Who Owns Creative Property, the Creator or the Company?
The answer is not entirely clear under copyright law, and is an issue with which many different courts have struggled. However, there are some general principles that apply under the federal copyright laws.
Many creative individuals throughout the world are authors, artists, photographers, musicians, designers, and others who create what we refer to as “intellectual property,” that is, products of the mind. Intellectual property includes a painting, a sculpture, a poem, a book, an article (such as this one), a photograph, a software program, architect’s plans and drawings, essentially any original text or artwork, a play, a new logo, choreography for a ballet, music, product packaging, a new product design, a script, a business plan, and many other creative endeavors. This intellectual property can often be protected by a wide variety of legal means, including copyright law, although that is but one of the many possible forms of protection available, depending upon the type of work involved.
Who owns the copyright to the work, which these individuals create, the individual creator, or the company who hired them? My hope is to try to answer many of the questions that we know, from our law practice, that people have, but which may otherwise not get asked or answered until it is too late to avoid serious problems. The answer is not entirely clear under copyright law, and is an issue with which many different courts have struggled. However, there are some general principles that apply under the federal copyright laws.
In general, for most (but not all) types of intellectual property, under Section 101 of the federal copyright laws, an independent contractor or freelance creator owns the copyright, unless he or she has signed a written agreement that this is a “work for hire.” If, and only if, there is such a written agreement in place, then the company who commissioned the creator will normally own the intellectual property. In other words, Congress has taken a strong position to protect the work of individual creators, who in essence are conclusively presumed to own the copyright on the intellectual property they create, absent a specific agreement that says someone else owns it as a “work for hire.”
Companies who, for example, have a part-time artist “on the payroll” or free-lance individual contribute work product to them, may be unpleasantly surprised to find they do not own what has been created. However, those creators who are full-time employees under the traditional definition of an employee are not protected by the “work for hire” doctrine, and the company that hired them will normally own their work. To determine if a creator is an “employee” the courts will normally look to a range of factors, including whether the person works full-time for a single employer, whether FICA is deducted, whether they are paid a salary or hourly, whether they are eligible to receive employment benefits, whether they are paid for vacation and sick time, and other factors similar to those used at times by the I.R.S. but not applied so broadly.
One important question is whether the “work for hire” agreement must be signed before the intellectual property is created, or whether it may be signed later, after the property has been created. This appears to be an “open” question in some states, like California. In other parts of the country, one appellate court ruled that the agreement must be signed before the property is actually created. If not, then the creator will own it, even if an agreement is signed later.
However, the Supreme Court declined in December 1995 to review a decision by a different appellate court, in New York, that said just the opposite, namely, that the agreement can signed later after the property has been created, so long as there was an