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‘Unethical’ pitch demands still exist despite ‘concerted efforts’ to curb them, says 4As

The Association of Accredited Advertising Agents Malaysia (4As) has once again spoken out against “unethical and unfair” pitch clauses that demand the ownership of intellectual property (IP).

In a latest statement, 4As CEO Khairudin Rahim (pictured) said that despite “concerted efforts” in alliance with the Malaysian Advertisers Association (MAA) to seek cooperation and understanding within the industry, the 4As has continued to receive “disturbing reports” that certain advertisers, though not MAA members, still continue to include unethical demand clauses in their request for proposals (RFP) documents.

These include “All materials submitted in response to this RFP become the sole property of the advertiser” and “All submissions for the RFP are not returnable and shall become the property of the client”, Khairudin said.

According to him, the 4As has been legally advised that these clauses are “impotent and ineffective” from a legal standpoint, as they do not offer a binding relationship between the agency and advertiser in a situation of a service being provided where no formal contract or letter of appointment has yet to be signed.

“A pitch for all intents and purposes is an offer to provide a service to the advertiser or client. Unless the advertiser is acceptable to this offer with an agreed consideration to be passed, ownership of the IP remains with the advertising agency,” Khairudin said. Therefore, the 4As has reminded agencies not to participate in any RFPs containing these conditions. He added:

Our stand has always been – and will continue to be that agencies should learn when to say ‘No’ to such unfair demands.

The 4As also urges CEOs of advertising companies to be aware of the details of their RFPs and put an “immediate stop” to this unethical practice. Meanwhile, Khairudin also called for mutual respect between advertisers and agencies as the growth and development of the industry depends on the health and mutual co-existence of both parties.

“We can and we must work together to ensure each other’s success,” Khairudin said, adding that the 4As is “always ready” to offer assistance and has developed a best practice guide relating to ownership of agency developed ideas, plans and work created for an RFP, which is readily available on its website.

In July last year, the 4As spoke out against an “alarming number” of marketing communications clients in Malaysia that have demanded ownership of IP including ideas, plans and work product described in the proposals regardless of which agency wins the pitch. It called for the practice to “cease immediately” and recommended agencies to retain ownership of all IP unless the client is prepared to pay the agency fairly for the rights.

(Read also: Marketers: More awareness needed to curb unethical pitch practices in Malaysia)

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