Generally, of course, agencies would never sue a client over the theft of ideas. Ideas, after all, are a dime a dozen, right? Or, put another way, protecting one's own intellectual property requires gonads. Ideas, as any creative will tell you, are never a dime a dozen. They are the single most important asset any agency owns. A handful of words, scribbled on the back of a table napkin over lunch, or hastily scrawled on the bus to work, might well be powerful ideas that change the fortune of brands.
In reality, intellectual property issues in advertising are mostly misunderstood and regularly devalued. Clients drive down fees on one hand, but expect full ownership of the agency's creative work on the other.
Let's review the facts. The basis of all copyright law is "the author is the owner". Consider it carved in stone, immutably.
Unless the agency specifically assigns its rights to the client in writing (and hopefully for an additional fee), the agency will always own its creative work. It's automatic.
At which point, the picture gets slightly muddier. By virtue of their regular salaries, the ownership of all work created by the agency's creative staff is vested in the agency. So when a copywriter pens a line like "Always Coca-Cola" while working on salary, that line is always the property of the agency. Carved in stone.
Similarly when a creative team is on staff, everything they produce is automatically the property of their employer, even if their ideas never run. They can't take those ideas and then use them at other agencies.
Carved in stone. However when freelancers generate concepts, and those freelancers did not assign their rights to the agency, the freelancers still own their ideas. Carved in stone.
Even if the agency assigns copyright ownership of its work to the client, the work of freelancers remains the property of the freelancers. Carved in stone.
Similarly, all independent creative suppliers always retain all copyrights to their work. Even if a client pays a squillion dollars for an illustration, that illustration remains the artist's property unless he specifically assigns his copyright in writing to the client. Artists rarely, if ever, do that. Quite the opposite: usually their artwork has to be returned to them immediately after the agency has finished with it. Likewise, photographers own the rights to their shots.
Television and radio copyrights are even more complex. While the concept and script are the agency's property, the neg is the film company's property, protected by copyright. So when film houses specify that their work is being produced for one market for a fixed period, listen carefully. They have every right to set those terms. The same goes for radio ads.
Music copyrights are a minefield. An original jingle or sound design is always the property of its creator. Meanwhile, "buying the rights" to a famous pop song actually means licensing it, non-exclusively, for a specified market and period only.
Clients, let alone agencies, rarely understand or appreciate the nuances of copyright law. Even when a client spends a million dollars making a TV commercial, he doesn't ever fully "own" the finished product. Carved in stone.
And when agencies assign their intellectual property rights to their clients, clients automatically assume they own everything. They don't.
They own only what the agency is legally entitled to assign. Agencies can't assign other people's copyrights without consent. Carved in stone.
Ironically, all these laws are in place to protect the intellectual property of agencies. The trouble is, very few agencies ever leverage that protection.
It's a bit like carrying a condom but never using it.