Imagine that you own a small business and want to launch a new website. You do not know how to build a website yourself, and neither do any of your employees. Faced with that challenge, many companies will hire an independent contractor with knowledge of Web design to build the website, either on an hourly or fixed-fee basis.
However, when a person or company hires an independent contractor 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. Otherwise, there's a risk that this independent contractor could claim "ownership" over the code, design, or implementation of the company's site.
To accomplish this retention of ownership, you'll want to have the contractor sign a written agreement to that effect. You can use either what's called a "work made for hire agreement" or a "copyright assignment agreement" to achieve this goal.
Normally, the creator of a work can claim certain exclusive rights over that work according to U.S. copyright law. That includes an artist painting a painting, a poet writing a poem, or a coder coding a website. As the owner of a business hiring an independent contractor, however, you do not want that person to "own" your company's website.
Certain types of works created by independent contractors are considered works made for hire, to which the hiring party automatically owns all the copyrights. This requires that 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 that the created work (in this case, the website) falls within one of the following categories:
Websites are ordinarily considered 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.
Consider this example. AcmeSoft, Inc., hires David, a computer science major at Vassar, as a freelance Web graphic designer to create graphics for its website. AcmeSoft has David sign an agreement before he commences work, stating that his efforts on the website 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. He is entitled only to payment on the contract.
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.
For example, imagine that 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.
There is another way to accomplish copyright ownership for a company. 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 will normally use a copyright assignment to transfer ownership to others or obtain ownership of others’ software or Web content.
An assignment of a copyright 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 assignment agreement may be signed before or after the work is created.
If the contractor does not sign a work for hire agreement or assignment before completing the work, there are two possible consequences:
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 protectable 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.
The best thing that could happen in the absence of a work for hire agreement or assignment, 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 have contributed actual copyrightable expression to the finished work. Simply describing how a website should function or contributing other ideas or suggestions is not sufficient.