Intellectual property rights can be a key issue and should be given some thought whenever creating or commissioning works which contain intellectual property rights.

Intellectual Property 3d Gold Man

Although intellectual property is often viewed as a key asset, there is no legal meaning of “intellectual property rights” or “IPRs”. Instead this is the term used to describe a range of rights that can exist. Common IPRs include copyright, design rights and trade marks.

Different IPRs have different rules in relation to:
• the types of outputs they are able to protect
• who the owner is of the IPR in the output
• how long the owner can exploit the IPR in their outputs
• what the owner has to do to get the protection of the relevant IPR – generally this happens in two ways: there can be automatic protection where the IPR owner’s rights simply exist (e.g. copyright) and those that have to be registered (e.g. registered design rights, patents, etc.)

Depending who you are in the chain, it may work for or against you if the contract is silent in relation to ownership and licence of IPRs in the output (or if there isn’t a contract).

If you engage a third party to commission any output for you, this doesn’t automatically mean that you will own the IPRs in that output even though you’ve paid the third party to create it. For example, copyright is an automatic right that remains with the creator of the output unless agreed otherwise (the exception being IPRs in outputs created by employees in the course of their employment which will vest in their employer). See I own what I pay for. Right? for more information.

So clearly if you are commissioned by a client, it may work in your favour for there to be nothing in writing covering this, as this means that some IPRs (e.g. copyright) would remain with you. However, this is unlikely to be the intention of the client. Even if there is no contract and it works to your advantage, being in a good position because of a misunderstanding may not bode well for long term relationships!

It also works the other way. If you have relied on input from the client in creating the output, or part of your output contains client IPR, you would need appropriate contractual provisions in place to ensure that you could incorporate their IPR in your output moving forward, without cost (and even some assurances that use of it doesn’t infringe third party IPRs). Otherwise you could find that they come out of the woodwork at a later date and require you to start paying a licence fee.

So its important that you consider what rights or licences you want in any output created for you, or that you are creating for a third party. See Don’t learn the hard way! for what could happen if you don’t.

Tracey O’Connell of Lawpoint contributed to the book, The Collaboration Game – it’s a freelance thing (written by David Drysdale), and wrote the chapter on contractual arrangements for collaborative freelancing which includes information regarding ownership of IPRs and the importance of covering this in your contract.

We now offer fixed price T&Cs for digital companies which give you the best position regarding IPRs, as well as other issues relevant to your sector. For more information check out our digital contracts page here.

We also have a factsheet – Protecting IPRs in software. Please contact us if you’d like us to send you a copy.

If you’re not a digital company, IPRs could still be a key issue and even if they aren’t, we can still help! Get in touch to discuss what we can do for you.