Who owns the rights to a computer program written by an employee? Who owns the rights to artwork created by an independent contractor at the employer’s request and “paid for” by the employer? Although in both situations the employer is paying for works to be created, the answer as to who owns the rights in the works is different for each of these situations.
U.S. Copyright laws protect “original works of authorship” that are “fixed in a tangible medium of expression”. In other words, copyright protection is extended to works such as artwork, computer programs, text, and photographs so long as they are original (i.e. not copies of another’s work) and are not merely ideas. For example, an idea for a book or an advertising piece is not protectable under copyright laws. The book has to be written and the advertising piece has to be created. (Computer programs also may be protected under trade secret and patent laws. Different rules apply as to who owns trade secret or patent rights in a work.)
If a work is created by an employee within the scope of his/her employment, the employer is considered the author of the work and, therefore, the initial owner of the copyright in the work. If, on the other hand, a work is created by an independent contractor, then the independent contractor owns the copyright in and to the work, even though an employer has paid the independent contractor to create the work for the employer. In order to obtain ownership of the copyright, the employer should have written agreements with its independent contractors wherein the independent contractors assign the copyright in any works created by them to the employer.
Names, taglines and other short phrases are not protected by copyright law. They may be protected under trademark law if used in commerce to identify and distinguish the goods and services of one manufacturer or seller from the goods and services of another, and to indicate the source of the goods or services. Therefore, because trademark rights do not begin upon creation (as do rights in a copyright), the individual or business that uses the name, tagline or other short phrase has trademark rights in such items, and not the employee or independent contractor that created them. Interestingly, a design, symbol or combination of sounds can be protected under copyright law, but may also be protected under trademark law if they are used in such a manner as to distinguish one’s goods or services from those offered or sold by another.
Therefore, employers should make sure that employees understand that the employer owns the copyright rights in works such as computer software, advertisements, and manuals that the employee creates for his/her employer. In order to avoid misunderstandings, the employer may want to include such language in the employee handbook. As to independent contractors, employers must have a written agreement in place with independent contractors if the employer wants to own the intellectual property rights in and to the work created by the independent contractor. Without a written agreement in place, the independent contractor will own the rights to the work, even if the employer paid good money for creation of such work.