One common misconception affecting English companies is the nature and ownership of copyright. It is commonplace in today’s market place for businesses to commission work to third parties, whether it be for the design of a logo, software, website or even photographs, and to part with considerable sums of money in the process. While such activities are commonplace, companies fall short of their expectations when the issue of which party owns the copyright is raised.
The brutal truth is that many contracts for commissioned works are silent on copyright and in the absence of a contract specifying the contrary, the copyright of a commissioned work will remain with the author of the work and not the company.
There are exceptions, for example in the event that the work is derived from pre-existing work belonging to the company or when the author works in a team with the company or its employees.
However in most cases, in the absence of an agreement to the contrary, a company will find it difficult to convince a court that it should retain the copyright of a commissioned work. In such a case, the company will only retain a license (conferred by the author of the work) for use to the extent intended at the time when the company commissioned the work. For example, a company would not be able to sell software which was originally commissioned and designed for internal employee use. The author would also be able to derive a commercial benefit from the work, in conjunction with its use by the company, and even in the event that it was in direct competition with the company.
While this situation is certainly undesirable for any company, the measures needed to be taken to prevent this are fairly straightforward. Before commissioning any work, the company should ensure that a term conferring ownership of the copyright to themselves is agreed first. If a contract is not desirable in certain cases, a correspondence trail by email or letter to the same effect will usually be sufficient.
It is important to note that the above will only be true in cases of commissioned works by third parties. In the case of works created by employees, the company will as a general rule retain copyright of that work.
