Who owns work made by employees and freelancers

A business pays a freelancer for a set of illustrations. Months later, it wants another artist to turn them into packaging and animated advertisements. The business thinks it bought the illustrations outright. The freelancer thinks the price covered one campaign. Neither of them acted badly. They just never wrote down who owns what.

Owning the delivered file is not the same as owning the copyright. U.S. copyright belongs first to the author of the work, and it moves to someone else only through the work-made-for-hire rule or a transfer 1. Paying the invoice does neither.

Employees and independent creators are not interchangeable

A work is "made for hire" in only two situations 2:

1. An employee makes it within the scope of their job. The employer is then the author and the copyright owner from the start.
2. Someone specially orders or commissions it, and it fits one of nine categories: a contribution to a collective work, part of a motion picture or other audiovisual work, a translation, a supplementary work, a compilation, an instructional text, a test, answer material for a test, or an atlas. On top of that, both sides must sign a written agreement that expressly says the work is a work made for hire.

If a commissioned work misses any one of those conditions, it is not a work made for hire 2. "We paid for it" is not a third route. A logo, for example, is not on the list, so writing "work made for hire" into a logo contract does not make the client the author.

Calling someone a "freelancer" or an "employee" does not settle which side of the line they fall on either. Courts decide who is an employee under the general law of agency, looking at the real working relationship, and they judge the facts as they stood when the work was made 2.

When the work-made-for-hire rule does not apply, use an assignment: a written transfer of the copyright, signed by the freelancer. A transfer of copyright ownership is not valid without a signed writing 1. An exclusive license counts as a transfer and needs the same signed writing; a nonexclusive license does not 4. Put a nonexclusive license in writing anyway, so both sides can see what it covers.

The choice has a long tail. A freelancer who assigns copyright, or their heirs, can terminate that assignment in a five-year window that opens 35 years after it was signed (later for some publishing deals). That right does not exist for a work made for hire 1.

If you are an employee, your employer owns what you make within your job. You and your employer can agree otherwise, but only in a written instrument you both sign 1.

Talk about the uses people actually expect

Before the work starts, replace "Who owns everything?" with a list of real uses. Answer these together:

• Will the business print the artwork on products or packaging?
• Can it hire someone else to edit or adapt it, for example into an animated ad?
• Can the artist show the work in a portfolio?
• Does the client need to own the copyright, or would an exclusive or nonexclusive license for named uses be enough?
• Will the artist reuse a background technique, template or character elsewhere?

A freelancer can charge one price for a single campaign and another for a full transfer. A client often finds that a license naming every planned use gives it all the freedom it needs. Write the answers into the agreement and have both sides sign it before the first draft is delivered.

Existing material comes with its own history

A developer brings a library they wrote years ago. A designer uses licensed fonts and stock photographs. A contractor can transfer only what they own 1, so treat three things separately in the agreement:

1. New work made for this project. Assign it, or license it for the named uses.
2. The creator's earlier material. The creator keeps it and gives you a license to use it inside the deliverable.
3. Third-party material such as fonts, stock images and open-source code. It stays under its own license; get a list of each item and where its license lives.

For a website, that might mean the client owns the custom illustrations, has a license to the developer's reusable code, and uses stock photos under the stock site's terms. That is a workable result. Trouble starts when one broad sentence such as "the client owns the website" hides those differences and the client later promises a buyer or investor rights it never received.

Once a copyright assignment is signed, record it with the Copyright Office through its online Recordation System; the recordation page has the fee calculator 4. Register the work too: recording gives the public notice of the transfer only once the work is registered, and a transfer recorded that way within one month of signing beats a conflicting transfer the creator signs later 1.

Inventions need their own conversation

The copyright work-made-for-hire rule does not decide who owns an invention. A patent, or a patent application, is transferred by a written assignment 3. For applications filed before September 16, 2012, ownership starts with the named inventors; for applications filed on or after that date, the original applicant is presumed to be the owner 3. Being named as an inventor does not mean you still own the patent, and paying an engineer does not, on its own, transfer their invention to you.

So if you hire an engineer, designer or contractor who may invent something, include a signed assignment of inventions in the agreement. Once a patent assignment is signed, record it with the USPTO through Assignment Center within three months. An unrecorded assignment is void against a later buyer who paid for the same patent without knowing about it 3. If you are an employee with a side project, read your employment agreement for an invention-assignment clause before you build it.

If you and the other side already disagree about who owns delivered work, have a copyright or patent attorney read the contract and your messages before either of you sends a demand.

Before the next project starts, have the plain conversation: here is what each of us brings, here is what we are making together, and here is what each of us will do with it afterward. Then sign it.