Khazanah-backed sustainable energy solutions company Cenergi SEA has come under fire for allegedly stealing an idea from design firm Dxclusive. The company has since said it is investigating the issue and that further updates will be provided as soon as possible. Meanwhile, shortly after A+M broke the news yesterday, Founder and CEO of Dxclusive Diana Chew, said on Facebook that the two parties had reached an amicable solution and deleted her initial post.
In a conversation with A+MChew added that many Malaysians are unaware of design copyright, which is why this issue keeps coming up.
“We realized this only happens with large companies because of the procurement process, where the goal is to get the best idea at the cheapest price. Many may not know that what they are doing is not really ethical because there is not enough awareness about it,” she said, adding:
Many designers and agencies encounter this situation, the community often feels desperate to speak out due to the lack of support.
“Companies need to educate or provide guidance to their marketing department for the bidding process. If you need to put out a call for tenders and you like the idea of the agency, simply ask for the expertise of the agency. Instead take that idea and go back to your favorite contractors just because you want a cheaper price. If so, a tender should not be issued,” she added.
On a personal note, Chew added that when clients approach her asking for a quote for a design done by another company, she usually refrains from offering them one because it’s unethical.
Chew previously said on Facebook that the team went out to tender for Cenergi in late July and worked overtime to deliver a proposal in two days. She added that it was “a very rushed project”, but the client liked the concept and brought in their procurement team. However, “due to the huge price squeeze”, Chew said the team was unable to take on the job. Yet they realized a week later that Cenergi had used their design and asked another vendor to do the job. She then contacted the client to explain that design rights clearly belong to Dxclusive, as stated in the proposal and quote.
Cenergi has not commented on A+Mon how the issue has been resolved at the time of writing. Before deleting the post, Chew also shared images of the similarities.
Copyright as well as ownership of intellectual property rights seem to be a recurring issue in the marketing and advertising scene. 4As Malaysia also discussed earlier, pointing to the “alarming number” of customers who requested IP ownership during the tender stage. He also called such a practice “unethical and unfair”.
A survey conducted by A+M in our Telegram group chat previously, which had more than 100 respondents from Southeast Asia, also found that 48% said it was a norm that customers steal their ideas. Meanwhile, 41% said it had happened to them on some occasion and 11% said they had never had such an experience.
The latest incident with Cenergi shows that more can and should be done to educate customers about the importance of copyright and intellectual property rights. Khairudin Rahim, who is also the CEO of 4As Malaysia, said A+M on a personal basis that it is a basic business principle and a global standard of business relations with the creative industry that all ideas, concepts, marks and materials that a design company submits to a potential client are presented in the sole purpose of allowing them to determine if they wish to use the presentation ideas, plans and work and engage the design firm.
Intellectual property remains the property of the design company unless an agreement is reached on the appropriate compensation.
Khairudin added that it is also normal that the intellectual property of the design firm cannot be used in the way the client wants. “If the public allegations made against Cenergi SEA by Dxclusive for acting unethically by ‘stealing the work of others’ are indeed true, then it is only fair that Cenergi senior management apologize and reach quickly to an agreement on fair compensation,” he said.
Second, Khairudin said Cenergi personnel who allegedly participated in this action should face internal disciplinary action for this unethical conduct. “This will help eliminate any misperceptions of the goodwill and reputation of the GLC, not only in its home country, but also for Malaysian GLCs internationally,” he added.
The Malaysian Copyright Act 1987 provides that when a work is commissioned by a person who is not the author’s employer under a contract of service or apprenticeship, the copyright The author is deemed to have been transferred to the person who commissioned the work or to the author’s employer, subject to any agreement between the parties excluding or limiting such transfer.
In this case, Khairudin explained that the copyright of the non-commissioned work developed by Dxclusive belongs entirely to the design company as there was no prior contract or service agreement between them and the GLC which excluded or restricted the transfer of intellectual property. “The law protects the design business and the creative industry for all ideas and works presented in a speculative pitch,” he explained.
Meanwhile, Chew’s willingness to speak out against such a practice can be seen as admirable and courageous. Shaun Tay, co-owner and CEO of FCB SHOUT, said the sad reality is that such incidents remain prevalent. “I admire Chew’s willingness to stand up, push back and fight for what’s right. Inspirational stuff! The size of an agency shouldn’t be a determining factor in the strength of conviction,” said he declared.
Eradicating idea theft entirely is difficult, but we can help by being tough on client selection and contractual agreements. Reputation counts both ways. If a pitch seems suspicious to you, let it go!
FCB SHOUT currently works with clients such as RHB Bank and Darlie, and Tay said he has been fortunate to work with “many stellar clients who are incredibly reciprocal and appreciate an agency’s time and effort put into the presentations”.
“Even though they are unable to execute the proposed ideas, they have offered to compensate for the time spent and in some cases have paid the full design fee owed to us while incurring a production option more profitable way to materialize the work. It’s a win-win approach,” he explained.
Similarly, cryptocurrency firm Coinbase has also come under fire for downplaying the agency’s contribution to its Super Bowl ad earlier this year. His ad simply featuring a QR code that bounced off the screen, much like a DVD logo, sparked discussion among netizens and led CEO Brian Armstrong to tweet “No ad agency would have made this ad.”
However, The Martin Agency CEO Kristen Cavallo responded by saying the announcement was inspired by presentations the agency made in August and October of last year. She then claimed that the locations featured Super Bowl ad concepts with floating QR codes on a blank screen.
(Also read: Coinbase CEO’s Super Bowl ad saga: Industry pros and our readers say it’s the norm in Asia)
How can agencies protect themselves?
4As Malaysia has stated in its best practice guide entitled “Ownership of agency ideas and work developed during a pitch”, agencies retain rights to materials submitted during a pitch, unless that an agreement is reached in advance on the appropriate compensation. He also highlighted the fine print of the DP which could include:
1. All materials submitted in response to this RFP become the exclusive property of (Advertiser)
2. All RFP submissions are non-returnable and will become the property of the client.
“The industry will be ransomed if there is no mutual respect for intellectual property rights,” 4As said. He added that advertisers who practice and support the payment of pitch fees to shortlisted agencies should be advised that such payment “only partially offsets some of the agency fees incurred.” The fee does not confer the advertiser’s right to use the agency’s intellectual property directly or indirectly. It also does not alter the agency’s ownership of concepts and presentation materials developed by the agency, 4As said.
However, in the event that an agency signs these rights to a potential client, there is no longer such protection under the law, even when the agency is unsuccessful in a pitch. It would also mean that the agency cannot use a modified version, similar ideas and plans for all future locations, as assigned. The 4As has been firm in its position that no agency should participate in a pitch or tender where advertisers require all or part of the pitch proposal to become the property of the advertiser at pitch stage or if the pitch proposal fails.
He also suggested illustrative retention of ownership language that agencies can consider including in all presentation materials and materials as well as new business documents. For example, “The copyright in this work is vested in Ad Agency Sdn Bhd. This material is published in confidence only for the purpose for which it is provided. It may be reproduced in whole or in part, only for evaluation purposes, and then only on the condition that this notice is included in any such reproduction.
No information as to the content or subject matter of this document or any part of it resulting directly or indirectly from it, may be implemented, used or given orally or in writing or communicated in any way whatsoever to a third, being a sole proprietorship. or company or any employee thereof, without the prior written consent of Ad Agency Sdn Bhd. © Ad Agency Sdn Bhd (date).”
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Photo credit: Diana Chew Facebook page