Legal Journal

Advertising Agreements and Copyright Law

Copyright Law primarily protects the “Author” of the work and regulates some important principles, some provisions which cannot be agreed otherwise and the rights that cannot be waived before they are born. Since signing an agreement without conforming to these principles or provisions makes the agreement or its relevant term(s) invalid, it is really important in the sense of Copyright Law to classify various kinds of agreements executed in the advertising industry.

An advertising agency may incorporate into individuals such as graphics designer, script writer and photographer “who engage in creative activities”. Such individuals are defined as ”Author” by the Law on Intellectual and Artistic Works (“Law”). Thus, aforementioned individuals shall be both authors by means of the Law and employees of the advertising agency. However, Article 18 of the Law regulates that the rights of Works which are created under an employment contract shall be exercised by the employer. In other words, advertising agency alone shall be entitled to exercise the rights arising from the Works that are created personally or mutually by graphics designer or photographer or script writer who are employed by the agency. Therefore, the agency may directly signs agreements with its clients or gives commitments with regards to the advertising work created by its employees. The same principles apply even if the author is employed as manager or board member of the agency. It should be noted that “exercising of rights by advertising agency” and payments of royalty fees for such works/copyright are two different topics. Article 18 of the Law does not include any specific regulation concerning royalty payments. Therefore content of the employment contracts between the employee/author and the employer/agency shall differ. Parties may set provisions under the employment contract for payment of additional royalty fee to author/employee with regards to Works that will be created. Even if not expressly regulated, author/employee may still claim additional royalty fees in some certain cases. Consequently, drafting the employment contracts of these employees has a special importance.

On the other hand, agencies may not always find the opportunity to employ the aforementioned creative individuals because of the wideness of the industry and intense competition environment. However employment relationship is not necessary since advertising agencies may easily organize a creative team suitable for requirements of commercial. A copyright agreement however shall be vital while organizing the team without employment relationship. If the agency does not draft/execute copyright agreements in conformity with the Law by means of due form and context, a dispute between the agency and creative team or clients shall be inevitable. We would like to give broader information in this regard.

The necessity of executing a detailed agreement with creative team arises from the need to determine i) transferred/assigned rights of the copyright owner, assignee and the type of licensed advertising media, ii) licenses granted on the copyrights, iii) the agency’s or client’s right of adaptation on advertising products; and iv) royalty fees with regards to licensed/transferred rights, and payments for repeating-use.  If these agreements are drafted properly, agencies shall not be stuck in a difficult position against its clients…

Relationship shall be more complicated in case of the agency having a “producer” shoot the commercial, since there will be “one more player” in the equation. This relationship chain is extensible if there are actors and dubbing artists who are deemed as Performers by means of the Law.

We would also like to point out that advertising agreements between the agency and its clients also has a complex structure. From the viewpoint of clients, they should execute advertising agreements which have non-conflicting terms, have no legal gaps and cover the aforesaid complex structure and the relationship chain. If we consider the size of advertising budgets and importance of management of rights, this necessity becomes more distinct.

As a conclusion, it is important for agencies to draft the agreements of advertising world in accordance with the Law and to use same wording by drafting any type of the agreements which shall be executed with players who creates the advertising work and also clients, so as to protect the agency’s self-interests and to avoid any dispute shall arise between the players of advertising world.

Av. Nihan Malkoçer