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Coping with copyright ownership

08 May 2008

We regularly advise on copyright ownership. Copyright issues are difficult. A challenge to copyright ownership can be needlessly complex and expensive for the businesses involved. A simple copyright agreement entered into as early as possible could save many hassles.

Because copyright arises in any original work – so long as it is not trivial and provided some skill and labour has gone into its creation – copyright can exist in normal business collateral such as photos, graphic material, website and promotional copy, software and even customer lists.

Many individuals and businesses grapple with the idea of copyright for several reasons. For example, the rights conferred arise automatically and they are limited in scope. Also, copyright does not extend to the idea of a work - copyright merely protects the expression of that idea.  It can be hard to get one’s head around these issues.

Add to this list some more issues about copyright ownership and many will raise their eyebrows and say “it is all too hard”.

But it doesn’t have to be hard if you understand some basic rules.

Let me explain the copyright ownership rules.

First the general rule is the original owner of copyright is the author (that’s the creator) of the copyright work. The creator can be a natural person or a company.

But there are two main exceptions to the general “author is owner” rule.

The next rule is where a literary, dramatic, musical or artistic work (including a product design) is made by an employee during their employment, the employer will be the first owner of any copyright that is created.

Then where a work has been commissioned, the person who commissions the copyright work will be the first owner of any copyright, provided (i) the commissioning arose before the work was created and (ii) the work was created in pursuance of the commission.

But here’s another exception - not all commissioned copyright works belong to the person who commissioned them.

The commissioning exception only applies to photographs, computer programs, paintings, drawings, diagrams, maps, charts, plans, engravings, models, sculptures, films, or sound records.  Quite illogically, works of architecture and literary works are not covered by this exception. 

The commissioning rule creates uncertainty because the rule only applies to certain copyright works.  The rule is inconsistent and causes the most difficulty when a person commissions someone to create a work that incorporates several copyright works.

For example, a business might commission a designer to create a promotional brochure. The brochure may include drawings and text. The person who commissions the drawings will own copyright in the drawings. The person who creates the text (the literary work) will own the copyright in the text, even if they were commissioned to do so. Clearly this is not satisfactory.

Another example could be developing computer software and an accompanying manual.  The party who commissions the creation of the computer software would own the copyright in the software but not the manual.

But, every exception mentioned will not apply if there is an agreement to the contrary. And this is the key.

Where one person engages another to make a copyright work, it is critical the parties consider who will own copyright in that work before the work is created. If they do not consider this issue at the outset there can be serious implications on how the parties can use the copyright work in the future. You need to ensure that you have all the rights you may want and need to make and deal with changes and derivatives of the work now and in the future.

The surest way to protect your rights is to enter an agreement. This avoids the issues that arise with the commissioning rule. It also makes it clear from the outset who owns copyright. The value of the copyright can then become one of the issues that influences the price paid for the work.

Corinne Blumsky
Partner, A J Park Wellington
corinne.blumsky@ajpark.com
DDI +64 4 498 3445

An edited version of this article was published in Her Magazine May 2008