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Who Owns Your Business IP? · Pitch to Product

• Dan/Peter 9-17: I'm gonna play Mr. Customer for a second. I got everything figured out. I did something I got my logo done on Fiverr. Do I own the creative rights to that? No, you did not. Dan, I I got the CAD model done on Upwork. Do I own the creative rights to that? Not unless you have a contract. Do I own the IP to that? Not unless you have it spelled out in a contract. welcome to another episode. I'm Peter Drakulich. I'm Dan Gonyea And this is fifty two university episode number three. Wow. And and this is a great topic because we just got thrown this. It's gonna be something we did we're gonna do tomorrow. how unprepared do founders and business owners have to be? always un always prepared. to be unprepared. Exactly. If you don't live in that in that life cycle. So here we go. Yeah. the topic. Who owns what you build in IP? Work for hire when you and it's a one paragraph that that you know is in every contract that we send out there. Who owns the IP? And you should read you should read it twice so you understand it. Yeah. So again, we don't own any of the IP. So that means you guys own the IP. It's your idea. You're hiring us. I don't want to take any responsibility for your IP. Anything that we do, you know The question is we take responsibility for making the product for you. Yeah. And I think there's some realities that we're we're gonna address in this about like, you know, there's some IP that you don't own. Like if I'm using a twenty megapixel camera that can zoom in ten X and I'm buying it off the shelf, you don't own that. Right. Absolutely. Right. The software belongs to somebody, but you don't have the upfront costs. I would never tell you to spend a million dollars to make your own ten milli meg megapixel camera that sucks. Right. Right. Look at I think you you you talk to clients more than I do. I think this might be one of the number one questions to ask is like, who owns the IP? Like if I I'm turning everything over to you guys, how can I trust you? Who owns it? And simple answer to that is we're very clear up front. Well, we don't own any of it. Steve, somewhere in here, pr please add a link. There is a there's a national, like it's a federal law. Like there is if you hire me for work, you own the IP. If I'm doing work on your behalf, you own it. But let's get in the let's get into this even clearer because I think this is where IP attorneys make their money. And you know. There's a there's a small section that's it's called creative rights. So let's keep on track here, right? So well again it by the end of the segment. Yeah, by the end of the segment, you're gonna understand any any development contract, or any ours or anybody else's, you you need to understand the contract before you sign it. So we're gonna clarify that for you, at least our contract. Yep. So the word the word of the day is work for hire. Right. All right. That means that you are hiring us to do work on your behalf. I understand. We're in the IP space. So that is a valid question. Yep. the definition it's a legal arrangement between a person and a company paying for creative or design. whoever's paying for the creative or design owns the results and intellectual property outright. There's no question about that. So Steve will put that link. The one liner is if it's not spelled out as a work for hire in writing, ownership can get murky fast. Yeah. So that's probably why people are asking it because I'm sure. They can told or a creative agency will like the I I've come from the creative agency world. I've worked in the automotive industry with plenty of them. they own the creative rights. Okay. Which means if I leave them, they I I'll my toys get left behind. Well, so that includes my slogans, my c my graphics, the words, everything they built for me, they own the creative rights too, unless I have this specific word in here that this is work for hire. So We're happy to expand on it. Usually on this one here, rather than argue and show you my contract, I just put an addendum that their attorney says and I'll sign it every day. Because I don't, I'm not here to steal your idea. The very first thing on our website that you see when you fill out the form is before you even you put your name, you put your number and you put your address and your email or so your email. And then the first thing I do is have you hit an acknowledgement button that we are not here to steal your idea. We are here to Have a conversation, you own all your creative rights and it's under nondisclosure. Exactly. And look at th I I just perused this a little bit as you were talking. you talked a little longer. I could have I gave you the time, yeah. but it it really just boils down to don't do anything unless you have a contract. And believe me, I'm I grew I grew up in Maine and I was always taught at a young age to handshake is worth any more than anything else. But now I understand, but I've I I I As I got older I understood that you've got to have i things in writing. So Dan, I'm always I'm gonna play Mr. Customer for a second. I got everything figured out. I did something I got my logo done on Fiverr. Do I own the creative rights to that? No, you did not. Dan, I I got the CAD model done on Upwork. Do I own the creative rights to that? Not unless you have a contract. Do I own the IP to that? Not unless you have it spelled out in a contract. So you understand how dangerous this is and I appreciate that there is good contractors out there that have helped you get to a certain point. Make