There are many things to consider when hiring an independent contractor. Make sure you'll legally own the finished product you've paid for.
As a business owner, there are likely times you will enlist the help of independent contractors to help you with various odds and ends.
One of the most typical scenarios occurs when a business hires a photographer to help capture images of new products for marketing and promotional purposes.
In order to make sure you, the business owner, and not the photographer is the copyright owner of the photos, a “work made for hire” provision as well as an “assignment clause” in your Independent Contractor Agreement will vest the ownership rights to any Intellectual Property generated in the course of the project in your business (for example, copyright ownership for any photographs or videos taken of your products).
Related Article: Prior to Hire: Things to Consider When Bringing in Freelancers
When working with an independent contractor, a clear and easy to interpret agreement is the foundation of a transparent working relationship. The Copyright Office and the Courts have typically cautioned that for work created by an independent contractor to qualify as “work made for hire,” three specific conditions must be met:
A. The work must be "specially ordered" or "commissioned" by the employer to be carried out by the independent contractor;
B. The work must fall within at least one of the nine narrowly defined categories of commissioned works listed in the Copyright Act: a work for use (1) as a contribution to a collective work (i.e. an article contribution in a magazine), (2) as a contribution to a motion picture or other audiovisual work, (3) as a translation, (4) as a supplementary work, (5) as a compilation, (6) as an instructional text, (7) as a test, (8) as an answer material for a test, (9) as an atlas; and
C. Prior to starting any work, both parties must expressly agree in a signed document that the work shall be considered a “work made for hire,” and ownership of any rights to the work will vest with the employer. If the work doesn't neatly fit within the definition of "work made for hire", the contractor should "assign" any rights he may have to your business.
For example, in the scenario of a furniture store hiring a photographer to take pictures of its new inventory, who would own the copyright rights to the images taken? If the furniture store “specially commissions” the photographer, as an independent contractor, to take pictures of the new inventory and has the photographer sign an agreement containing a “work made for hire” clause before the photographer takes any pictures, then the furniture store effectively owns the rights to the photographs produced.
On the other hand, if no “work made for hire” provision is agreed to, the photographer likely has full ownership, or at least joint-ownership along with furniture store, in the photographs, and is free to sell the photos to competitors of the furniture store or use the photos in other works.
An example of a sound “work made for hire” clause would read:
“The AUTHOR [the Independent Contractor] and [Business Name] intend this to be a contract for services, and each considers the products and results of the services (the "Work") to be rendered by the AUTHOR to be a work-made-for-hire. The AUTHOR acknowledges and agrees that the Work, and all rights therein, including, without limitation, copyright, belongs to and shall be the sole and exclusive property of [Business Name]. To the extent that such work is not, by operation of law, a work-made-for-hire, AUTHOR hereby transfers and assigns to [Business Name] any and all of his/her right, title and interest in the work therein, up to and including copyright.”
When joint-ownership applies (meaning, both the photographer and your business both own the rights to the work), then an exclusivity clause should also be part of the contract to limit the ways in which the independent contractor can use the work. An exclusivity clause should address the following:
A. Limits to the ways work(s) may be used;
B. Clearly state that none of the work, or any derivative thereof, may be used in connection with or for the benefit of a competitor; and
C. Specify that the written consent of both “joint-owners” must be obtained prior to use of the work(s) for any other purpose beyond that of the original scope.
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When working with independent contractors, inserting a “work made for hire” clause in the independent contractor agreement should become standard practice to ensure you own what you paid for. As always, talking to an experienced attorney about issues that may arise when working with independent contractors is advised before the start of such relationships.