Consider the following scenario. You are a small, up and coming web design company contracted to create a brand new site for a consumer-facing business. They want the works, attention grabbing graphic design, cutting edge multimedia content, intuitive and interactive navigation, and quality text content. Your small team spends weeks painstakingly programming the source code and curating the content to the client’s specifications. Finally, the site is ready to go live. You are rightly very proud of what you have created.
At this point, the client suddenly goes quiet. Won’t answer the phone, won’t return emails. The payment period on your invoice lapses. You offer to negotiate, still nothing. What do you do?
This is an extreme example perhaps, but it highlights an issue faced by many operating in the often faceless, distant world of digital content. Whether you write blogs, sell photographs or create videos for websites, you may be dealing with clients on the other side of the world who you have never met. What are your options if you don’t get paid?
When selling a service, businesses can simply withhold the service when a client refuses to pay. When selling a physical product, you are protected by property ownership laws. But for digital content, which falls under the complex web of intellectual property laws and copyright, things can be a bit trickier.
When it comes to digital content, ownership rights are far from clear cut, especially as transactions across different national jurisdictions are commonplace. It is not even entirely clear whether the exchange of money in a purchase transaction constitutes a transfer of ownership of digital content.
In our example of an unpaid web developer, copyright protection all comes down to the contract in place or the agreed terms & conditions. A good development agreement should set out the rights arrangements for content on a web site - whether content is owned or licensed, whether ownership belongs to the creator or the client and ultimately at what point ownership passes to the client.
There is no single, straightforward arrangement - in general terms, it is a matter of prior negotiation. To protect yourself, it is therefore strongly advisable for creative businesses to set out clear contract terms which include non-payment clauses, specifying at what point ownership of copyright is transferred and a clear clause that states if the client does not pay, they do not obtain the rights.
In the case of non-payment, the creator could then pursue the matter using a debt collection company or the civil courts and if necessary, use the agreement as evidence to take action under the DMCA.
The Digital Millennium Copyright Act (DMCA) was a law passed in the US in 1998 creating a legal framework for companies to enforce the takedown of digital content which breached their intellectual property rights. Although a US law, DMCA has been very influential and has influenced similar laws globally, including in the UK.
DMCA and its international equivalents place an obligation on hosting services to remove content found in breach of copyright. In the UK, there is no formal takedown order issued, but hosting services are expected to remove content if they have ‘actual knowledge’ of an infringement.
In addition to contacting the web host, under DMCA rules you may be able to ask Google to remove the infringing content from their search results. Click here to review Google’s guidance on removing infringing content from search results.
When it comes to getting paid for your work, prevention is always better than cure. If you can avoid placing your company in a position whereby the client has the finished product before you have been paid in full then you will rarely find you have issues. A strong, legally binding contract or appropriate terms and conditions will help you stay on target, provided you actually get them signed at the outset of course. If you don’t have a contract then you must take steps to ensure your client is legitimate before you start, conduct suitable due diligence and seek to reassure yourself this client can be trusted.
And if all else fails, Safe Collections can help. We have over thirty years’ experience in helping small businesses and freelancers recover what they are owed quickly and cost effectively. Contact us today to find out how we can help.
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Our modest but highly skilled team has a combined total of over 150 years of experience in commercial credit management and B2B debt collection. From independent IT contractors to major film and TV publishers, Safe Collections has the knowledge and experience you need to get paid quickly and cost effectively.