Biz Ladies: Designing for Hire — Who Owns Your Designs?

Today’s Biz Ladies post is Part 2 of a three-part series from Ben Pollock, owner and founder of The Juniper Law Firm. Last week, Ben graciously offered his expertise on working with and developing contracts, and today he is sharing some useful advice on how to manage the rights to your work and services. Thank you, Ben, for another great post in this legal series! — Stephanie

Read the full post after the jump . . .

One of the great benefits of being successful as a designer (or any kind of artist, really) is that others will pay you (hopefully) good money to design for them. You may be hired as a full-time employee or as an independent contractor on a job-to-job basis.

At first, you may be excited and flattered that others appreciate your work so much. But after sending that design into the person or company that hired you and spotting it being used in places and in ways that you didn’t expect, you may begin to think you weren’t paid enough or that you didn’t insist on enough controls to your design’s use. But what can you do about it? You sold the design. They own it now, and they can do whatever they want with it. Lesson learned. Try to do better next time, right?

Well, not necessarily. Just because you sell your services as a designer doesn’t necessarily mean you have sold your actual design. Let’s consider the two situations I mentioned above as applied to a friendly letterpress printer:

1. Designing as an employee:

According to the copyright act, “In the case of [an employee preparing a work within the scope of his or her employment], the employer or other person for whom the work was prepared [owns the copyright].” This is called “works made for hire.” The only exception to this is if the employer and the employee have a signed agreement to the contrary.

Translation: If a letterpress printer is hired by a company as an employee to design and print custom letterpress wedding invitations for the company’s clients, that designer/printer does not own the designs. The company, as the designer/printer’s employer, owns the designs. This is always the case, unless the company has a written agreement with the employee saying otherwise.

2. Designing as an independent contractor:

First of all, I must warn you that the determination of whether someone is an employee or an independent contractor is often very convoluted. And even when everyone intended an independent contractor relationship, it can still end up that the so-called “independent contractor” will be deemed an employee by the courts. This is what I like to call the “accidental employee.” But assuming it has been determined that you are an independent contractor, who owns your commissioned work?

Well, the general rule is that independent contractors own the rights to their work, even though they are creating it for someone else. This is why it is so very important to distinguish between employees (who don’t own their work) and independent contractors (who do own their work).

Take our letterpress printer as an example again, but instead of working as an employee of another company, the printer decides to go out on her own. And she markets her company as being able to design and print custom letterpress wedding invitations. In this case, when a client hires the printer to design and print invitations, the printer is not acting as an employee of the client, so she owns the designs she created and can prevent others from copying them or using them without her permission. She sold the physical invitations she printed the design on — and the client can do whatever she wants with them — but neither the client nor anyone else can print more invitations or otherwise use the same design.

As I mentioned, distinguishing between an employee and an independent contractor can be difficult. But here are a few key factors that go into the analysis:

  • Independent contractors generally have more freedom about when, where and how their work is done, whereas employees are kept on a tighter leash.
  • An employee’s relationship is generally indefinite, whereas an independent contractor is usually hired for a specific amount of time or for a specific project.
  • Payment on an hourly, weekly or other regular basis can indicate an employee relationship, whereas independent contractors are usually paid on a job-to-job basis, even if the ultimate bill is based on hours worked.
  • Employees are usually supplied with the tools and material for completing a project, whereas independent contractors are usually responsible for working all that out on their own.
  • Employees are generally required to only work for their employer, or at the very least to not work for competitors, whereas independent contractors can work for anyone.
  • Employees are often required to work on the employer’s premises, whereas independent contractors may work wherever they want.

 

Not one of these factors is enough. And there are many more factors that go into the analysis, some of which may or may not satisfy whether the designer is an employee or an independent contractor. But these are some common factors that assist in making the distinction between employees and independent contractors.

Bottom line: Employees don’t own their work, but everyone else does. But (and this is important) there are many exceptions to both these general rules, too many to go into here. So with all the exceptions and the sometimes-difficult distinction between an employee and an independent contractor, here is what I recommend: If you are ever in doubt, find a friendly attorney who can give you some advice.

DISCLAIMER

Please, please, please remember that the rules I laid out above are very general in nature and are intended only to give you a basic background on these issues. This is not actual legal advice for your situation. If you would like advice that fits your situation, please contact your local friendly attorney. You can find me at www.juniperlawfirm.com.

Ben @ Juniper Law

Hey Ashley. Yes, a W-2 would imply that you are an employee, and a 1099 would imply an independent contractor relationship. But, these should not be used as a definitive indicator because, as I mentioned in the post, just because “everyone intended an independent contractor relationship, it can still end up that the so-called “independent contractor” will be deemed an employee by the courts.” This is sometimes called “substance over form” – meaning that it doesn’t matter what you call it, it only matters what it actually is. Bottom line: this is just one more factor to add to the list above – it is not determinative, but it can be an indication. If you have doubts about your status (or an employee’s of yours) feel free to contact me or another attorney dealing with these issues who can give you legal advice for your situation.

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