This page will discuss some of the issues involved in hiring independent contractors, such as who will own the intellectual property, should an agreement be entered into with the independent contractor, and what terms should be included in the written agreement. Many of our clients have the need to hire independent contractors and this discussion will serve as general guidance. These contractors may be creating artwork for a trademark logo or for other business purposes, computer programs, written work etc. If you have decided to prepare an agreement, it is recommended to have the independent contractor sign the agreement prior to the commencement of the subject work.
Regarding copyright protection, the general rule is that the author who created the work is the owner. However, there are two primary exceptions. The first scenario involves an employer and an employee. If an employer requests that the employee create the work during the course of employment, then the employer will own the work, assuming the party creating the work meets the legal definition of an "employee". See our webpage entitled, Copyright Basics And Works Made For Hire, for the legal criteria for analyzing whether a party is considered an "employee" under the law.
The second situation involves one party hiring an independent contractor and specially ordering or commissioning the work, the parties agreeing in a signed document that the work is "made for hire" prior to the commencement of project, and the subject work being classified in one of the nine statutory categories designated under the Copyright Act. See our web page entitled, Copyright Basics And Works Made For Hire for a list of the nine categories. If you are not certain that the work will fall into one of these nine categories, then as the hiring party, you should have the independent contractor assign the copyrights and other proprietary rights to you in a signed document.
It is prudent to have a written agreement with an independent contractor. This agreement should include a clear statement that both parties agree that the relationship is one of an independent contractor relationship. If you believe the work will be "made for hire", as stated above, this language should be included or in the alternative there should be an assignment from the independent contractor to the hiring party of all rights, title and interest to any intellectual property resulting from the work created or the services performed.
In addition, the agreement should delineate the nature of the services that will be performed by the independent contractor and the term of the agreement (the amount of time required for completion of the project). Terms for payment should be detailed along with any points of reference for when a payment may be due based on certain amounts of work completed by the contractor. A confidentiality clause can be included or a separate non-disclosure agreement can be entered into if the circumstances warrant those types of assurances.
If the independent contractor requires a permit or license from the state, the contract should include an assurance from the contractor that he possesses the license. If the contractor is creating artwork, electronic files or written content, a clause should be included that warrants that the work produced and provided to the hiring party does not infringe on the proprietary rights of any third parties to the best of the contractor's knowledge. If the independent contractor agrees or if the hiring party has leverage an indemnification clause may also be included should there be a breach of this warranty. The parties may want to include a termination clause and the conditions upon which each party may terminate the agreement. Lastly, if there is a dispute between the hiring party and the independent contractor, the agreement should state the conditions upon which a dispute will be resolved. If you are considering hiring an independent contractor and need assistance preparing an agreement, please feel free to contact our office for a courtesy consultation.