Tips for Business Owners: Understand How Work Made for Hire Impacts Your Intellectual Property

Understanding and maximizing your company’s intellectual property (IP) assets, which include trademarks, copyrights, patents, and trade secrets, is crucial as you operate and expand your business.

This knowledge will help you identify and pursue remedies if someone uses your IP assets without authorization. Your IP assets can also help establish the value of your company when taking out a loan, partnering with another company, or selling your business.

Conduct an audit to determine what intellectual property your company owns, such as:

  • Trademarks and service marks (also known as logos and brands);
  • Original written works, graphics, videos, photography, and software;
  • Websites and domain names;
  • Proprietary and confidential information; and
  • Inventions and inventive ways your company does business.

Then you should check to see who owns each item and if there are trademark, copyright, or patent registrations that list your company as the owner. As you develop the list of IP assets, you should know that you may believe you own the copyright to certain works even though you really don’t – because of the often-misunderstood “work made for hire”.

What Is “Work Made for Hire”?

“Work made for hire” is defined in the U.S. Copyright Act as:

  1. Work prepared by an employee within the scope of his or her employment; or
  2. Work ordered or commissioned as a contribution to a collective work, part of a movie or video, a translation, a supplementary work, an instructional text, a test, or an atlas, if the parties expressly agree in writing that the work will be a work for hire.

In these two cases, the employer or commissioning party owns the copyright of a work made for hire. Now consider what is not included in the “work made for hire” definition.

Check the contracts you signed with independent contractors, such as writers, artists, photographers, and musicians. Often their contracts state that they retain the copyright to any work they create for your company.

So, the following items may not be owned by your company:

  • photographs,
  • copywriting,
  • music,
  • websites,
  • graphics (including logos)
  • and so, so much more.

How to Ensure Your Company Owns the Copyright for Commissioned Work

Read through the contracts for independent contractors you hire to create graphics, music, photographs, websites, and text. Make sure the contracts state “work made for hire” and that the copyright is owned by your company.

If the independent contractor does not have a written agreement, make sure you get one in writing. It should specify that your company will own the copyright to all drafts and the final work.

As you create your inventory of IP assets, what do you do if you discover that you do not own the copyright to certain works? For example, many companies do not own their website content, including copy, photographs, and graphics.

Once you recognize the problem, you can take steps to gain ownership over the items with assignments and new contracts. Seek the assistance of an experienced intellectual property attorney to make sure the assignments and new contracts are done correctly.