Imagine you hire a freelance designer in Texas to create original illustrations and website graphics. You pay the final invoice and expect complete control over the work. However, the contractor generally owns the copyright initially unless the work qualifies as a work made for hire or the contractor transfers ownership. These federal ownership rules generally apply nationwide, including in Texas.
When can commissioned work belong to your business?
Work created by an employee within the scope of the job generally belongs to the employer. In contrast, contractor-created work can qualify as a work made for hire only if both parties expressly agree in a signed writing and the project falls within one of nine categories: a contribution to a collective work, part of an audiovisual work, supplementary work, instructional text, translation, compilation, test, answer material for a test or atlas.
When a project does not qualify, the contractor can transfer copyright ownership through a written assignment. Payment or delivery of the final files does not, by itself, transfer the copyright. In some cases, the parties’ conduct may create an implied license to use the work for its intended purpose. That permission does not transfer ownership or necessarily permit other uses.
What should your contractor agreement address?
You should discuss ownership before the project starts. Depending on the arrangement, the contract may address:
- A written assignment of copyright interests to your company
- Licensing terms if the contractor retains ownership
- A clear description of each commissioned deliverable
- The timing of any copyright assignment, such as after final payment
- Delivery of editable or source files
- Permission for the contractor to display the work in a portfolio
Clear terms can identify whether you may use, modify, license or sell the completed work. They can also help both sides avoid conflicting expectations after delivery.
Check the rights behind existing assets
Older projects can also create ownership questions. Before selling your business, licensing its content or reusing contractor-created materials, identify who created each asset and what your records permit. Finding a gap early gives you time to clarify your rights before a transaction depends on them.