If you’ve read our previous blog post: “Are you protecting your most valuable asset? Why securing your intellectual property matters,” you’ll be familiar with the Canadian Government’s Intellectual Property Strategy. How does this strategy apply in the gig economy where it’s more common for freelancers and contractors to work for a company on a specific project and then move on to something new or, to work for several companies at once? Let’s take a closer look at who owns intellectual property (IP) with the help of the scenario below.
Understanding copyright and Intellectual Property (IP) ownership
You’ve hired a freelance creative web designer to build an eye-catching website for your business. You are very excited that they also created a fun web application to gamify the explanation of your company’s unique niche in the market.
Who owns the website content? Who owns the app?
Unless specified in an agreement, the contractor most likely owns both. What if the contractor used a template for a website they created while employed by someone else? What if they used an application created for another client that now includes your branding? Wouldn’t it be shocking to find yourself facing litigation over copyrighted content on your website?
Copyright law applies to IP such as written content, music, drama, graphics, movies, and drawings. IP can also refer to assets like algorithms, software, formulas, and processes. Some businesses may not know that generally these works, unless created by an employee on the company payroll, are owned by the creator. Similarly, employees may not be aware that their employers own the IP for anything they create during work hours, while using company resources or any work related to what the employer pays them to do. What might be more surprising is that an employer may also own copyright of works created by employees outside of business hours.
While it’s in the best interest of contractors and freelancers to clarify IP ownership when entering into a contract, it is also important for the business owner. To protect yourself, a clause in the contract or agreement might require the contractor to use only original IP in their work for your company. Another clause may stipulate that any work created on behalf of your company belongs to your company. Additionally, as an employer, to protect your creative employees, you may want to look at including a clause in their employment agreement that allows them to do side jobs on their own time.
Ultimately, as a business owner, whether an employer or contractor, it’s your responsibility to know the law. If you need help interpreting it, consult your Innovation Guelph mentor or industry expert. They will connect you with the right resources which may include an intellectual property lawyer.