Contractor Copyrights

Want to pay a contractor to produce creative material for you, and then actually own the copyrights? Getting ownership of contractor copyrights is tricky.

Copyrighted material – such as text, images, music, or code, is probably essential for your creative and commercial efforts. None of us has the time or talent to do all of this ourselves. So you have naturally turned to experts to help provide this material.

Contractors are essential for many projects.

You could hire employees for this purpose.  However, like most projects, your project is probably a short-term project. In “the good old days,” this would not be a problem. Employees had no rights, so you could just hire and fire them at whim. These days, however, your employees have rights and benefits. Some of your employee rights, for example, can include unemployment insurance, social security, tax withholding, and the like. You may not want to go back to the Victorian era, but at the same time, you may not find it feasible to hire someone. 

To avoid this hassle, you can use contractors.  Contractors deliver results and don’t burden you with a lot of responsibility. You pay money, expect to obtain the benefit of the deal (the work and the IP rights), and then no more hassles or obligations! Unfortunately, the generally older IP laws have not caught up with the modern world. Thus your simple expectation breaks down when it comes to IP. You should be aware that contractor copyrights are particularly tricky.

For contractors, just because you paid for it doesn’t mean you automatically own the IP.

To somewhat oversimplify, if you want to pay someone and obtain ownership of copyrighted material, the following legal considerations can apply:

  • Under Federal law, full copyright ownership requires a “work for hire” agreement.
  • “Work for hire” agreements can imply (and in California, can define) that the worker is an employee.
  • Employees are legally entitled to various employee benefits.
  • Contractors are not legally entitled to employee benefits.
  • Absent an assignment; copyright ownership remains with the contractor.
  • Assignments for copyright ownership must be in writing.
  • Copyright assignments that are not “work for hire” can be terminated by the author or heirs after 35 years.

Getting legal ownership of the IP you paid for can be tricky

The inconsistency between the older IP laws and the newer contractor laws creates wacky legal problems.  You can try a more aged strategy, which is to put “work for hire” terms in your contract agreements. The idea is to acquire full copyright ownership this way automatically.  Unfortunately, such “work for hire” terms can be inconsistent or even incompatible with the modern definition of “contractor.” These conflicting rules open the door to potential legal headaches.

Alternatively, you can skip the “work for hire” clause. Instead, as part of the deal, you require the author-contractor to assign the copyright to you or your company. The assignment route is usually adequate, but not completely perfect. To do this, you will have to arrange for additional assignment paperwork. You should also realize that 35 years later, Federal copyright law allows an author-contractor to petition to terminate this assignment.

Thirty-five years is adequate for most purposes. But what if you are thinking on longer terms? Here, you might try to work around the 35-year copyright assignment termination issue. One option is to contract with a corporation that, in turn, “work for hire,” employs the author.