Modern workplaces are marked with a variety of employment classifications. Sometimes it’s a challenge to properly classify your workers—are you hiring employees or independent contractors?
While these are questions our corporate and business law attorneys are able to help you navigate, we want to dive further into another issue with bringing on contractors: Do those individuals own the intellectual property produced from their work with your company?
Why Does It Matter?
Intellectual law protects original ideas, concepts, designs, ideas, and processes from infringement by third parties. But, the author of the concept isn’t always the sole owner or even an owner. Most contracts have boilerplate language about how employees do not retain intellectual property rights to the work they do on behalf of the company. The company retains these rights exclusively, but contractors aren’t governed the same way.
It’s important to make sure you get this right. It protects your intellectual property in the immediate term while also considering how intellectual property issues could impact the value of your business in the future.
Does the “Work for Hire” Exception Apply to Contractors?
Contractors aren’t governed entirely by the company nor are they entirely beholden to the company’s reputation and long-term success. The businesses have a short-term need that contractors are able to fulfill without the costs that come with hiring an employee to handle. But, because of this, they have more autonomy over the work
In the case of copyrights, generally speaking, whoever made the original work owns the copyright. The exception to this guideline is known as “Work For Hire.” Work For Hire means that if an employee creates a unique work for their employer to use, the employer will own the copyright. The Copyright Act explicitly defines Work For Hire as being either “a work prepared by an employee within the scope of their employment” or “a work specially ordered or commissioned for use.”
Pay attention to the careful wording there, because it is the result of several Supreme Court cases debating when something is truly Work For Hire. The Copyright Act uses the term “employee” in the strict sense, meaning an actual employee and not an independent contractor. Now, an independent contractor could make something for an employer that would fall under Work For Hire, but it would have to be “specially commissioned” and understood by both parties in advance (meaning you need to write it into the contract signed and agreed to by both your company and the contractor).
Intellectual Property Clarity with CLARK.LAW
As you can see, intellectual property law is not always as straightforward in modern workplaces. More and more businesses are adapting to a future with diverse backgrounds and capabilities contributing to the betterment of the organization. If you are trying to determine what intellectual property rights the members of your team have, contact CLARK.LAW for a law firm that understands intellectual property and business law and will help you make smart, data-driven choices that protect your work.
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