Why Copyright Assignments Can Be Critical for Your Company

As discussed in my last post Copyright Rights, a copyright isn’t a single right – it’s a bundle of rights.  And a copyright owner can transfer some or all of the rights.

A full transfer of rights is called a copyright assignment.

For startups, it’s important to get full copyright assignments for logo designs, website designs, and other works including software written by independent contractors.

Why should a company care about copyright assignments?

Generally, if you don’t have a written, signed, full transfer of rights to the work from the original copyright owner, which is usually the author, you don’t own the copyright.

It’s like when you buy a book.  You own a copy of the book but you don’t own the copyright to the book.  The original author (or publisher by written assignment) retains ownership of the copyright.  You can read the book you purchased but you can’t copy and sell copies of the book, make a new work based on the book (a derivative work), or publicly perform or display the book without permission of the copyright owner.

When you are paying for the creation of copyrighted work for your business, you usually want to own all of the rights.

And pursuant to Section 204 of the Copyright Act, if you don’t have a written copyright assignment signed by the owner of the copyright or its agent, you don’t own the copyright.

You may just have rights to a single copy.  This is important because you won’t be able to register the copyright to your logo or website to get statutory protection and you may be guilty of copyright infringement when you modify the original work.

A copyright assignment may be critical for your business.

For example, if you don’t have a written copyright assignment for the software being written by an independent contractor for your startup, you don’t own the copyright.  It seems so wrong but it’s true.  The developer can resell and use the code and try to stop you from using it.  You may pay hundreds of thousands of dollars for the creation of software that you don’t have a clear right to use.

This was the fact situation for the first copyright trial I worked on as an IP attorney.  The alleged independent contractor sued our client for copyright infringement after it had paid an enormous amount of money for the creation of the custom software at issue.  Our client won an implied, temporary license to use the software but only after a very expensive legal battle and trial.

The battle and expense could have been avoided with an upfront, simple, written contract with the alleged independent contractor that assigned the copyrights to the company.

It’s important for startups to think about copyright assignments at the beginning of a project before they pay designers and independent developers.

And software startups need to be aware of ownership issues if they plan on reusing code in future projects for other companies and they hire independent developers to write code.

It’s cheaper and easier to hammer out these IP ownership issues in contracts in the very beginning of your relationships and projects.

And I know that copyright rights can get crazy complicated when you work with multiple software developers who want to use old code and open source.  That will be the subject of later posts.  This post is just the beginning of the conversation to help startups see the relevance of copyright assignments to their business success.