4A’s calls marketers demanding IP rights during RFP stage ‘unethical’ and ‘unfair’

The Association of Accredited Advertising Agents Malaysia (4As) has spoken out against an “alarming number” of marketing communications clients in Malaysia that have been conducting requests for proposals (RFPs), while demanding the ownership of intellectual property.

This include ideas, plans and work product described in the proposals regardless of which agency wins the pitch. The 4As said in a statement that this is “tantamount” to clients demanding ideas without compensation and considers the practice “unethical and unfair” and calls for the practice to “cease immediately”.

Its member agencies have reported an increase in the appearance of clauses that confer an automatic ownership transfer, found in the fine print of the RFP documents issued by marketers’ procurement departments.

“We are especially concerned that this practice seems to have taken hold even at companies that claim to adhere to the highest business standards of fairness, integrity and conduct. This demand for free ideas flies in the face of their claims, and contradicts core business principles and global norms of business dealings,” the statement said.

The 4As has reiterated its advise to agencies to not participate in RFPs which demand them to give away intellectual property rights to strategy and ideas they present in new business pitches. It added:

The 4As recommends that agencies retain ownership of all ideas, plans and work product unless the client is prepared to pay the agency fairly for the rights.

It also urged CEOs and leaders of Malaysian companies to “strip” these clauses from their procurement documents, to eliminate the unfair practice “once and for all”. The 4As added that it has developed a best practice guide relating to ownership of agency developed ideas, plans and work created for an RFP, and the guide has been issued to all member advertising agencies and is also available on the 4As website.

“If marketers wish to retain the ideas that are generated during the RFP process, there are various options available to fairly recompense the agencies for these, which the 4As would be delighted to share with them. To this end, we hope that advertising clients will respect the intellectual property of ideas and do the right thing by eliminating these demand clauses,” the 4As said.

Document: Ownership of Agency Ideas, Plans and Work Developed During the New Business Pitch