Design-related legal, copyright, trademark, or intellectual property rights confusion? NoD guest author and legal expert Jean S. Perwin is taking questions. If you have questions for Jean, email them to us using editor (at) notesondesign.net. Jean will reply to questions frequently here under the “Intellectual Property” category of NoD.
Thomas says:
I am a freelance graphic designer. Over the course of 5 years, I conceptualized and designed all the branding, corporate identity, website design and illustration work for COMPANY A – at a reduced hourly rate. It was a small startup company with a website product, and I had a somewhat personal relationship with the owner.
Now, there was money exchanged for design services, with this set hourly rate paid for the work. There was also – however – a COMPANY A promise of a lot of future work once the COMPANY A product was sold.
No agreement was ever signed, and ownership of the copyright was never discussed. There was an inherent promise to compensate us once the product was acquired, but that has not materialized.
COMPANY A was recently acquired by a major Magazine, which will bundle the COMPANY A product into their features on their website.So basically the product was sold, but i’ve been cut out of any profit or promise of continuing work. The Magazine’s creative director is now requesting original art files from us as well, so they can take over the maintenance and further marketing of the product.
My questions are as follows:
1. From what I have read and researched, COMPANY A never really held the copyright for all of this creative work. would that be the case in this scenario?
2. The COMPANY A product was sold in it’s entirety to this Magazine. would they have gotten assurances from COMPANY A that it did indeed have full rights to the copyright ownership?
3. I would like to approach COMPANY A and ask them for compensation for the rights to that ownership. I really just want to obtain a fair settlement that might be based on retroactively paying me my full rate for all the hours I had put into the past work. not sure how to do the calculation…
Thanks you very much for any help and guidance with this matter.
- Thomas
Hello Thomas,
If there is no agreement in writing to transfer the rights, you still own the copyright to everything you created. If Company A warranted to their purchaser that they owned the rights, they will be liable to them for whatever amounts they have to pay you to transfer the rights. The full buyout price should probably be at least the difference between your reduced rate and the full rate for the work. I would explain to the magazine that you are happy to turn over the files to them for a buyout price to be determined based on the representations that were made to you by Company A. And explain what those were. And do everything in writing. If you speak on the phone, send a confirming email.
- Jean
This is excellent advice. Companies often assume they automatically own copyright to contract work, when they often don’t. The creator of the work does.
I have been in the same situation. I am not a lawyer, but I would like to address some of the other comments so that there is no confusion. If a client pays you for the work then it is a work-for-hire and they technically own the artwork/copyright. Which means that you must relinquish any source files to them or someone that is requesting it on their behalf. However, as Jean mentioned above, since Thomas was never paid (in full) then he still owns the copyright and does not have to hand over the source files until proper/fair compensation is received.
I’m afraid that Randall is going to create more confusion with his post. If a client pays you for work, it is NOT work for hire unless there’s an agreement IN WRITING that makes it work for hire. Simply paying for work does not make it work for hire. The only rights acquired are the right to use it for the purpose it was created. The creator retains the rights and does not have to turn over source files unless they agreed to or unless they get paid for them. Designers need to make it clear at the beginning to clients that they will not have access to digital files unless the pay for them. Many clients (and apparently some designers, too) believe what Randall says–that if they pay for it they own it. Legally, they don’t.
All true and good information.
Unfortunately, in all my years, I’ve rarely come across a client who didn’t require right up front that all the copyrights would be transferred to them. And the few who don’t, become outraged and cry deceptive practices when they find out. It’s in my contract, but if I mention it or the client reads it, they simply won’t agree to my retaining the copyright, since almost anywhere else they go, they would get the copyrights. And I hate to admit it, but for the most part, that’s true.
It’s a vexing problem, but it’s a compromise between getting any work and getting paid what you’re worth. Especially as a new designer. I imagine the big guns can get away with it (and I mean really big), but it’s a bit of a mess at this level.
I don’t have a problem with designers transferring copyright rights to clients as long as they get paid for them. One way to educate clients about your rights is to offer two prices for the work–one for limited rights and one for full buyout. If you begin the discussion about the use of the work and whether the client would need all the rights before an agreement is signed instead of it becoming an issue later, it helps. If you are going to transfer all the rights, the price for the work should be higher. Cyd may be right that as a practical matter it’s hard to do, but the more educated clients are, the more designers will get paid what they’re worth.
Tricky-However I was on the other side. The developer went out of business and I was left with no site. When I finally found them they told me that to get the site sent to another developer I was going to need to dish up $4,750.00. Four years worth of information and a brand were lost in a day.
They said they owned it and basically I was SOL.
Thanks for this information Jean. I just stumbled upon this page after searching on google about a similar copyright issue I had with a startup I did some development work for.
When doing a large amount of freelance work for a company, I’ve always had to sign an agreement transferring copyright. Now I understand why they insist on this. Good article.
In short, you own the copyright. This is not a “work for hire” situation. Infact, from my own research, even if you state that you are doing work in a “work for hire” contract, if it doesn’t fall into the limited 9 catagories of “work for hire” by the law then it still is not considered “work for hire.”
You can read more here:
http://en.wikipedia.org/wiki/Work_for_hire
I would recommend the suggestion above about approaching the Magazine with a buyout price, if they drop your work and create their own, then I would ask COMPANY A to reimburse you for your time and work (perhaps in small claims or civil court.
Make sure you retain all your records, emails, etc, and continue adding a paper trail of evidence. You will need that. I prefer communicating through email vs phone so that I have a record of agreements.
http://en.wikipedia.org/wiki/Copyright
I have developed a corporate signature (video of their logo attached to the end of each commercial) for a huge corporation (fast moving consumer goods) which now would like to fully buy it out before doing market testing of it. They made me a offer of 1.000 Euros which I declined and then they insisted that I come up with a price for a complete buyout (a.Europe and b.worldwide). Could someone please help me with this as I don’t know how to start?
I am also a freelance graphic designer. I have a client that wants to purchase the documents once I have designed them. So we have agreed up on a one time fee for them to own the rights to the documents. I will hand over all files. Does anyone know where I can get a form/contract outlining this? Also, I like the idea of raising my hourly rate if for this client if I am turning over the rights.
So basically I am asking for help finding the right contract form to use. Help.
If you make your living selling your work, no matter what the content is, you owe it to yourself and your future to understand the laws that surround your craft.
Even though writers are paid for their work, they own the copyright in it and can do with it what they please. This includes reselling the work to others, stopping infringement and so forth.
Hi Jean,
Please help!
I am an Illustrator and have done a design for a t-shirt print for a client. I quoted on this for amount A and amount B. A being for the design, where I retain all the rights, and B where they can use this illustration for t-shirts only but as many times as they want. (I stupidly called this option a buy-out on the quote…:() They chose option B
They now claim : the client “…has the exclusive right to exploit the artworks in any and all manner, and media, without no limitation.” And this is making me worry big time.
I do not want the client to use the artwork for any other purposes other than what it was designed for, also cutting up the image and using different parts of it, especially when not being compensated for it, and definitely do not want to be exploited in any way. Also would like to retain that I alone make changes or apply this image for different applications.
We are in the final stages of delivering the final artwork, and sending the invoice etc. (have received a 50% deposit)
But just want to make sure what my rights actually are regarding the illustration, and if I could word it in some way as to explain, I allow them to use it for the t-shirt design, and if they want to use it for any other purpose I want compensation for that.
Please help me ! Any advice would be greatly appreciated.
Kindest Regards,
J