Situations where potential venture capital investors are grilling start-up management always seems to bring the T.V. show “Shark Tank” to mind.
I don’t know how many times I watched as one of the “sharks” on that show told some poor business bait that money would be offered to invest based on a plan to market a license on an app program that showed great potential.
The shark sure sounds like he knows what he is talking about. Or does he.
Because we know that before licensing anything a startup manager needs to have procured a solid copyright.
He routinely works with clients on an independent contractor basis.
Mark decided to work on a particular client’s project without a written agreement or contract stating the terms of the association.
The client later refused to pay Mark for his work.
The client then began to freely use Mark’s work claiming (1) there was no written or verbal contract for services and no “course of dealing understanding” between them and (2) and that based on the lack of any formal agreement Mark retained no copyright ownership interest or rights in the work he contributed to the project.
Mark feels the client not only ripped off his creative input and artwork but he seems to have been able to misappropriate the copyright interest in his work. Mark has proof his client is using his artwork.
Creative agencies are increasingly shrinking the number of in-house or staff creatives and opting to rely on freelancers to perform a multitude of tasks from pitching ideas to sustaining an advertising campaign.
The sluggish economy has stressed many agencies causing those employers to suffer difficulties in covering the cost of maintaining staff employees.
It costs a lot these days to maintain a regular employee on staff (payroll taxes, healthcare, insurance, etc.).
Outsourcing of Freelance Work on the Rise
Some employers hoping to pinch a few nickels have turned to hiring freelancers and specifically designating them workers under agreement or “independent contractors” to function as part-time, intermittent and offsite workers that in truth provide the majority of the agency’s day to day creative needs.
Unfortunately, these employers wrongly conclude that simply claiming an employee is an independent contractor even if he is supplying regular, ongoing and predictable company tasks will relieve an employer of his responsibilities to State and federal taxation authorities.
It will not, and worse, this action could be considered intentional tax fraud.
If they could only see and hear the state and federal agency tax-collecting accountants slowly pursing their lemon-sucking lips into a shape that only slightly resembles a smile. “Penny wise and pound foolish,” they’d sneer in response, “Do these people think we were born yesterday on what? Audit that company.”
Copyright Ownership & Transfer, Employees and Independent Contractors
The three most common Intellectual Property (IP) themed lawsuits are likely those that center on independent contractor/employee issues, copyright ownership issues and the hijacking of a unique and moneymaking idea.
The issues that create these types of lawsuits tend to crop up again and again for the simple reason that the law protecting the rights of the players is not always intuitive for most people with the result that costly and inadvertent mistakes can easily be made.
The first important legal mine field to know more about is the one that pits the rights of a creative or freelancer against those of an employer.
Part I. Independent Contractor IP Rights v. Employee
Just for a moment pretend that you created this really innovative business and you hired your neighbor’s kid do the programming work for your website.
Part of being a professional creative is protecting your brand – for most of us, this means slapping a copyright notice on the bottom our manuscript pages or stamping a watermark over images we post online.
After all, copyright is implicit in your work from the moment you’ve put pen to paper or raised the viewfinder to your eye.
But putting a copyright symbol on your work doesn’t do a great deal in terms of providing actual protection for your work or your brand – it’s a bit like pushing the lock button on an older car without an alarm system, it’ll keep the honest thieves out but anyone who really wants to steal the car that day is going to pop the lock and drive away with it.
So what can you do about it?
Start by Marking Your Turf
Adding a copyright notice, embedding a watermark and including author information in a digital file are all adequate means of establishing the fact that YOU created something and YOU intend on keeping control over it.
None of these are going to stop a determined copyright violator, especially in a world where the internet encourages the sharing and free exchange of ideas.