Vivo’s recent ad campaigns feature Aamir Khan and a child in an amusement park and shows off the impressive Vivo pop-up camera set up and “super night” mode – an enticing ad, definitely. However, the ad seems to have gotten the phone maker in hot water with the Ogilvy group. The Ogilvy group has filed a suit before the Hon’ble Bombay High Court for copyright infringement claiming that Vivo has copied ideas pitched by Ogilvy to Vivo.
As we await the verdict of the Court, let us see how Ogilvy might have protected itself. The type of agreement it executed with Vivo for sharing information and data, especially when the information was being shared in a pitch meeting, is key to such protection.
While it is common practice to enter into confidentiality and non-disclosure agreements at the pitch-level stage, focus has to be put on the type of information being classified as “confidential” and the manner in which the parties will be penalized if there is any breach of confidentiality. A well-considered confidentiality agreement shall provide for the following:
- Define consideration: Consideration is the price you pay in return of goods purchased, or services availed from another person. In the absence of consideration, a contract in invalid. In a pitch meeting, the consideration for either party is the mere prospect of being professionally engaged by the other. No other amounts are usually paid. It is recommended that this consideration be specifically recorded in the contract. Although, this is something which appears evident, it is a good practice to spell this out.
- Work for hire: The ideas pitched in a client meeting are not shared pursuant to any service arrangement between the parties. It is recommended that the confidentiality agreement should state that the ideas pitched are not “work for hire” even if the materials for the pitch have been customized to suit the client. For non-lawyers: if a work product is considered “work for hire,” then the party for whom such work is made is the owner of all copyright in such work, unless clearly stated otherwise.
- Define Confidential Information: A typical definition of confidential information would include every bit of information shared in the course of the meeting. As such even small and inconsequential details shared will be subject to confidentiality. This may open the clause to challenge in the courts and can be avoided. A well-thought clause should be broad enough to include all sources of confidential information but stop at that. It should include any material being shared in which any intellectual property rights such as copyright subsists, including any marketing materials and information, business plans, templates of marketing plans and other details not already public. You may, additionally, indicate specific materials that should be designated as confidential.
- Define the duration of confidentiality: the confidentiality obligation should survive even if the initial pitch meeting does not fructify into an engagement and continue to subsist as long as the confidential information remains confidential.
- Limitation on Usage Rights: The agreement should provide that nothing in the agreement grants a license or right to the recipient to use the confidential information (including creating derivative works of the same) shared with it as part of the pitch.
- Consequence of breach: An agreement which provides the right disincentives for breach, is more likely to be adhered to. The agreement should provide that any breach of the confidentiality and limited use obligation shall trigger indemnification rights of the party disclosing the information. The indemnification should include any indirect losses suffered and costs incurred (including attorney fees) by the disclosing party owing to such breach. The losses claimed in an Ogilvy-like situation may arguably be indirect in nature and a contractual provision of the sort discussed would help in such a scenario.
The agreement so formed should adequately shield all parties to the agreement and ensure that any breach of the agreement is dealt with in a contained fashion. While the highlighted provisions may seem voluminous, they are in fact what help prevent the disputes that Ogilvy and Vivo has found itself party to.
Authored by Darpan Singhi, Associate Ikigai Law with inputs from Anirudh Rastogi and Tanya Sadana.
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