

Review Submission Requirements

One of the easiest ways to get in trouble is failing to review submission requirements. More and more as freelancers, we are being asked to submit work through submission forms or according to specific submission guidelines, be it copy, software, graphics, or other work. This is fine, but you MUST review the submission guidelines to understand how your intellectual property is being transferred to the receiving party.

In many cases, they own the work outright and are reserving certain rights, such as they will publish your work and you cannot republish the same work within 30 days. Other times, they own the work outright as soon as you send it.

If you are submitting work for something like a crowdsourced logo design, then more than likely you retain ownership of the piece until the client chooses your design and pays you for it. Although, keep in mind that sometimes a website will retain a small portion of rights, such as the ability to display your piece if it is in the top 3 of a contest.

You do have the right to modify these terms by either asking prior to submission if the terms can be different or simply sending your work with your news terms included. But be aware that they may out-right reject your work because they don't like your new terms, even if they love your products.

Non-Disclosure Agreements

Another way to keep intellectual property protected is through the use of a non-disclosure agreement (NDA). When you initially begin working with some clients, there may be a necessary exchange of ideas before you can get started.

One key to protecting your work with an NDA in place is to label anything you send them as confidential.

It's happened to many a freelancer that they put some of their ideas on the table and the client runs off without payment. While a non-disclosure agreement is not an iron-clad way to keep your IP protected, it does help filter out those who may be out to intentionally steal your work.

Even if they don't intend to steal from you, sometimes clients forget their obligations and move along with your ideas in tow. Reminding them that your work was covered under the NDA can help get their attention quickly.

One key to protecting your work with an NDA in place is to label anything you send them as confidential. Even just keeping a "Confidential Clause" in your email footer can help, but it's even better that every document start with a confidentiality statement. Boilerplate it and just copy and paste it in. You can even put your statement in the footer of every page of your documents. The point is to explicitly mark every document as confidential until you have a formal agreement/contract in place.

Protected IP Contracts

We all hate this part of the process, but contracts are very important to maintaining protected IP. What most people don't understand is that a formal document is not required in most cases. Do the formalities make sure all your bases are covered? Sure! But the formalities can also become such a huge distraction that you find yourself burning hours on contract negotiations.

My philosophy is this: for large projects I will take the time to develop a formal contract, but for small projects I don't mind a less formal agreement. Less formal still means that I cover all the basics - payment terms, payment schedules, work quality standards, and the like.

You still want to cover the important information, but for smaller projects I'm usually comfortable with an email agreement. Bigger projects will often have full-blown contracts to make sure everybody is on the same page.

When Intellectual Property Theft Happens

For most freelancers, intellectual property theft is not a matter of "if", but a matter of "when". It's going to happen. Most of the time it's the small projects, but every now and then I've had clients with large projects not pay and still use my work. In some cases, it may just be a matter that late payments and some prevention measures need to be put in place. Or you may need to start with some collections procedures.

Here’s a good rule of thumb: escalate slowly.

Here's a good rule of thumb: escalate slowly. In most cases of intellectual property theft, I've found that some form of communication broke down. Simply getting in touch with the client (sometimes aggressively by calling every number I have on file) usually gets the issue resolved. But when this doesn't work, I take it up a notch.

The next step for me would be to send in my contract and remind them in no uncertain terms that they're in breach of our contract. Simply sending in a legal document usually gets attention, and I get a fast phone call or payments that show up quickly. But when no response is given - usually within 1-3 days, I'll go to the next level.

When a friendly reminder or resending my contract doesn't work, I might send a cease-and-desist letter. This is simply a formal letter demanding that they quit using what is still my protected intellectual property. In the case of a website, I would ask the editor to immediately pull my posts from their site. The same would go for any graphics. If it's software, I'd ask they stop using it immediately. At this stage, you will likely need to set some clear rules, for instance, give them 3-5 days to have the IP pulled (or even better, payment received) and make it clear what will happen next.

If a cease and desist letter doesn't get their attention, it's probably time to get the lawyers involved, although unfortunately for small projects, the time and cost involved may not be worth legal action. You may just need to do what you can to spread the word about this client to your other freelancers (doing so with grace but clarity reflects better on you but sends a strong message), and, of course, never use this client again.

Protect IP

Maintaining protected intellectual property is a serious consideration for a freelancer in today's market. It's so easy to engage a freelancer and steal their work, assuming they'll walk away and not fight the loss. But a little work and planning on the front end can help repel those who might think you're an easy target. And when someone does try to steal your protected IP, whether on accident or on purpose, you'll now have some tools to help you fight back.

Disclaimer

You should always seek independent financial advice and thoroughly read terms and conditions relating to any insurance, tax, legal, or financial issue, service, or product. This article is intended as a guide only.

Photo credit: Some rights reserved by solarseven.

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