Jeff Ellsworth, The Daily Record Newswire
What is intellectual property? It can be blogs, logos, slogans, photographs, videos, theme songs, websites, you name it - if a creative was behind its creation, then it's IP.
Ownership and right of use of IP can be murky and oftentimes counterintuitive. However, there are a few key things you should know to ensure that IP ownership is consistent with what is often an unspoken and potentially precarious agreement.
Who owns the IP?
Oftentimes a business will use an employee or freelancer to develop a new logo or design a website without ever considering who owns the resulting IP. A commonly held belief is that if a business is paying someone to create something, then the business owns what is created. In truth, this is not always the case.
- Employee: IP created by an employee is typically owned by the employer. Nevertheless, it is always good to reinforce this understanding with employees. One legal-clad approach is for employers to obtain a written agreement stating that: (i) IP created by the employee is owned by the employer; (ii) the employee assigns all IP rights to the employer; and (iii) the employee will do everything necessary to secure IP rights for the employer.
- Freelancer: Absent a written agreement stating otherwise, IP created by a freelancer is owned by the freelancer - the business receives only a license to use the IP. This means that the freelancer can reuse any part of the IP for other clients even though the business paid for its development.
Additionally, this license grants the business the right only to use the IP for its specific, intended purpose. For example, if a freelancer creates a logo for a business, then the business is granted the license to use the logo, but not any rights to change the logo.
Attorneys often use the term "work made for hire" with respect to freelance-created IP to ensure ownership by the commissioning business. However, this status applies only if the IP fits certain criteria, such as a contribution to a collective work, or part of a motion picture or other audiovisual work. Additionally, for IP to qualify as work made for hire, it must be specially ordered or commissioned, and there must be a written agreement specifying it as a work made for hire. Long story short: Make sure you fully understand work made for hire conditions before using these agreements with any freelancers.
- Nonprofits: The same rules apply to for-profit entities and nonprofits. Just remember that volunteers are NOT employees - if anything, they are legally considered freelancers.
Ownership is not always advantageous
There are, however, some situations where a business does not need - or want - to take full ownership of the IP. In certain instances a license defining the limits of use is advantageous to both parties - e.g., it may save the business money and allow the freelancer to license a smaller portion of a larger work.
Three keys to limiting IP disputes
In summary, there are three key steps a business should take to minimize any ownership conflicts regarding IP:
- Get a written assignment of ownership in all IP that the freelancer created;
- Define the IP as work made for hire; and
- Document the specifics of what the creative was asked to produce.
If you follow these steps, it will minimize the risk of a dispute over IP ownership.
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Jeff Ellsworth is an attorney with Buckley Law PC and focuses his practice on business law, intellectual property law and estate planning. Contact him at jje@buckley-law.com. Marketing Mindset is presented by AMA PDX. Learn more at www.ama-pdx.org.
Published: Wed, Dec 10, 2014
