Copyright ownership under “Work for Hire” contracts

When businesses engage a service resulting in copyright material, for instance, a graphic designer, computer programmer, copywriter or artist they often fail to secure ownership of the copyright which can result in unexpected outcomes.

For example:

          a café owner engages an artist to design and paint a mural for their café and then later decides to use the design on their cups and sell merchandise – this may in fact be breaching the original artist’s copyright.

          A business hires a computer programmer to write a client services program and then later wants to franchise their business model, including use of the program, to then find that it is a breach of copyright.

Unlike in the United States, where under “work for hire” arrangements the principal will often own the copyright rather than the author, in Australia, the copyright is owned by the author unless otherwise agreed (See Copyright Act 1968 (Cth)).

You can either license (the granting of a right to use) or assign ownership of intellectual property. If you do not have a written agreement dealing with copyright ownership when engaging a contractor you may only be receiving a limited license. The scope of this license is determined on a case by case basis which can lead to protracted litigation if disputed.

You can seek to extend the scope of an original license later, for instance, our café owner agreeing with the artist to further license the artwork for merchandise purposes, but it can be costly if the copyright owner chooses to seek additional compensation.

We recommend that whenever you engage a service resulting in copyright materials you record the terms of the agreement in writing including ownership of the Copyright.

If you would like assistance with service and contractor agreements or copyright please do not hesitate to contact Tasman Wylie on 8223 3199 or tasmanwylie@humetaylor.com.au.

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