At the start of a project, the focus is never on the boring, legal, stuff. Understandably, everyone is more interested in the creative process, making it a success. However, not getting the legals right initially can leave you in a difficult (and potentially expensive) position down the line.
Friend or foe?
Imagine you engage someone to create something for you, eg a mobile application, website, or marketing materials. They are not your employee – you are friends. Something goes wrong and you fall out. If you did not sort out the contract initially, you could end up being unable to use their work or face a hefty price tag to secure the rights you need, even though you have already paid for the work.
You do not necessarily own the copyright in work just because you paid for the work to be carried out.
What is copyright? It is an intellectual property right arising automatically on creation in things like software, designs, written materials, photographs.
If the person generating a copyright work for you is your employee, then the copyright should normally belong to you. If they are a contractor or consultant, then copyright will stay with them, unless you agree otherwise with them in writing.
This may be a low risk if you remain fast friends. But if you fall out, it could be a weapon they use against you and:
- If you want investment in your business in the future, and the contractor’s work is a key asset, how will you prove ownership? Investors like things tidy – and a loose end like this could cost you.
- If the contractor owns the copyright in the work, there is nothing (short of an agreement with you) to stop them using it themselves, or for one of your competitors.
Another concern is whether you have adequate protection if they have “borrowed” their work from another source – and the owner of the original work comes after you for copyright infringement.
Here is some guidance on dealing with contractors:
- If you appoint a contractor, the starting point is that they (or their company if they operate through one) will own copyright in everything they create for you – unless you get an assignment (see point 3 below).
- You should ensure that your contractor has not copied the work from another source. You can ask them for warranties (promises) in your contract, that it is solely their own original work.
- To transfer copyright, you need an assignment from the contractor, in writing, signed by them. If they operate through a company you may need an agreement with the company and the contractor.
Frances Anderson is a Consultant at VWV, a national law firm with a growing office and presence in Birmingham. Frances can be contacted on 0121 227 3708 or at email@example.com.