OUCH! Did You Know? You Don’t Own Your Website Anymore!
OUCH! Did You Know?
You Don't Own Your Website Anymore!
(Even Though You Paid For It!!)
What could be more in your business than ownership?
And what exactly is at the heart of your business – ownership of your valuable intellectual property.
And it involves outsourcing – the hiring of an independent contractor to develop valuable intellectual property for your business, such as:
- your website,
- your sales page,
- your software,
- your articles,
These are all examples of what intellectual property attorneys call “copyrightable authorship”.
And if you’re like most businesses, you probably assume that if you pay the contractor to create this stuff, you own it. Right?
Wrong, in most cases, in my experience in the trenches of my full-time Internet law practice. And here’s why.
The “Work Made For Hire Rules”
It’s all about the “work made for hire” rules of the U.S. Copyright Act.
Boiled down to its essence, here’s what the Copyright Act says:
“you will own the copyrights embodied in “copyrightable authorship”, created by your independent contractor (i.e. the person or entity who creates the work product), only if all three of these elements are satisfied:
- there is a written “instrument” (typically an agreement or contract),
- that is signed by the independent contractor, and
- which provides that the work product is a “work made for hire”.
And if any of these three elements is not satisfied, your independent contractor owns the work product, by default.
And that’s the result… even if you pay for it, in full!
All you get is a non-exclusive right to use the work product.
And it’s even questionable if you have rights to modify the work product.
You’d be surprised at how many business owners I see in my Internet law practice who are shocked to discover that they don’t own what they incorrectly assumed to be their valuable intellectual property.
And you’d be even more surprised at the cost in legal fees (and there’s no way to attach a value to the cost of headaches and anxiety involved) for resolving messes regarding ownership.
For example, work made for hire clauses should be in your agreements with contractors, including:
- consulting agreements,
- development agreements, and
- services agreements.
And if you make the mistake of not providing for work made for hire at the beginning of your relationship with a contractor, you’ll need these agreements to “reel in” the copyrights:
- a copyright assignment, or
- a website ownership and transfer agreement.
So, now you have a better understanding of the old cliché – that ignorance of the law is no excuse!
Life is so much easier if you understand the basic legal rules, plus have the required legal tools and documents at your fingertips.
So, What Do You Do If You’ve Run Afoul of Work Made For Hire?
The short answer is – you need to have the outsourcer sign a copyright assignment in your favor. This will have the effect of transferring the copyrights to you or your business.
If your outsourcer has completed the work, and there will be no future revisions or additions, then a straight forward copyright assignment will work.
However, if the outsourcer makes future revisions or additions, then you will need an additional clause transferring and assigning copyrights to these future works, to become effective automatically upon creation.
Here’s How To Make Sure You Own All Of Your Intellectual Property, and You're Compliant, at the same time…
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Remember: legal protection is a massively important part of your business, and it’s one you cannot afford to ignore any longer.
Disclaimer: This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.