Commentary: Many companies operate under the misconception that if they have hired and paid freelancers for their work, the company has that paid them has all of the rights to it. Quite simply, this is not necessarily true.

Simply paying someone for their services does not mean that you own the rights and proceeds of that work. Admittedly, it is quite counter-intuitive: you provided your consultant with the idea; they provided services; and you paid for it. You would think this would provide you with all rights in that work. However, the law generally requires that there be a written agreement, signed by the person giving up their rights. It should provide that the services are being performed as a “work-for-hire” and that the contractor is giving up and assigning their rights to it. If you do not specifically provide this in a signed agreement, the contractor could later claim rights to their work; could claim that they are a joint copyright holder; or otherwise cause problems as you try to promote your products or services.

Moreover, although the law provides for greater protection to companies for work created by employees rather than independent contractors, nevertheless, we generally recommend that companies apply the same system described above their employees, as well. Again, this should be in a written agreement, signed by the employee which specifically refers to the fact that employee’s services are being provided to the company as a “work-for-hire.” This is often included within the employee’s employment agreement. However, if the employee did not sign an employment agreement, this still could be accomplished through a separate, stand-alone document.

Comments/Questions: ljm@gdnlaw.com

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