Did you know that you don’t necessarily own the copyright to creative work you hired someone else to produce for your business?
Just because you hired (and paid) someone to….
- design a logo
- write your marketing copy
- shoot your promotional video
- illustrate your process
- take photos of your jewelry…
- record opening music for your web series
It doesn’t mean that you actually own that creation.
When you hire someone as a contractor by default they retain ownership in whatever creative work they do for you. Unless they specifically transfer their copyright ownership to you in writing, they are still considered the owner.
Let’s assume that you hired someone for design and never took that next step to get the ownership issue all sorted out. This would mean that you have the right to use the creative work for the purpose hired for but nothing else. So, if you had a logo created, you’d be able to use that design as a logo, but you wouldn’t have the right to use it as a t-shirt design or anything else. But you don’t own that design. There’s still a whole lot of gray area around how you can use the design because nothing was captured in writing – but at the very least, we know both you and the designer understood the design to be used as a logo.
Whether you’re hiring someone to produce creative work for your business or you’re the creator, you need to look to see what their contract says about intellectual property/ownership of the work. I’ll write this post from the perspective of the business owner hiring the creative. If you’re the creative, you should reverse everything that I say.
Transfer by work-made-for-hire.
Ideally, if you’re outsourcing creative work for your business you want to make sure there is work-made-for-hire (aka work-for-hire) language in the contract. This means that the contractor is never considered the original owner of the work. Instead, you are. There is no actual transfer of rights because they basically are designing in your shoes. A work-made-for-hire must be in writing, and must be agreed upon before the work has begun. In other words, you cannot go back and get a work-made-for-hire.
Work-made-for-hire applies to specific types of creative works. These include works that are specially ordered or commissioned for use as:
- a contribution to a collective work;
- a part of a motion picture or other audiovisual work;
- a translation;
- a supplementary work (for example, a foreword, afterword, pictorial illustration, map, chart, table, editorial note, musical arrangement, answer material for tests, bibliography, appendix or index);
- a compilation;
- an instructional text (a literary, pictorial, or graphic work prepared for publication use in systematic instructional activities);
- A test;
- Answer material for a test; or
- An atlas.
The work must have been specifically created for the client and fall into one of the categories above in order for work-made-for-hire to even be an option. Graphic design tends to fall into one of these categories: contribution to a collective work, a supplemental work or a compilation. As a back up, in case the work can’t qualify as a work-made-for-hire it’s smart to also have an assignment clause in the contract.
Let’s discuss assignments now…
Transfer by assignment.
An assignment is a transfer of ownership in a creative work. Unlike the work-made-for-hire, the creator is still considered the original owner. Also, unlike a work-made-for-hire, an assignment can be obtained after the fact. If you’re in a situation where you never had your contractor sign over ownership rights, you can still go back and handle it. Also, works that don’t fall within one of the work-made-for-hire categories can still be transferred by assignment. One huge thing to know is that assignments can be revoked after 35 years. This typically only becomes a concern in a situation where the creative work has substantially increased in value over the years.
I’ve shared before that to own a copyright means you own a bundle of rights:
- Reproduce your work
- Distribute or sell your work
- Modify your original work, or create a derivative (a work based on an original i.e. a short film based on a poem)
- Perform or display the copyrighted work
So an assignment of all of the ownership in the work means that you, the client or customer, will own the right to do all of these things.
Lastly, let’s discuss a license.
Transfer by license.
First things first. Giving someone a license to rights in a creative work means that you’re granting them permission to use the creative work for certain purposes. It is not a transfer of ownership. As a last resort, and in some circumstances, the creator may agree to give you a license but choose not to transfer actual ownership. Or maybe they’ll agree to transfer ownership but for a fee completely beyond your budget. If this is the situation, you need to make sure that the license gives you the leeway to do exactly what you need with the creative work. Remember, you want to think long term and not just in the present.
I’ll give an example…
Maybe you hired a photographer to shoot new headshots for you. Their fee included a license to use those photos for promotional and non-commercial use but not commercial use. If you know you actually want to use these images in a book then you’d better be up front with that photographer. Work out the details now so that you don’t face an ugly fight over royalties down the road.
That sums it up peeps…
As you can see, it’s really important to know what your end goal is so that you can enter transfer or license agreements that make sense for you long term. If you don’t know where you’re headed, you’ll have no idea whether it makes sense to pay more for a work-for-hire that costs a pretty penny or whether a license agreement will be suitable.
As the customer, you can expect to pay more for a larger grant of rights – a work-made-for-hire should cost you much more than a license and vice versa. As the creative doing the selling, make sure your fees align with the grant of rights you’re giving your client.
If you’re a creative for hire, you should book a session with me to make sure your pricing strategy makes sense for the rights you’re granting clients in your contracts, and that you’re not leaking money in your business. If you’re a business owner, outsourcing to a creative, we need to develop an action plan to secure the rights in all the creative assets you’ve had designed for your business.