Many small business outsource creative tasks such as logo design to independent contractors or third-party service providers such as Fiver or 99 Designs. There a many benefits to utilizing these services but they also come with unique risks for the unwary, especially as it relates to your business’ intellectual property rights.
Because you are paying the service or independent contractor, you may expect that you will own the work he or she produces. Unless your contract with them specifically states otherwise, this will not be the case. Over looking the ownership rights can result in serious legal and financial problems that can be avoided by including a “work for hire clause” in your agreement.
It is essential that you use proper legal agreements when working with third-party providers to ensure you actually own the work you have hired them to create. Verbal agreements are not sufficient. You must have a written agreement for your company that includes a work for hire clause.
Copyright an the Work for Hire Clause
Independent contractors typically retain full copyrights to their work. This is true of all works of authorship, such as written articles, music, graphic art, software, videos, photos, blueprints, designs, and others.
If your contract does not have a work for hire clause, your rights will likely be limited to simply a license to use the work. This can be disastrous if you intended to repurpose or resell the work.
Limitations of the Work for Hire Clause
A work for hire clause is not all inclusive. The only types of creative work that are qualified to be covered by work for hire clauses must fall into one of these categories:
- a contribution to a collective work, such as a magazine or literary anthology
- a part of an audiovisual work
- a translation
- a supplementary work, such as an appendix, bibliography, or chart
- a compilation
- an instructional text
- a test
- answer material for a test, and
- an atlas
Assignment of Copyrights
If the work you are trying to protect does not fall into one of the above nine categories, the work for hire clause will not work for you. Instead, for work that falls outside of this domain, you will need to include an “assignment clause” in the contract to transfers ownership to you.
This is not an overlly complex problem and can be easily solved with the proper contract language. If you need help creating new contracts, we can help you write agreements that grant you the most complete and comprehensive ownership rights possible. Give us a call or complete a short Prospective Client Questionnaire and we will follow up with you!
