A client gone bust - intellectual property letter to write

Steel_2

Hi everyone

I'm having a problem constructing a letter (ridiculous considering I'm a writer) to the clients of a ex-client of mine that went bust owing me almost 10K.

I wrote a number of pieces of work for my ex-client and retain the copyright as I have never been paid for them. The work was destined for 5 different companies - three of which did get the work and two who did not. I refused to release the latter two pieces of work to my ex-client until i had been paid for the previous three, as I believed (and have been proved right) that they intended to fulfill existing client contracts then voluntarily take the company into liquidation to avoid their creditors and set up again using a another company they own. And no, I haven't got any of this in writing! They refused to put anything down and only talked on the phone.

I have a team of solicitors who have been very good with regards advice, but want to write a letter to each of the five companies, telling them the intellectual property is mine and the work they have seen is not to be used by them in any way shape or form, but leaving the door open to them make offers for the work. At £255 + VAT per hour, I just can't afford that at the moment.

From what I understand, the ex-client is now up and running from this other company, has contacted all the clients to sign them up again and has told me they are rewriting all the work from scratch (they told me this was to ensure I never get anything bar pennies from the liquidator, and as they owe tens of thousands to the HMRC and two banks, the latter of which have debentures on their finances, I probably won't even get pennies.). The company owner is quite a good writer, but it does mean he has to write 5x50 page documents which I suspect he won't and will tell the clients he owns the work he has never paid me for.

What do I write to these clients that won't come across like I'm the big bad wolf (the ex-client is blaming all the creditors for being unreasonable and forcing them under) and that I'm 'blackmailing' them, while retaining some goodwill for the future. They've already paid my ex-client anywhere between £9k-£12k for the work so they will probably stick with the option of the rewrite (that's IF they decide to sign up again with the 'new' company) but I feel I have to try.

Steel_2

Ok...this is the start of it. I got on very well with the clients so have opted for a friendly tone.

Dear X

I’m sorry to have to write this letter to you. I dislike being the bearer of bad news and more so because I know that you will be very angry after you read it, but I have been advised by my solicitors that I have to protect my interests in the light of recent developments with XXX Ltd.

As of 30th December 2008, XXX had never paid me for the XXX story that I wrote for you. Because of this, I still retain the full intellectual copyright and moral rights to the story that you and I sat down at the beginning of November to edit together. There is no implied ownership of the work by XXX simply because they commissioned me to write it and you have paid them up front for marketing services – the ownership of creative written work is always the property of the writer until such time as the client pays or fulfils their part in an alternative arrangement, and ownership is then assigned to the client. The exception to this is where a consultancy agreement exists which deals with the ownership of any work produced by an outside contractor. I have never entered into such agreement with XXX and have always retained the copyright over my written work until payment is made.

I have refused XXX the rights to sell this work to you (along with a number of other pieces of work for other clients I have not been paid for dating back to 1st August 2008) until I have been paid. I understand from Director 1 and Director 2 that they intend to rewrite your XXX story to fulfill your contract, and hope that they are able to do this speedily, while at the same time making it significantly different to the wording of the original.

I am sincerely sorry that you have been caught up in our dispute and hope it won’t be too long before your marketing is back on track and producing good results.

Savvy_Sue

Steel wrote: »

I have a team of solicitors who have been very good with regards advice, but want to write a letter to each of the five companies, telling them the intellectual property is mine and the work they have seen is not to be used by them in any way shape or form, but leaving the door open to them make offers for the work. At £255 + VAT per hour, I just can't afford that at the moment.

I don't think you've covered this part at all in your letter so far. Would it be enough to add something to your final paragraph along the lines of "If I can help with this in any way, please contact me to discuss terms."

Also will you be aware if any of these companies DO use your work? If so it might be worth making that clear. Again, something like "I do follow your company's activities with interest, and will take action if my work is used before I have been paid for it."

These are just suggestions, hopefully others will follow.

Errata

I wonder if it's wise to give a written opinion about the ins and outs of company XXXX Ltd business and your relationship with them? I've had a bash at editing your letter to give you some food for thought. HTH

Steel wrote: »

Ok...this is the start of it. I got on very well with the clients so have opted for a friendly tone.

Dear X

I have been advised by my solicitors that I have to protect my interests. Because of this, I am writing to let you know that I still retain the full intellectual copyright and moral rights to the story that you and I sat down at the beginning of November to edit together.
There is no implied ownership of the work by XXX simply because they commissioned me to write it – the ownership of creative written work is always the property of the writer until such time as the client pays or fulfils their part in an alternative arrangement, and ownership is then assigned to the client. The exception to this is where a consultancy agreement exists which deals with the ownership of any work produced by an outside contractor.
I have never entered into such agreement with XXX and have always retained the copyright over my written work until payment is made.
I am sincerely sorry if you have been inconvenienced. Please don't hesitate to get in touch with me if there is further work we can do together in order for the story to be legally published by you, and I hope it won’t be too long before your marketing is back on track and producing good results.

Savvy_Sue

A good point ...

Steel_2

Thanks for your suggestions Savvy Sue and errata.

You're right about taking the written opinion out. I think I also need to make it clear that I haven't been paid for the story though. Nothing major, just something like "to date I have yet to be paid"

Unfortunately, it appears that the work I did for one company has already been used to promote a conference (and a very successful one at that), so I'm not sure how I tell them I still own the IP and therefore the licence which they are in breach of.

I've still yet to put a claim in with the liquidators and I have until the 16th to do so. I guess I better get a crack on and send something to these companies so if I do get anything out of it I can reduce the claim accordingly.

vivatifosi

Hi Steel,

Can I also please suggest that you get some boilerplate T&Cs drawn up so that if you do end up dealing with any of the new businesses you are covered. Business Link (or similar organisations) should be able to help you with this, as may your solicitors.

Errata

Unfortunately, it appears that the work I did for one company has already been used to promote a conference (and a very successful one at that), so I'm not sure how I tell them I still own the IP and therefore the licence which they are in breach of

Just write to them explaining the situation and what they need to do.
Do you have an agent? They are usually terriers at this sort of thing as they need to protect their own income stream.