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Need a contract written up for use of my design

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kgs:
I am a home goods designer and was approached by a start-up company to create a design and samples for a new product idea in exchange for a percentage of gross receipts if my design is used (I generally create custom designs on a per order basis so I have never sold my designs to a third party).  I was presented with a NDA and a basic contract and I feel like I need a lawyer to amend the contract and protect my side of the product development but I'm not sure I have the money to pay for these services.  What range can I expect to pay for such an agreement to be drafted?  Also, the company will hold the copyright on the idea so how do I protect myself from them taking my design and changing one small detail thus cutting me out of my share of the receipts?  Any help would be greatly appreciated. 

DogDayPM 9er9er9er:

--- Quote from: kgs on 01-25-11 at 12:18 pm ---I am a home goods designer and was approached by a start-up company to create a design and samples for a new product idea in exchange for a percentage of gross receipts if my design is used (I generally create custom designs on a per order basis so I have never sold my designs to a third party).  I was presented with a NDA and a basic contract and I feel like I need a lawyer to amend the contract and protect my side of the product development but I'm not sure I have the money to pay for these services.  What range can I expect to pay for such an agreement to be drafted?  Also, the company will hold the copyright on the idea so how do I protect myself from them taking my design and changing one small detail thus cutting me out of my share of the receipts?  Any help would be greatly appreciated. 

--- End quote ---

BUMP in case others want to weigh in (your post kind of got buried behind a number of newer spam entries).

This is just a very loose guess, but in a first review and modification I doubt an attorney experienced with copyright and contracts relating to such would need more than about 3-8 hours to discuss your needs and review/revise the existing agreements.  Sorry I'm giving such a loose range but I'm kind of in a vacuum offering this guess.  I usually don't need more than 1-2 hours to hack up even a fairly complex license agreement, but then I usually already know the complete business situation from the beginning so there's no introductory time.  And if there's a number of rounds of back/forth, the attorney's time will go up.  As for cost/hr, this also varies widely depending on local cost of living and level of attorney experience.  Hopefully you could find someone with a good level of experience for under $200/hr, but maybe not.  Too many variables.

One approach may be to ask the attorney to very briefly review the offered agreements in light of your circumstances and to suggest right away if he has a template that might be better suited.  It's usually easier to work from a form one is familiar with vs. trying to modify a "foreign" document, so this can cut down time.  I wouldn't suggest this if MegaCorp was involved because they'd likely insist you work from their forms, but a start up company may be less rigid about the "my way or the highway" routine.  Also, doesn't the contract already have a clause in it that is similar (if not identical) to the NDA?  If the NDA is just repetitive, you could suggest to the company that it's not needed so you don't have to pay for attorney time on it.

As far as making sure you're protected against slightly changed knock-offs being alleged to be outside of the agreement, that's why I started the discussion with "an attorney experienced with copyright and contracts relating to such".  I am not one of those attorneys.  But it's possible that the "Product" for which you are paid could be defined in the contract as anything that would be considered under copyright law an infringing derivative work based on the original product you present to them.  Don't know how workable this sort of definition is in real life - that's a question for the copyright attorney.  And I may be off base here in any event if your designs are not amenable to copyright - for example if they're very utilitarian in nature.  And consider whether patent protection would be useful; although if you're strapped for cash, that may not be realistic.

A final comment is about reasonableness.  I see agreements sometimes revised by attorneys who appear to not really know what their client needs, so in an excess of caution they go completely around the bend in terms of over-protectionism.  Which only leads to more timewasting back/forth on the form revisions - before we eventually end up close to where we started.  Try to ensure that your attorney understands what you need, what changes you really feel are "musts", what changes might be just "nice to have", etc.  An extra 20 minutes of conversation might save a few hours of red-lining the agreement forms.

Anyone feel free to contradict, etc. because I'm just kind of winging it here!  Mainly I wanted to bump the orphaned post, then ended up getting chatty.

kgs:
Thanks for saving my orphaned post!!
Your chattiness has been most helpful. 
I am friendly with the people involved in the start-up and legitimately believe that we want to work with each other and create a successful product so that we can all profit, that being said I also believe that a clear contract will pave the way for a better working relationship.  I don't think that we need a Megacorp type of agreement nor do I want to begin a "lawyer war".  Your cost range is helpful because I honestly had no idea what to expect.
The contract that I was given is essentially only a NDA (the terms of which are fine with me) with one added clause regarding compensation for my services, which is why I feel my end isn't covered.
Thank you also for the information regarding the copyright.  I am a researcher by nature so I will try to educate myself as much as possible on my rights. 

Joe M.:
In your original post, you stated that the company would own the copyright in the work. Is this set forth in the contract between the startup and yourself? If this is the case, this would essentially make this a work made for hire situation in which, at least to some degree, copyright law wouldn't really be applicable if they varied your design slightly, i.e., they own the copyright and can therefore make derivatives of it. If it is not in the agreement, then you would hold the copyright in the product and copyright law would very much control any variations they might make, i.e., only you can make or authorize derivatives.

I'm assuming this is actually a work for hire situation here and startup is sharing a percentage of future revenue (if any) in lieu of paying you cash for your design services, this is common since most startups do not have much cash in the beginning. If this is the case, you would certainly want to make sure there is some language in the contract protecting your share in the event they make slight changes to your original design, i.e., your gut instinct is correct. That language might be something as simple as the "any derivatives thereof," as DogDayPM mentioned, or it might be something more complex than that. In the end, you should definitely consult an attorney that is familiar with copyright licensing matters before you sign the agreement (assuming I'm not too late to the party here).

If this is not a work for hire situation, I'm assuming there are provisions in the contract where they license the use of your copyrighted work. If not, there should be. In that situation, they would be infringing your copyrighted work if they tried to make derivatives of it to "skate around" your agreement with them.

Be sure to register your copyright.

If there is one phrase that bites people in the rear in these situations it's "I am friendly with the people involved." Please believe me when I say that a contract is not really there for when you guys are all buds, it's there for when the relationship ends badly (and they regularly end badly). I promise you that it is the contract that the court will be unpacking when you guys aren't friends anymore. It is important that you guys get the contract done properly in the beginning.

As far as cost goes, you might find an attorney willing to exchange a little of their time reviewing your contract for a little of your time designing something for their practice, e.g., new letterhead, firm emblem, webpage design. Assuming this is the type of work you can do (I'm not completely sure what a home goods designer is).

Best of luck to you!

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