As a business owner, you may have employees who create products, software programs or any number of things that set you apart from the competition. You may also bring in independent contractors to work on specific projects or contract with professionals to create artwork or other material for your branding.
A common question is who has the right to this work that someone does as part of their job? This is known in intellectual property (IP) law as “work made for hire.”
Typically, an individual creator can’t copyright or profit from this work. Those rights belong to the party that hired them. If someone created a new process or piece of equipment while they were your employee, they can’t sell it to others. If they wrote a jingle for your TV and radio ads, they don’t have the right to let others use it for a fee – or for free.
Lack of a contract can make things less clear
The “work made for hire” concept can get murkier if there is no formal relationship or contract in place before unique creations are constructed. Maybe you let your budding artist nephew design your logo, which he does at no charge. If you find yourself in court challenging his right to sell it or copyright it, it would need to be determined whether there was, in fact, an employment relationship in place before he began concept designs.
While work created as part of an employee’s job clearly falls into the category of work made for hire, work created by people working as independent contractors or hired for a specific project may not. That’s particularly true when there isn’t a solid, detailed contract in place. This is just one reason why it’s crucial to have an employment agreement or other contract in place with anyone who does any work for you.
With experienced legal guidance, you can help ensure that contracts effectively protect your IP rights to work that you’ve paid for. You can also better protect your business if these rights are challenged.