Who Owns a Website Created By Contractors?

When a person or company hires an independent contractor (nonemployee) to create or contribute to the creation of a website, it must make certain to obtain ownership of the copyright in the contractor’s work.

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When a  person or company hires an independent contractor (nonemployee) to create or contribute to the creation of a website, it must make certain to obtain ownership of the copyright in the contractor’s work. To do this, a written agreement should be signed by the contractor. You can use:

  • a work made for hire agreement, or
  • a copyright assignment agreement.

Work Made for Hire Agreements

Certain types of works created by independent contractors are considered to be works made for hire to which the hiring party automatically owns all the copyright rights —provided that: (1) the hiring party and independent contractor both sign an agreement before the work is created stating that the work shall be a work made for hire, and (2) the work falls within one of the following categories:

  • a contribution to a collective work (a work created by more than one author such as an anthology)
  • a part of an audiovisual work
  • a translation
  • “supplementary works” such as forewords, afterwords, supplemental pictorial illustrations, maps, charts, editorial notes, bibliographies, appendixes and indexes
  • a compilation
  • an instructional text
  • a test and test answer materials
  • an atlas.

Websites are ordinarily collective works and/or compilations. This means that such works can be works made for hire if the independent contractor signs an agreement to that effect before starting work.

Example: AcmeSoft, Inc., hires David, a freelance web graphic designer to create graphics for its website. AcmeSoft has David sign an agreement before he commences work stating that his work on the manual shall be a work made for hire. When David finishes his work, the graphic will be considered a work made for hire to which AcmeSoft owns all the copyright rights. Indeed, AcmeSoft will be considered the author for copyright purposes. David have no copyright ownership interest whatsoever in the graphics.

User manuals and other software documentation (whether printed or online) written by independent contractor technical writers would probably fall within the instructional text, supplementary work and/or collective work categories. 

EXAMPLE: AcmeSoft, Inc., hires Alberta, a freelance technical writer, to write the user manual for its new small business accounting software. AcmeSoft has Alberta sign an agreement before she commences work stating that her work on the manual shall be a work made for hire. When Alberta finishes her work, the manual will be considered a work made for hire.

Assignments

The word “assignment” means a transfer of all the rights a person owns in a piece of property. So whenever a person or entity transfers all the intellectual property rights it owns in a work of authorship, the transaction is usually called an “assignment” or sometimes an “all rights transfer.” 

When such an assignment transaction is completed, the original intellectual property owner no longer has any ownership rights at all. The new owner—the assignee—has all the rights the transferor formerly held .

Unless the work involved has been patented (a rare situation), you’ll normally use a copyright assignment to transfer ownership to others or obtain ownership of others’ software or web content. 

An assignment of a copyright or patent must be in writing to be valid. However, an assignment need not be a lengthy or complex document. At a minimum, it should contain:

  • the names and addresses of the person creating the work and the person or entity paying for it, and
  • a description of what rights are being transferred--for an assignment, the following phrase may be used: “John Smith hereby assigns all his right, title, and interest in [description of work].”

The assignment agreement may be signed before or after the work is created.

What If the Contractor Does Not Sign a Transfer Agreement?

If the contractor does not sign a work for hire agreement or assignment, there are two possible consequences:

  • the contractor will be considered the sole copyright owner of the work he or she creates, or
  • the contractor and hiring party will be considered to be joint authors and share ownership.

Creator Owns Copyright

First of all, unless the hiring firm can obtain an ownership interest by claiming joint authorship or by virtue of some written document, the contractor will solely own all of the copyright rights in her work product. However, all will not be lost for the hiring firm. At the very least, a company or person who pays an author to create a protectible work has a nonexclusive license to use it as intended.  This seems only fair, considering that the hiring party paid for the work. A person with a nonexclusive license in a work may use the work, but may not prevent others from using it as well. Nonexclusive licenses may be implied from the circumstances; no express agreement is required.

Joint Work Created

The best thing that could happen from the hiring firm’s point of view, would be for it to be considered a joint author of the work. This way, it would share ownership with the contractor. However, for a person or company to be considered a joint author, it must contribute actual copyrightable expression to the finished work. Simply describing how a website should function or contributing other ideas or suggestions is not sufficient.

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