sure it's I'm not even sure the people on Upwork and Fiverr even know that they actually own it because they did it. Well, that that's the only good part is that they don't know that they can claim it. But I will tell you the US PTO, the the patented trade off trademark office would absolutely have take issue with it. Right. So be careful. now that you know, you know. Yeah. Well, again, it's it's written down here. You know, Steve did a nice job. Ownership isn't automatic. It's it's written. It's very simple. Just make sure it's written. Obviously, our contracts have clearly spelled out that you own all of that. And as you heard from us yesterday, you gotta pay you do have to pay the bill. Yeah. Well I mean look at if if you think if you think that anybody does anything for free. Right. it doesn't. It comes with strings attached, right? We look at we grew up in the what do they call it, those timeshares. yeah, yeah, yeah. Where the where they had you come in for a vacation and then you couldn't leave. Until you signed something, yeah. Yeah. All right. So what's actually being created during the build and who should own each piece, right? Number one core idea concept. That's yours. Yep, absolutely. I didn't come up with the idea, did you? No, no. And look, I always tell people we could not spend a million dollars a day to go and find the next idea. No. It's it's you that are that woke up one morning. Yeah, we all we have good ideas, but yeah, God, we we don't have the hundreds of ideas that our clients have. Right. But is it a good idea in a gray space in the market? Right. That that takes 350 million people looking for something on Amazon or on Google. And when they can't find it, it's generally a good idea. Right. Because why wouldn't it be there? All right. Brand assets, name, logo, visual identity. should transfer to you as work for hire once paid for the deliverable. Absolutely. Yeah. That's very clear. And so look, I'll go one further, right? I don't even wait for that checkpoint. We put everything into a Google Drive. We do. Right. And again, this is the easier part. Ownership transfers every second around here. Everything goes into your Google Drive. The old stuff, the new stuff, the the version two, three, four. It's yours to keep. Now, again, it does come with some challenges. And if you're not paying attention to it, you need to go find the final version because you just have to know how our folders work. So that's the easy part. Good news is we're building a little what do we call it? A platform portfolio. where you actually have all your day-to-day information and you can go and find the folders easier. what's that what is that gonna be called? So I can't remember what we call it. We talk about it every day. Okay. What is it called, Steve? The portal. Thank you. Thank you. actually, there you go. Thank you, Steve. Pete calls it the port hole. Port hole. Because he's from Canada. Right. He thought it was port hole, not port. I thought we're looking out the port. There's a hole in the port side. I love him. He makes me smile. It also makes me cry. so again, the next one's product design and tech packs. Obviously, that's engineering blueprints, those are yours. The fourth one is the interesting one. This is this I you know factory side improvement. Reading this now. so it's what's interesting is is that when we tool up for you, you own all the tooling. However, if we decide not to tool up because the factory has an existing tool, you do not own that, then. And we use that tool for whatever ancillary part that we might be making for your total build, you don't own that. And it's happened to us in the past where some IP some engineering IP or design IP, when we were building an electronic piece, you know, the customer didn't own that part of it because they didn't pay for it. Now that that was well over 150,000, 125 if I remember in that range to have your own. And Is it worth it? And well, see, that's the thing. At the time, we didn't, no, it's not really worth it. I mean, we're building we're we're building a thousand to twenty five hundred pieces to get to market. now when you start to blow up a little bit and you want to re-engineer that component of it with profits, then it makes sense. Or maybe it doesn't. I don't know. That's a decision that the client has to make. But that would be the one case where if we're borrowing something from the factory, you wouldn't own. That part of let's unpack that because I look at I think that's where the ambiguity really hits home. Why would I want to make a really like do I want to start from scratch from everything? Even though we could, right? We can start from scratch on anything that you want. Right. How many people can afford to start from scratch on a brand new cooler design? Well on a brand new electronics. Yeah. Right? Why would we not? And again, this is the conversation that you have. You should either figure out are you an accessory to a product? Or are there products that are already that we can borrow a tool, which you will not own the IP, but we can put your brand on. It's not because you should. It's because it saves you a ton of upfront cost. If we're if the goal is to make a thousand units and build and break into the market and go show your value proposition, don't go past the core value proposition. The core successful product, you have to stay on scope. And we did that in the last the last podcast, the education. But this is where the scope of work now matches with the IP that you own or don't own. Do I really need to own the IP of a product that that does that's already