Agencies weigh in on ownership of rejected ideas

In the cut-throat world of advertising, where creativity is currency, the question of ownership looms large. Recent events, such as the clash between Bang In The Middle and Medanta, highlight the ongoing debate in the industry over who rightfully owns the rejected campaign idea.

In a recent LinkedIn post, Bang In The Middle shared their experience with Medanta, shedding light on the challenges that agencies endure when their ideas are used without permission. According to the agency, they proposed several campaigns to Medanta, only to see them rejected and then implemented without credit. This story, however, is not unique; similar incidents have plagued the industry for years. 

It brings us back to the murky waters of ownership. But this time, the question is: does the client have a right over the ideas they rejected and the agency they didn’t onboard? The lack of clear guidelines in contractual agreements makes it even harder to figure out.

Defining ownership of an idea

Naresh Gupta, co-founder of Bang In The Middle, emphasises the importance of contractual agreements in defining ownership. 

He said, "The contracts define who owns the creative work. All the contracts that are signed today have a specific scope of work, and the agencies are paid for the delivery they make.”

He shared that every rejected idea means that the brief is not fulfilled and the task is incomplete. Therefore, once the client approves the work, then and only then can the client claim ownership. “This is often clearly stated in the contracts that are drawn up and signed,” Gupta added.

Nisha Singhania, co-founder of Infectious Advertising, shares a similar opinion, emphasising the necessity of upfront agreements to avoid disputes.

She said, “There is always a contractual agreement between the client and agency. This point is often included and should be clarified in the beginning itself. However, in case it is not specified, then the agency should have rights to the rejected ideas.” 

Jay Morzaria, Former Creative Head, Rephrase.ai compares the ownership of creative ideas to a transactional process.

Morzaria said, "The ownership of the creative idea remains with the agency until the client purchases that particular idea."

Drawing parallels to everyday transactions, Morzaria simplified the concept further. He said, "If you go to a shopkeeper to purchase a toy, the ownership of the toy belongs to the shopkeeper till you explicitly pay money to purchase it. Only then the ownership is transferred to you."

Morzaria's analogy extends to subscription models. He explains that if the client has taken a retainer and the agency presents an idea, it's similar to a Netflix subscription. He said, “Just like if you wanted to watch a movie on Netflix and the subscription ended, you can't watch the movie unless you renew the subscription. Similarly, if the subscription period has ended, you cannot use that idea.”

Compensation on reusing the rejected idea

As concepts are pitched, declined, and potentially revisited, questions of ownership, credit, and fair compensation arise.

Chaaya Baradhwaaj, Founder of BC Web Wise said that the clients cannot use rejected ideas without the agency's consent. She emphasised the role of copyright law in protecting the agency's intellectual property rights.

Baradhwaaj said, “Copyright protects the expression of the idea, not just the idea itself. If the client wants to use a rejected idea, they should negotiate with the agency for a licensing fee.”

This licensing fee acts as compensation for the rejected idea.

Similarly, Shantesh Row, Chief Creative Officer, Slant Advertising also believes in the agency getting compensated. 

He said, “It's best to keep an open channel of communication to sort issues. But in no way should an agency not be compensated by a client in case the latter uses a rejected idea after severing a relationship with an agency.”

While compensation could mend relationships and help both parties find a middle ground later, Gupta, on the other hand, is strongly against clients using rejected ideas.

The client has zero rights on work it did not buy. To reuse, modify, redo, the client first needs to own the work. What is not owned, how can that be reused?

- Naresh Gupta

Better communication

Singhania believes that the client should not be able to use the rejected idea at their discretion and if the client wants to use the rejected idea it can be done keeping the agency in the loop.

Similarly, Prashant Gopalakrishnan, Founding Partner of Talented, advocates for collaborative decision-making. He said, "The client retains authority to reintroduce a rejected idea for consideration, but this process should ideally be done collaboratively with the agency."

Gopalakrishnan suggested a few measures to secure the intellectual property (IP) of an agency.

He suggests integrating a clause for ‘reintroducing rejected ideas’ into the contract and consistent inclusion of disclaimers regarding agency IP reinforced across idea presentations. He believes in initiating open discussions about IP during negotiation phases. He also suggested getting closure for each rejected idea to enable its potential utilisation elsewhere, thereby safeguarding the agency's creative assets. 

Taking a legal recourse

In the past, when campaign ideas were used without authorization, agencies have resorted to legal recourse to protect their intellectual property rights.

In 2019, Ogilvy India took smartphone maker Vivo and creative agency Dentsu Impact to court over allegations of plagiarism. Ogilvy claimed that Vivo had used their creative ideas without consent, leading to a long legal fight that ended with an out-of-court settlement.

Row highlighted that most agencies tend to voice their frustrations when such things happen in the open or on social media. 

“If there is a signed contract, then a legal recourse is a viable option,” said Shantesh Row. 

Agencies can take action, have taken action and will take action. The clients feel that they are the clients and they can get away with it, they can't.

-Naresh Gupta

Gupta pointed out that the reputational damage and negative publicity resulting from such actions can significantly harm a business. 

He added, “Forget penal action, just the loss of reputation and bad news is bad for business. The loss of personal reputation for the client team too is bad for themselves personally.”

The battle over ownership of rejected ideas highlights the complex dynamics within client-agency relationships. By establishing clear contractual agreements, fostering open communication, and advocating for industry-wide standards, agencies can strive towards fair treatment and protection of intellectual property rights.

Although Social Samosa attempted to contact clients to get their opinions on this debate, they chose not to participate. We encourage clients to contribute their insights to the longstanding idea debate and propose a path forward. Please feel free to reach out to us at content@socialsamosa.com.