Ask a Lawyer // February 2017 // Independent Contractors and Intellectual Property

Recently a creative industry client contacted me with a problem whose cause warms my heart. It seems this client has so much work that they need to hire some independent contractors to help them clear the workload, but they didn’t have enough ongoing work to justify hiring a full time employee. Sounds great! But they had a question about intellectual property in light of the independent contractors.

NOTE: that this “problem” does create some issues from an employment law standpoint, but I am not going to bore you with that stuff—that is the topic perhaps of the next column.

So the question is essentially this: Who owns the rights to the work the independent contractors create for my clients? Well, to answer that question, we have to look at some basic items of copyright law and specifically the Work Made for Hire Doctrine.

As a general rule, the author (creator) of a work owns the copyright to everything they create and set into an fixed medium of expression. However, that rule does not apply when the creation is a Work Made for Hire. In a Work Made for Hire context, the employer or client owns the copyright. There are two ways in which Work Made for Hire comes into play,

  1. when the creative person works as an employee, which case the employer is the owner of the employee’s work, so long as that work is created within the scope of the employee’s work for the employer.
  2. When the creative person is hired as an independent contractor provided three things are present.

If a creative worker is hired as an independent contractor, the work created becomes the property of the paying client or hiring entity so long as three conditions are met:

  1. The work is specially commissioned. Honestly, to an extent, this Congressional language for a specified engagement, meaning the independent contractor was hired for the specific purpose of creating the work.
  2. The work is being done pursuant to a written agreement that specifically states the work is being made for hire. More on this in a second.
  3. The work falls into one of nine categories of work as defined in the Copyright Act, those are a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas.

When a dispute about the intellectual property arises between the independent contractor and the hiring agency, two questions will be asked (or rather should be asked):

Was there a written agreement that said it was a work made for hire? And
Was the work within the nine categories?

The Written Agreement

You have a written agreement for your independent contractors, right? When hiring an independent contractor to help you, make sure you have a written agreement that you drafted. I strongly suggest staying away from contracts prepared by your independent contractors. It is not just that they are usually written by the law firm of Google, Bing & Yahoo!, it is also that even if competently written, they may be drafted in a way that will cause more problems than it will solve. Invest the money to have an independent contractor agreement drafted with your needs in mind, including specifically, the intellectual property rights.

Any written agreement should specifically state the deliverable you are seeking is a “work made for hire.” Please make sure to use that phrase. There is no getting around this requirement and often times when a dispute arises, the first and most important question will be whether there was a written contract that said it was Work Made for Hire. If there is not, usually there is little recourse and the intellectual property stays with the creator, in this case the independent contractor who could hold your work for hostage.

The second question is whether the work falls into one of the nine statutory categories. Some of them are quite specific. But, this is the second substantive question in the analysis and there is some room for factual dispute.

But if the work made for hire does not fall into one of the nine categories, your written agreements should have a clause that says something along the lines of “if the work does not fall within the nine categories, the independent contractor agrees to sign any documents necessary to transfer the intellectual property rights to the work.

Of course ultimately, the intellectual property will not belong to the creative agency, it will ultimately belong to the client under a similar work made for hire doctrine.

The one thing that good agencies should do for their independent contractors is ensure that the contractor has a portfolio right to use the deliverable to advertise their own work. Just as the creative agency should secure a portfolio right for their work, the contractor has that right as well.

If you need help drafting an independent contractor agreement or reviewing one, please consult an attorney, it will be worth the investment.


BIO Disclaimer

MATT JOHNSTON IS A SOLO ATTORNEY WITH A FOCUS ON SMALL BUSINESS REPRESENTATION, COPYRIGHT AND TRADEMARK LAW, AND DISPUTE RESOLUTION. MANY OF MATT’S CLIENTS ARE DESIGNERS AND CREATIVE PROFESSIONALS WHOSE CONCERNS OVERLAPPING MATT’S PRACTICE AREAS. MATT CONCENTRATES ON DRAFTING CLEAR CONTRACTS OF ALL TYPES AND HELPING DESIGNERS WITH THE LEGAL SIDE OF THE DESIGN BUSINESS. AS A BENEFIT TO AIGA MEMBERS, MATT OFFERS A 10% DISCOUNT ON ALL CONSULTATION APPOINTMENTS, FLAT FEE PROJECTS, AND HOURLY FEES.

THE CONTENT OF THIS COLUMN IS FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS LEGAL ADVICE APPLICABLE IN ANY SPECIFIC SITUATION. NO ATTORNEY-CLIENT RELATIONSHIP IS CREATED THROUGH THIS COLUMN. IF YOU NEED CONFIDENTIAL LEGAL ADVICE, MATT IS AVAILABLE FOR PRIVATE AND PRIVILEGED CONSULTATIONS. CONTACT MATT IF YOU HAVE SPECIFIC CONCERNS.

By Matthew S. Johnston
Published February 7, 2017
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