Preeti Hoon
Apr 29, 2024

When creativity clashes: The ongoing battle for IP rights during ad pitches

SOUNDING BOARD: Independent advertising agency Bang in the Middle recently accused Medanta of idea theft, sparking a renewed debate over the rights and wrongs in client-agency relationships. Campaign speaks to industry experts on whether the agency's decision to pursue legal action is justified.

When creativity clashes: The ongoing battle for IP rights during ad pitches

The question of who owns intellectual property (IP) during a pitch and whether agencies should be paid for their pitching efforts remains a hotly contested issue within the advertising industry. With strong arguments on both sides, this debate continues to shape the dynamics between clients and advertising agencies.

On one hand, proponents of IP ownership by agencies argue that it protects creative investments and incentivises high-quality presentations. Conversely, those against it contend that ideas presented in pitches are part of exploration and should remain with the client for practical implementation. Similarly, the notion of being paid to pitch is also divided: Supporters believe it compensates for the resources invested, while detractors argue it could limit the number of opportunities for smaller agencies.

Recently, the independent advertising agency Bang In The Middle (BITM) called out its former client Medanta for alleged idea theft, bringing these issues into the spotlight once again. BITM claimed that a campaign they had previously presented which was outright rejected, was later used by the client without permission or compensation. The agency's outrage was publicly expressed in a detailed LinkedIn post, stating, "The same layouts. The same lines. The same art. The same everything. The people who once spat on it and threw it out, have now had a change of heart, done a complete volte-face, and the campaign is now live on their pages."

The dispute has escalated as BITM decided not just to voice their discontent on social media but to take legal action by sending a notice to Medanta. The agency shared, "We never wanted to take this legal or public. But when we reached out to them to amicably settle this, they rudely told us to take a walk, and challenged us to do whatever we can, because they are a giant and we are but a pipsqueak. So, what do you do when you have a problem like Medanta? Make it public and go legal. We have done both."

This incident is not isolated. Two years ago, MullenLowe accused its former client Motilal Oswal of using its idea with another agency. In 2019, the Chinese mobile brand Vivo was implicated by the Bombay High Court for broadcasting a TV commercial through Dentsu Impact, which was strikingly similar to a proposal previously pitched by Ogilvy.

To gain a deeper understanding of this ongoing issue, Campaign India consulted various experts across the marketing and advertising industry, seeking their perspectives on the complex dynamics of client-agency relationships, particularly concerning IP rights and compensation for pitches.

Lakshmipathy Bhat
Senior vice president, global marketing and communications 
Robosoft Technologies 

Lakshmipathy Bhat's Profile | LinkedIn, Outlook Business Journalist | Muck  Rack

My first reaction was one of déjà vu. There have been many instances where clients used ideas presented at a pitch or after an agency was sacked. In this case, it appears that a commissioned campaign, which was rejected, was used as is after parting ways with the agency. Often, agencies do not push back for various reasons, so it was refreshing to see a visible 'protest' from Bang In The Middle. I am not familiar with the legal nuances of client-agency tiffs. Historically in advertising, anything produced by the agency and paid for by the client was considered the client’s property. This could include a campaign idea, a tagline, or a logo design. If the agreement explicitly bars the client from using such materials, there may be a case, but I doubt any client would sign such an agreement. Perhaps the options for ad agencies are limited. It might be established that Agency A presented an idea and the client released it through Agency B without compensating the former. But are agencies willing to go through the legal, long-drawn process? There is very limited scope in challenging the client.

During my ad agency days, we had a case where the brand name we presented during a pitch (and lost) was used by the client at the launch. They simply said many other agencies presented the same idea during the pitch, and ours was not unique. We did not pursue legal action and just let it be. Not sure if a legal fight over creatives can be won in a country like ours. Also, people talk of ‘creative coincidence’ when referring to exactly the same ideas from two different brands. It is an industry which agrees to pitch ideas for free. I’d be happy if more agencies spoke up against such practices.

Samir Datar
Chief strategy officer
The Crayons Network

Not again! This is not the first incident in the past few years. A while back, Vivo got into trouble and the case went to court where damages were to be paid. We also went through this, and it was very upsetting. Let’s be honest, agencies, especially independent ones, are a small fry compared to clients; their muscle is too big for the agencies.

In the Vivo case, the court directed the client to submit a bank guarantee of INR 1 crore. However, it was settled later ‘amicably’. Legally, all of this falls under Intellectual Property Rights. But there’s always a grey area. What does an agency do to protect its rights? We for instance, include a copyright notice on the title slide of all our pitch presentations. It may not amount to much because once the client still went ahead and used it anyway. Unless you are part of a global network, as was the case with Ogilvy, you don’t stand a chance to counter a client with resources. There is a precedent, so yes, a legal fight can be won if one has the resources and the patience to wait for justice.

When it crosses a certain limit, someone has to raise a voice. Clients avoid messing with large agencies, but smaller agencies (and here I mean non-networked agencies) are easy targets. Industry bodies should have addressed such concerns long ago. There should be rules on IPR, and clients should be taken to task.

Samir Gangahar
President (North)
Leo Burnett India

Any campaign released by a client that has been created by another agency is a cause for concern. It’s tough to react to only one point of view. But if there is any ambiguity, then both agency and client need to sit across the table and resolve it. If the agency is right, then they deserve to be compensated. If the client is right then they need to make it clear. What makes most sense to me is a joint statement.

Sanjeev Kotnala
Brand and marketing consultant
Intradia World

What’s new? Such cases happen all the time. Clients get away with it as there are always discussions of future association and settlements that the outside world is never privy to.

Industry associations have not found a solution in decades of discussions that fizzled out as the heat of an incident does. But, bravo to BITM, Pratap (Suthan), and Naresh (Gupta)—someone had to call it out. Though I have not seen the work in reference, I completely trust the two gentlemen.

So, will this fizzle out, too? Maybe. At least, a legal process has started. The client must be made to pay. According to me, the complete responsibility lies with the client. There’s no reason to overlook it just because such cases happen frequently. What's wrong is wrong. No excuse can be allowed including changes of guards and arguments such as “Oh we did not know or the current agency presented exactly the same insight and creative that we had rejected earlier” should not be accepted.

I don’t know about the law in detail, but the agency must be compensated as the client cannot use something they have not paid for. The onus lies on the agency to prove that the idea was a part of their presentation and the client has not paid for it. Agencies should come out publicly with their opinion and, if needed, sanction the client publicly and let the media not run it until the charges are cleared. It is what I expect but believe will never happen. Why not sanction the marketing representative of the tainted client and bar him from industry forums? Unfortunately, we remain divided. Once, I objected to Baba Ramdev addressing Goafest because his brand had violated the Advertising Standards Council of India rules at the time. However, he was laughing at the industry. People want to maintain relationships, so they often avoid antagonising those who control the budget.

Pitches should be paid efforts. And every pitch agreement must include a clause on future use and payment for presented creative. Post-presentation, have the client sign the creative copies and keep them.

Source:
Campaign India

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