Creative industries often involve collaborative projects with numerous moving parts, shifting roles, and evolving timelines. Due to this fluidity, it is common for projects to move forward based on informal agreements rather than formal contracts, particularly when resources are limited. In some ways, this flexible approach makes sense as contributors may come and go, and responsibilities can change over time. However, it is precisely these unpredictable dynamics that require foresight into what may spark disputes. Hence thoughtful, detailed contracts are essential. A well-drafted contract that is regularly revisited can help prevent personal and professional fallouts, confusion over ownership and costly legal battles. Contracts for co-ownership most often involve copyrights, since co-ownership of trademarks by individuals is generally disfavored, as discussed below.

Contracts should be customized to fit the unique circumstances of each project. To ensure that each party’s interests are represented, it is advisable for all parties to work with independent legal counsel during the negotiation of the agreement. Each fact situation is unique, and therefore there is no comprehensive list of all possible terms. With that caveat, here are a few key elements to consider in a contract to help minimize risk and misunderstandings:

Parties:

• Identify all individuals and entities involved
• Determine if parties are independent contractors, employees or corporate entities
• Confirm which party or parties will have signing authority

Deal Breakers:

• Describe the project
• Specify time limits and a completion date
• Outline how costs and profits will be shared

Obligations:

• Define whether licenses granted by a co-owner will be exclusive or non-exclusive
• Specify if joint approval is needed before a license is granted
• Include permitted uses of the work, mediums of reproduction and geographic scope of allowed licenses
• Include confidentiality terms
• Decide the approvals required for sequels, adaptations, spin-offs or derivative uses

Credit:

• Specify where credit will appear, to whom and in what format

Finances:

• Decide how income will be allocated
• Decide when costs should be shared
• Clarify whether unanimous or majority consent is required to make legal or financial decisions

Authorship and Ownership:

• Clarify if the work is a work of joint authorship or a single author with contributors
• State that contributors assign interest in their work to the authors
• Define ownership shares (ex., 50/50 or proportional to contribution)
• State who owns the copyright (employer in the case of work for hire or contractor in the case of freelance work) and include transfer provisions if appropriate

Control:

• Specify who has creative and administrative control
• State whether decisions require unanimous or majority approval

Renegotiation and Termination:

• Set a regular contract review schedule (monthly, yearly or by project milestone)
• Include renegotiation procedures and withdrawal terms
• Decide whether co-owners require mutual assent to assign their interests

Trademark Contracting Through a Legal Entity

As explained in the companion piece on trademark co-ownership, although it is possible for multiple individuals to jointly own a trademark, such arrangements are generally disfavored because inconsistent or disparate use may lead to consumer confusion. If trademark joint ownership is pursued, parties should proceed with caution and establish a clear, written agreement. Trademark co-ownership is most commonly structured through a partnership or limited liability company. Here are some additional contractual provisions to keep in mind for jointly owning trademarks:

• Align the meaning and purpose of the trademark
• Determine the types of goods and services to which the trademark will apply
• Consider what will happen to the trademark if the entity dissolves
• Decide how the goodwill will be managed
• Specify which owners need to sign key documents
• Define enforcement measures and how such enforcement costs will be shared
• Decide how the exclusive rights to the trademark will be assigned at dissolution or partnership termination

For further reading from our website on the topics discussed here, see the following insights and IP Bits & Pieces®: Music Video Copyright, Compilations v. Individual Copyright Registrations of Photographs, Copyright Office Clarifies Termination Rights Discrepancy and our Copyright FAQs and Trademark FAQs.