Guide from Trademark Lawyers in NYC : Design Services Agreement

Design services agreements must explicitly state who owns the resulting designs and any associated intellectual property. When a designer creates a logo, brand identity, or visual asset that will function as a trademark, the agreement must clarify ownership before work begins. Trademark lawyers in NYC emphasize that vague language regarding ownership can lead to costly disputes. The agreement should include language such as all designs and work product created shall be the exclusive property of the Client, or specify conditions under which the designer retains portfolio or attribution rights. Additionally, the agreement must address whether the designer can use the work for promotional purposes or in their portfolio.

Design services agreements should address trademark registration responsibilities and ongoing use rights. If the designer creates a mark intended for federal trademark registration, the agreement must clarify who files the application and bears the registration costs. The contract should specify permitted uses of the design, any geographic or industry restrictions, and whether the designer can create similar designs for competitors. Trademark lawyers in NYC recommend including provisions about quality control and brand consistency, particularly if the designer will continue working with the client after initial creation. This ensures that any future modifications to the design maintain trademark integrity and do not dilute the mark's strength.

The agreement must clearly define the scope of work, deliverables, and compensation structure. This section should specify the number of design concepts, revision rounds, and file formats provided. Trademark lawyers in NYC ensure that compensation terms address whether payment is flat fee, hourly, or milestone-based. The agreement should also specify payment schedules, such as a deposit upon signing, partial payment at milestones, and final payment upon delivery. Deliverables should be detailed, including whether the client receives original files, source files, and usage licenses. If the design will be used for trademark purposes, the agreement should confirm that all necessary file formats and specifications for federal trademark registration will be provided.

Design services agreements should include confidentiality clauses protecting both parties' proprietary information. For trademark-related designs, this is particularly important because the design may represent unreleased brand identity or strategic business information. The agreement may include non-compete language restricting the designer from creating similar designs for direct competitors during the engagement and for a specified period afterward. However, trademark lawyers in NYC note that non-compete provisions must be reasonable in scope, duration, and geographic area to be enforceable under New York law. The agreement should also address the return or destruction of confidential materials and any residual knowledge the designer retains.

A design services agreement should clearly state whether the relationship constitutes a work-made-for-hire arrangement. If the agreement specifies work-made-for-hire status and the design qualifies as a work made for hire under 17 U.S.C. Section 101, the client automatically owns all copyright in the design. If the parties do not intend work-made-for-hire status, the agreement must include an explicit assignment clause transferring copyright from the designer to the client. Trademark lawyers in NYC stress that ambiguous language regarding copyright ownership can result in disputes over trademark use and registration rights. The agreement should also address moral rights, which allow designers to claim authorship and object to certain modifications, and specify whether the designer waives these rights in the work product.

When a design will be registered as a federal trademark, the design services agreement should include cooperation provisions. The agreement should require the designer to provide any necessary documentation, declarations, or assistance needed for trademark registration. It should specify who is responsible for hiring trademark counsel, such as design services agreement specialists, and bearing associated costs. The agreement may also address the designer's obligations if the trademark registration is challenged or if quality control issues arise. Additionally, the contract should clarify that the designer will not use the registered trademark in ways that could dilute or damage its distinctiveness.

When a design services agreement dispute arises in New York, the parties may pursue resolution through arbitration, mediation, or litigation. Many design services agreements include arbitration clauses requiring disputes to be resolved through arbitration rather than court proceedings. New York courts enforce arbitration agreements under the Federal Arbitration Act and New York law. If litigation occurs in federal court, the Southern District of New York applies federal trademark law, copyright law, and general contract principles. Trademark lawyers in NYC representing clients in this district understand the court's procedural requirements, filing deadlines, and discovery rules. Additionally, New York state courts apply the Uniform Commercial Code and common law contract principles when interpreting design services agreements. The choice-of-law provision in the agreement typically specifies whether New York state law or another jurisdiction's law governs the contract.