Any work product created by company employees belongs to the employer. However, business owners are surprised to learn that intellectual property rights to work product created by independent contractors hired to develop things like logos, designs, and software belong to the independent contractor. Unless the business actively takes steps to protect its interest, the “IP” rights in the work belong to the independent contractor. This can be especially problematic when a company tries to sell its business or reproduce the work product.
Companies often misplace their reliance on the “work for hire” doctrine. This concept grants IP rights in the independent contractor work product to the business, but only when certain conditions are met. The company must have a written contract with the independent contractor stating that the deliverables are a “work for hire.” The work must also be: a contribution to a collective work; a part of an audiovisual work; a translation; a supplementary work; a compilation; an instructional text; a test or answer material for a test; or an atlas. Businesses should also be mindful that they are not in a State where retaining a contractor to create a “work for hire” would result in the independent contractor being classified as an employee under the State’s law. Businesses may rely on the “work for hire” doctrine only to find that the work product does not fall into one of the “work for hire” categories, and the IP in the work product ultimately remain with the independent contractor.
The comprehensive approach when engaging an independent contractor is to create a contract containing a clause that effectively assigns the IP in the work product to the company retaining the independent contractor. We can help.