Copyrights and Small Business: Taking Control of Your Intellectual Property

If you’re an entrepreneur or small business owner, it’s likely you have more intellectual property assets than you’re even aware of. But are you claiming your rights to these materials—and possibly leveraging them to benefit your business—or are you allowing those rights to be usurped by others?

First: A Note On Copyrights

According to copyright law, under normal circumstances, an individual owns the rights to anything he or she creates, as long as it’s copyrightable—pictures, prose, photographs, video, and the like—automatically, no copyright registration required.

Also according to copyright law, employers own the copyright to their employees’ work, provided that work is done during the scope of employment. For example, all of the website copy I’ve written for my employer is their intellectual property, not mine.

But independent contractors (“freelancers”) are not employees, and many small business owners are unclear which party owns the rights to website copy or design, sales brochures, and even photographs for staff biographies.

Let’s look at a few ways your business can manage its intellectual property—and maybe even use those assets to make a little extra profit.

A Work For Hire Agreement Establishes Ownership Before Work Has Begun

If you hire a freelance writer to blog for you, a photographer to take pictures of your products, or a designer to give you a homepage or logo, it’s imperative that you understand the work for hire agreement.

Signed by both parties before work has begun, the work for hire agreement establishes that your business owns the commissioned work, not the independent contractor you hired to create it.

The importance of this is obvious. If you hire an artist to create a logo for your business, it makes no business sense at all for the artist to own the logo. Similarly, it’s not very efficient for your business if you need permission from your photographer every time you want to print a new sales brochure featuring one of her photographs—especially if you’re the subject of the photo!

A Copyright License Agreement Lets an Owner Grant Conditional Rights to Use the Material

While there are many situations in which it makes sense to own your intellectual property outright—website copy, company logos, product images—there are plenty of situations where this added expense might not be necessary and a license would be quite sufficient.

A copyright license agreement allows the copyright holder to specify exactly how, how much of, and for what cost his intellectual property can be used—while still remaining the copyright owner.

Can’t see a use for a license agreement? In fact, it’s probable that your business has entered into many license agreements, most likely with software companies. As a small business, you don’t require ownership of these programs—just a conditional use (that you will refrain from distributing free copies, use the software in its entirety, pay appropriate licensing fees, and so on).

And copyright license agreements are two-sided. Your business could even be on the other end of a licensing agreement, provided you have a strong sense of your own intellectual property. For example, if your business has created great content over the years, you might publish that content as an e-book and license it to other companies—or even allow other businesses to license your services from you for their own customers under their own brand.

Creative Commons Licenses Are License Agreements Anyone Can Use

Another interesting way businesses can leverage their intellectual property is by releasing it under a Creative Commons license (or “CC license”), a type of universal license agreement that allows others to use the material—without asking permission—in exchange for some basic requirements, such as providing a link back to your website and credit the copyright owner.

How might this be useful? If your business required a work for hire agreement from your photographer, your business might place a Creative Commons license on your product images, host them on Flickr, and tag them for greater exposure. Who knows—writers might end up using your images in blog posts, promoting you to readers with you even having to try!

[Read more about CC licenses at CreativeCommons.org]

A Copyright Transfer Agreement Is Used After Material Has Been Created

If your business comes across an existing photograph that you’d just love to use on all of your promotional material, you might use a copyright transfer agreement. A copyright transfer agreement can be used to shift copyright ownership—entirely—from the photographer to your business.

One thing to be aware of: it’s going to cost your business more to purchase a copyright outright than it would to purchase a license—which is completely proper and to be expected. You’ll need to weigh your intellectual property needs against your budget and come up with a solution that works for you.

A transfer agreement can also be used to make up for times you let a work for hire agreement slide. If you forgot to have your independent contractor sign a work for hire at the time, no problem—he may be willing to sign a copyright transfer agreement after the fact.

Don’t let your intellectual property rights slide! Smart small businesses control, manage, and leverage their copyrights—and always know which party owns which works.

 

Bio: Sarah Kolb-Williams is Senior Content Editor for Click&Inc, a business incorporation company dedicated to helping entrepreneurs start new businesses, giving them the tools they need to grow, and helping them better manage their intellectual property.

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