Copyrights in a business can be one of the most lucrative intellectual properties for future investment. Especially for a company that deals in creative properties, copyrights are going to have to be filed for legal protection. But how do you determine who exactly owns a copyright? Does a business automatically own it if there was a collaborative process behind the creation of something? You have to scope these things out and be on the lookout when you hire a freelancer to come in and create something for your company.
When Can an Entire Company Own a Copyright?
You and everyone on the payroll of a sole proprietorship are going to be the collective owners of a copyright, according to Digital Media Law Project. Keep in mind any sort of media created in your business (like books, recordings, or unique programming code) is going to be automatically copyrighted upon creation. You get deeper protection if you file those copyrights with the U.S. Copyright Office.
When you have a partnership in your company, the same copyright laws apply as with a sole proprietorship. The only differences would be if a legal case came up and there was nothing in writing about who exactly owns the property. In those scenarios, a partnership business should draw up a contract in determining who owns what, particularly if someone in the partnership did the creative work and the others didn’t.
Bringing Outsiders into the Fray with Larger Companies
When it comes to LLC’s and corporations, you have corporate members and shareholders who might or might not be able to share in a copyright. Members of an LLC aren’t always on the payroll of the company, so the definition of whether he or she is an employee is going to be up for debate. They can certainly join in copyright ownership if they start getting paid as a regular employee.
For corporations, shareholders are a different story. They’re basically the co-owners in the corporation, so they’re more than entitled to sharing the copyright ownership.
Non-profit organizations are a little easier to figure out. Those heading the top board positions (and who get paid) will be the official owners of all copyrights.
When Freelancers Enter the Picture
Sometimes a company has to hire a creative freelancer to create something the company’s employees can’t do on their own. This could be for designing an app or creating a particular media work. When hiring a freelancer, you’ll have to write up a contract that it’s only work for hire and that they won’t own the copyright. If you don’t do this, the freelancer could take credit for the copyright due to his own time creating the work.
The above is the one thing that can create messy litigation for businesses on claiming copyrights. However, written contracts have to be the name of the game when it comes to deciding who owns intellectual properties. Definitive contractual decisions made in the early days of your business will help you later when many of your valuable copyrights could start becoming lucrative to their respective owners.