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Work for Hire Agreements Require Due Diligence

by | Feb 11, 2022 | Intellectual Property

If you want to hire someone to create a work of art that might be protected by copyright laws (for example, a logo, an advertising piece, or even a photograph), you should make sure the person you want to hire is not already encumbered by another contract. This blog explains why.

First, unless a contract states otherwise, copyright law gives ownership of a work of art to the artist or author, and not to you, the person paying for the work. In most cases, you would receive a mere license, not ownership. This is why attorneys usually include a “work for hire” clause in contracts for services. Here is an example of a work for hire clause:

Artist understands and agrees that all Artwork is being developed by the Artist for the sole and exclusive use of the Company and as such the Company shall be deemed to be the sole and exclusive owner of all right, title, and interest therein, including all copyright, proprietary rights, and any other intellectual property rights relating to the Artwork and any derivative works thereto. All work performed by Artist on the Project and all Artwork generated in connection therewith is and shall be considered as “Works Made for Hire” (as defined under the U.S. Copyright Laws) and, as such, shall be owned by and for the benefit of Company.

Then, to address certain problems that might arise if the Artist decides not to cooperate in the future, attorneys often include a present-tense assignment clause in a contract. Like this:

In the event that it should be determined that any of such Artwork does not qualify as a Work Made for Hire, Artist will and hereby does assign to Company all right, title, and interest that it may possess in such Artwork including, but not limited to, all ownership, copyright, and proprietary rights relating thereto. Upon request, Artist will take such steps as are necessary to enable Company to record such assignment, at Company’s expense.

Finally, attorneys also typically add a “Rep & Warranty” clause to a work-for-hire contract. This is an attempt to hold the Artist responsible if it turns out that the Artist is already encumbered by an existing work-for-hire clause in another contract, or is obligated to assign all works of art to an existing employer. Here is an example of a Rep & Warranty clause:

Artist represents and warrants to Company that the Artist is free to enter into this Agreement and that its performance thereunder will not conflict with any other Agreement to which Artist may be a party.

Here’s the problem: What happens if the Artist lied, or if the Artist didn’t realize she was already obligated to assign all new works of art to her employer? Any solution to this problem is going to be messy and difficult. So, my advice is to do your due diligence! Make sure you convince yourself that your Artist is not already encumbered, either by a specific contract or by the fact that the Artist is employed by someone else and doing your job on the side. Another employer may have a common-law right to your Artist’s creations if they are within the scope of the employer’s business. You want to identify and address that fact as early as you can!

Clyde Findley is Special Counsel in the Intellectual Property practice at Berenzweig Leonard. He can be reached at [email protected]