out there that can buy in volume without the investment cost? Maybe not. Nope. So I I use the the megapixel camera, right? Like do I a twenty twenty megapixel camera that can zoom in to a hundred eggs? If I can buy that off the shelf for five dollars, why would I spend a five million dollars to make a new one? Right. So factory side improvements, that's an asset that we can utilize for your venture to get started. It is always phase one. Yep. Right. When you build a house, you don't just start, you don't, you know, you either tear it down, but there's always phases. You build the foundation, you build up. I would say that this is exactly in that category. Let's identify what we can use to save upfront cost. Because I'd rather, what do I always say? I always say I'd rather we have money left over for marketing than to invest in things that I don't need to own right now. Yeah. And again, tooling can be done. It's always nice to do it up front if you can afford it. But if you can't afford it, What's the second most important thing? You need inventory. Nothing happens. It's the cheaper egg conversation. Having inventory, if that means that you have to borrow a tool, if that means that it's not going to be a hundred percent your product initially on that first thousand to twenty five hundred pieces, does it really make a difference? Well, this is where I can already feel the inventors on the other side leaving comments and I'll I'll go into a a conversation. It is the brand is more important than your product. Right. Because your product Doesn't go anywhere if you don't have a brand. The brand, you can as you build the brand, has Apple changed their product how many times? Yeah, they started off making computers. When's the last time? Now they still make laptops, right? But what are they more known for these days? Yeah, of course. Right. So that's what I'm saying. They they pivoted to different products. The brand has stayed the same. Right. And there's a million other examples of that. But if you start with if you inventors always want to just build a product, they forget that people are emotional. They forget that people want to connect to something and they want to feel how that product makes them feel. Right. Not how it made the inventor feel. So get off your high horse there. Why is why is Nike so popular? The swoosh. Yeah, it's the brand. They just do it. It's the image that you want. It's like, you know, it's the image. I mean, ca I'm gonna tell you right now that the difference between New Balance, Puma, Adidas, and Nike, you it'd be almost impossible to break those four shoes down and and tell us which one is a better shoe. They're probably all made in the same town in China. I'll tell you what the difference is. Those all who is the brand behind those brands? I can only tell you one. Yeah. Nike is Phil Knight. We all know that. It's synonymous, right? I'm not buying a Nike. I'm buying it Phil Knight was different than everybody else. Yeah I would argue that's not even Phil Knight. It's Michael Jordan. Well so now Air Jordans are actually Yeah, you're right. That was a brand within that brand. But exactly. This look this is the argument. But the first thing you think of with Nike is my is, you know, jump man, you know, Michael Jordan. But anyway, I I get what you're saying. No, you're not the the point where that we should let our clients know is the reason that you choose one of those four brands because you resonate with that brand. It's the brand. I didn't say you resonated with the product, you resonated with the brand. How many times have you heard someone say, I don't wanna be the feature of the brand, the inventor or the entrepreneur. Like you tell me how that would have worked out for Michael Jordan. Right. Or Phil Knight. Right. I I can actually probably tell you how it didn't work out for Magic Johnson according to the history books, right? He was approached by Phil Knight first. Yeah. And they said no to him. Do you know who do you know who you went with? He went with Converse. Yeah, good job, Pete. He went with Converse. Him and him and Bird. Yeah. And yeah, they should have gone with the flying man. Yeah. Well But look at I think that's a teachable moment. I I I'm gonna say that I'm a huge proponent of the brand behind the brand. Locally here, Jordan's furniture, who's the guy? Barry and Elliott. Barry and Elliott. you know, come on down. Ernie Ernie Buck. Ernie Buck Jr., right? And Ernie Buck senior. Ernie and Phil's right. If you want to talk, who's are you buying from Bob's discount furniture or are you buying from Bob's? Buying from Bob. You go to my Bob's furniture, right? Exactly. And you gotta start owning that. That is a huge differentiator. Well, it it is your asset. Well, if we're talking if that's your IP if we're talking about IP, you are the IP as well. Come on, people. Right. It's so important. Look at us two idiots sitting here in front of podcasts. We're the brand behind the brand. Yeah. If you're hiring us because we're passionate about what we do, so we are part of the IP. Go on. All right. All right. Thanks, Dan. I didn't get Tito's today. I'm on the No. Well, I'm very impressed that you didn't swear. I threw a couple in there. I've I've been I've been trying to really cover Kids are watching this, so you know. Yeah, exactly. For you kids, Santa Claus is real. so again, the key teaching moment today. ownership isn't a feeling. It's a paragraph. Yeah. It's means it's in writing. That is what it's about. It's a great point. so you know all right. That's the one thing you take away today. That's it right there.