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Using freelancers: do you own what you have paid for?

Using freelancers or contractors to work on projects or to carry out particular assignments has a number of advantages and is a popular option. Principally, because the freelancer or contractor can be engaged flexibly to allow for peaks and troughs in work, projects coming to an end etc and specific skills and experience can be hired for a short term period.

There are however also disadvantages. Freelancers tend to be more expensive and some businesses feel that having too many freelancers detracts from the culture or team spirit of the business with freelancers tending to be less interested in how the business develops over the longer term than employees. There is also another major trap for the unwary business where freelancers are used to create or design anything.

Protecting Copyright

The position with intellectual property rights which are created by a freelancer or contractor is very different from those rights created by an employee and one of the commonest causes for dispute and uncertainty is the ownership of intellectual property rights in websites, designs, logos or graphics which are created by freelance or third party designers. This uncertainty can be removed and disputes avoided very simply by acting pro-actively and documenting the terms on which materials are designed and created.

Copyright will exist in a wide range of works including logos, typefaces, text, graphics, music and computer software. There is no need to register anything and it simply exists as soon as an original work is created. The basic rule with copyright is that the first owner of that copyright will be the person who created it unless the copyright is created in the course of employment in which case the employer will be the first owner of that copyright.

What this means in practical terms is that where the design and development of a new website is commissioned from a website designer the text, graphics and coding behind the website will be owned not by the person who has paid for its development but by the website designer. The position is the same with logos and artwork commissioned from freelance designers and for copy and graphics commissioned from marketing agencies or copywriters.

This is not quite the end of the story in legal terms. It will always be open for the business who has commissioned the materials to argue that there is an implied term that all copyright should in fact be owned by the business. Such arguments have from time to time been accepted by the Courts but cases generally turn on their individual facts and there is no guarantee of success. Legal disputes are of course to be avoided. They are expensive and protracted and it can also often be embarrassing for this kind of issue to arise particularly where the copyright work in issue is being used by or has been sold to customers.

Basic precautions

It is, however, possible to avoid many of the pitfalls in this area by taking the following fairly basic precautions:

1. Have a contract

Ensure that when any work is commissioned from a freelancer that the work is done under a written contract which includes a clause assigning the intellectual property rights in the work to you or specifying that everything will be owned by you.

This would also be a good time to set out in writing the other terms in which you have agreed that the freelancer will do the work e.g. pay, duties, confidentiality, length of assignment etc.

A written contract does not need to be lengthy and quite often a simple letter will suffice. Most businesses will use third party contractors from time to time and therefore it will usually be worthwhile developing a standard, one size fits all, letter or agreement;

2. Take an assignment

Inevitably there will be occasions where freelancers do work without a written contract. Where work has already been done by a third party without any formal agreement as to the ownership of copyright, take an assignment from that third party to ensure that all intellectual property rights are owned by you.

Getting a third party to sign such a document is often easier before a dispute arises and/or where there is the possibility of success. The assignment document is not a complicated document and can be drawn up fairly quickly and cheaply;

3. Don’t forget about employees

While the position is better where employees create copyright works it also makes sense to ensure that all employees, and particularly those who may create works during the course of their employment, have employment contracts which set out the scope of their employment and specifically deal with the creation and assignment to you of intellectual property rights.

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About the Author: Nick Phillips is a Partner in the IT/IP group of the Surrey based law firm Barlow Robbins LLP. Nick specialises in Intellectual Property and IT work.

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