Copyright clause in pitch document for Malaysian ECERDC account viewed as “unethical” by 4As industry association

Following a recent Invitation-to-Bid (ITB) from the East Coast Economic Region Development Council (ECERDC), the Association of Accredited Advertising Agents Malaysia (4As) has criticized the demand by ECERDC for the automatic ownership and retention of Agencies’ intellectual property.

The ECERDC, established as a Federal Statutory Body in 2008 to ensure balanced regional development in Malaysia’s East Coast Economic Region, recently issued an ITB for the appointment of a Creative Agency of Record. The ITB is a set of terms and conditions requiring all participating agencies to comply with regardless of whether the agency is subsequently successful or otherwise.

Contained within the documentation is a “Copyright” clause as follows:

13.1 – Copyright in all reports/documents, plans, designs drawings and works prepared by the bidder pursuant to this ITB document shall be the property of ECERDC and ECERDC may use them in any manner ECERDC wishes.

Khairudin Rahim, CEO of the Association of Accredited Advertising Agents Malaysia, said his body views this clause as an “unethical demand” by ECERDC for the automatic ownership and retention of intellectual property described in an Agency’s proposals regardless of whether the Agency is selected or not.

All ideas, concepts, strategies, trademarks, and materials that an Advertising Agency presents or provides to an Advertiser in an ITB or tender are provided for the sole purpose of allowing the Advertiser to determine whether to engage the Agency’s ongoing services.

Rahim explained that on 3 March, 9 March, and again on 22 March, the 4As requested via correspondence that ECERDC remove Clause 13.1 from their tender documents directed at Advertising Agencies.

In a written response to the 4As, ECERDC’s Tender Secretary states that the intent of Clause 13.1 is for the work submitted by unsuccessful Bidders to merely be kept by ECERDC for report and audit purposes. However, despite the clarification, there has been no confirmation that the offending clause will be removed as requested repeatedly.

“Clause 13.1 is oppressive and highly prejudicial to Agencies who are unsuccessful as they would not in any future bid or project rely on their intellectual property rights. This clause is not even remotely connected to the Tender Secretary’s stated intention of wanting to retain the unsuccessful Bidders’ work for report and audit purposes only,” said Rahim.

As such the 4As has again requested that ECERDC removes the Clause to eliminate any misinterpretation, or wrong perceptions of ECERDC’s goodwill and reputation.

“There is no room for imprecise documentation, and catch-all terminology, in any modern and fiscally responsible tender. The inclusion of Clause 13.1 by the ECERDC is especially disappointing given the 4As repeated calls for Advertisers including Government Linked Bodies to remove unfair and unethical intellectual property retention clauses from procurement documents. It is tantamount to a demand for free ideas, contradicting core business principles and global norms of business dealings.”

The 4As advice to Agencies is to not participate in tenders and pitches which contain similar clauses. The 4As recommends that Agencies retain ownership of all ideas, plans, and work product unless the Advertiser is prepared to pay the Agency fairly for the rights.

“The 4As is always ready to provide assistance, and we have developed a best practice guide relating to ownership of Agency developed intellectual property which is readily available on the 4As website,” said Rahim.