A shift has occurred in the U.S. workforce over the past two decades, and freelancers know all about it.
Today, nearly 53 million Americans are freelancers.
Experts predict that by the year 2020, the growth of the freelancer segment will even begin outpacing full-timers.
This means that just as our world is rapidly changing, so too is our job market taking on an entirely different mode of operation and expression.
It also means more and more ongoing interaction between full-timers and freelancers as companies begin outsourcing projects on a regular basis. This is where intellectual property issues arise.
Receiving work from a freelancer may seem like an excellent way to save time and effort, but without the right know-how, doing so could land you and your company in a heap of copyright trouble.
Reason #1: You Can’t Control What You Do Not Own
Think about it this way.
The worst thing that could possibly happen is that you hire a freelancer without receiving copyright and IP ownership.
Now you have the work in your possession, but you neither own nor control that work – nor does your employer, if you have one. All of it could mean disaster.
Copyright law states that ownership remains with the creator of an original piece of work. This means that work done by freelancers remains legally theirs in terms of ownership.
If you should choose to use, publish, alter, distribute or copy the work, its important to keep in mind you may be infringing on the freelancer’s rights to the work. That’s why you can’t control what you do not own.
So how does an outsourcer gain ownership of work received from a freelancer? The answer to that question is straightforward. The easiest way to receive ownership is in writing through a copyright transfer.
A Note on Work-For-Hire Agreements
Even though the freelancer is the original owner of work he or she creates, a copyright transfer can convey these rights, in total or in part, to the hiring company. Once the transfer is complete, the company can then manage the work according to the terms of the agreement.
The work received from a freelancer could fall into a special category, however, that represents an exception to the general rules in copyright law.
The general rule is that the original author of a work with at least a modicum of creativity is the exclusive owner of the work. However, in the instance of a work-for-hire, a written agreement transfers the rights to the hiring party under certain conditions.
With work-for-hire arrangements while the author of the work is the freelancer who is also the original copyright holder, the actual owner is the client or the employer. This work-for-hire exception applies only under certain circumstances such as work done under the scope of employment or work hired as a contribution to a collection of works.
Types of Rights Transferred
The type of rights transferred could depend heavily on the industry involved and vary accordingly. A graphics design transfer could be vastly different from a photography transfer. Many magazines expect to receive First North American Serial Rights – the right to print an article first in North America. After the first printing the right reverts back to the freelancer.
Reprint rights and one-time rights could also be established through written transfer agreements. Reprint rights allow an employer to print the first publication and continue reprinting for a designated duration of time. One-time rights allow an employer to print a work only once.
Say, for example, you just purchased a logo from a highly skilled freelance graphic designer – but you did so without first transferring his copyright and ownership right to the logo. This means that if you wanted to place your logo on your website or festival banner or brochures, you’d need permission, and possibly even a license, first before doing so.
Without it, the freelancer could have a claim of copyright infringement against you.
Reason #2: You Can’t (Legally) Make Money Off What You Do Not Own
A theft by any other name is still a theft.
That couldn’t be any more true than with copyright infringement.
When a freelancer does the work, that freelancer owns the work until he or she transfers the ownership right.
If a client decides to use or publish the work in any way after that without receiving copyright and IP ownership, plain and simple, it’s stealing.
Copyright infringement is serious business. For freelancers who can prove willful infringement, the damage award can be up to $150,000 for infringers on top of actual damages and profits in some instances. This can be a pretty steep price to pay for the outsourced work of a freelancer.
Reason #3: It Pays to Care (At Least Your Employer Thinks So)
Garreta used under CC BY-NC 2.0
As an employee hiring a freelancer for your company the urge to let a bit of apathy set in is tempting.
You know your employer can be held vicariously liable for any mistakes you make, and the responsibility would fall to your company to defend itself in a copyright infringement lawsuit.
That’s just the point. A nonchalant attitude about work received from a freelancer and the necessary copyright and ownership transfer that must and should take place, could backfire.
The repercussions are intense, and an employee could easily suffer a devastating career blow over the resultant losses suffered by the company.
That’s why the better attitude to have is one of diligence and precaution. If your company does not already have copyright transfer agreements in place for freelancer situations, it may be time to approach your supervisor about doing some homework.
Additionally, identifying quick and easy online methods for copyright transfer could make the process convenient and hassle-free for all involved. A copyright and IP ownership transfer is crucial in establishing a hiring company’s rights and avoiding liability.
Transferring Ownership Rights From a Freelancer to Your Company
Often, disputes about freelancer ownership arise after a job has been completed and the freelancer demands his or her work back. Or, a freelancer may continue using the work he or she has created to the utter chagrin of the hiring company. In these instances, the transfer of copyright was obviously not clear enough to prevent detrimental skirmishes.
To be clear, a transfer of copyright and IP ownership must be established from the outset of a project and should be in writing. Some company workers see this step as a particular inconvenience and make the mistake of overlooking its importance, but the more copyright-friendly approach is to take a transfer very seriously.
The agreement need not be elaborate, but it should be enough to clearly define the terms of the ownership transfer and to designate which rights will remain with the freelancer and which rights will remain with the hiring company after the ownership transfers.
One last thing, keep in mind that copyright ownership is only truly legally protectable when the work is registered with the U.S. Copyright Office. This means that even if a freelancer is entitled to the work he or she does, technically, they may have a difficult time persuading a court to protect the work and uphold its copyright if it is unregistered.
Proceeding with Diligence and Caution with Freelancers
The main point here is that the most effective way to receive work from a freelancer is to transfer copyright and IP ownership first and get it in writing. As with other transfers of property, verbal or handshake agreements are less likely to be upheld in court.
Taking a proactive approach by researching the best way to transfer copyright ownership in a freelance project situation is likely the wisest way to ensure the job goes smoothly for all involved.
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About the Author: Veena Veana is currently a legal document specialist, freelance writer, poet and community activist residing in west Texas. She earned her JD from Chicago-Kent College of Law, specializing in Intellectual Property, and holds a degree in Microbiology from the University of Texas at Austin.