Jobsite Brainstorm: Whose Good Idea Was That?

by | Jan 6, 2015 | Contracts

You develop a better mousetrap – possibly a faster way to fabricate certain construction materials at the project site. Who owns that idea? The U.S. Supreme Court answered that question more than 100 years ago, recognizing that the right to most work created by an employee in the course of his or her employment actually belongs to the employer not the employee.  The “work for hire” doctrine, as it has come to be called, established a concept that continues to exist today.

Most employers drive this point home by including a specific acknowledgment in initial employment documents, stating that employees shall have no right or interest in any work product which employees may conceive or create while employed.  Some employers even require their employees to sign registration documents needed to gain copyright or other intellectual property protection from appropriate governmental agencies for these inventions, discoveries, systems or designs.  Most employees raise little, if any objection.  After all, they understand that they are being paid to work and their pay includes compensation for anything they create while working.

But what happens if the person doing the work is not an employee but an independent contractor?   The issue becomes more complicated.  If the work is to be one made for hire (meaning it will belong to the employer), the parties must so agree in writing prior to the commencement of the work.  But even then, the work must be specifically ordered or commissioned by the employer, and the work must fall within one of nine legally recognized categories (a contribution to a collective work, part of a motion picture or other audio visual   work,   a   translation,   a   supplementary   work,   a compilation, an instructional work, a test, test answer material, or an atlas).  It would be a mistake to assume that whatever an independent contractor does   for an   employer, at   the   employer’s   direction, belongs to the employer.  And simply having an independent contractor agree that something is a work for hire does not make it so.  It needs to fall into one of these legally recognized categories.

Why is this important?  Imagine if you discover that someone has copied some of the designs you specifically commissioned and for which you paid an independent contractor.  You sue to enforce your ownership rights, only to discover you actually have no standing.  The designs weren’t yours to begin with because they were not within one of the recognized categories listed above – a result made even more distressing if you paid good money for the work to be created and now find out you don’t own it.

Most people believe that the copyright, and therefore the ownership, of a created work vests with the author.  That’s generally true.  Likewise, they think that if you engage and pay someone to create something, then that work product belongs to you.  Maybe.  But all those assumptions are undercut when you’re dealing with an independent contractor.

So what should you do?  Always, always reduce any understanding to writing before the work is started so that both the one requesting the work and the one creating the work know their rights.  Also consider adding license or assignment language, as well as a work for hire provision, when dealing with independent contractors.  Have them license or assign the work product to you as part of any written agreement you enter into.  If ownership becomes an issue, you don’t want to be caught flat footed.

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