Intellectual Property and Technology

Thinking of ... Commissioning Third Party Work?

Definitely an area where it pays to think ahead to avoid misunderstandings and disappointment when you engage any independent supplier, consultant or professional to produce materials or carry out work for you. Here are some of the issues that you need to think through ...

Remember the golden rule - the underlying intellectual property rights in creative work belong to the individual creator of the work concerned except where that person carries out the work in the course of employment where the rights will generally belong to his/her employer.
What do you wish to be able to do with the work which you have paid for? - whilst you will usually have complete control over work which is created in-house, this is not the case with work commissioned from an outside third party. Generally speaking the intellectual property rights in creative work or materials belong to the creator of the work concerned - in the absence of an agreement to the contrary.
Don’t confuse payment and ownership - the fact that you pay for a professional’s creative work does not give you ownership of the intellectual property rights underlying that work. Unless you provide otherwise, the software developer to whom you have just paid a substantial sum for a new software system is perfectly entitled to supply the same system, or elements of it, to one of your competitors. That’s because the software developer owns the copyright and what you have bought is simply a licence to use it. Your ownership rights extend only to the disks or other tangible media on which the software is encoded.
Are you dealing on the basis of a third party’s standard written terms? - if so you need to consider them carefully. Under the standard terms commonly used in the case of the engagement of an architect for example, copyright in drawings remains with the architect and your entitlement may only be to make use of these for a specific purpose. So, drawings produced for the purpose of obtaining planning permission for, say, your house extension cannot automatically be given to or used by your builder for the purpose of pricing and carrying out the actual building work.
Don’t forget freelancers - you’ve identified the nature of the intellectual property underlying the work concerned, know what rights you need to acquire for the use you have in mind and have straightened these things out in writing with the supplier. So far so good, but don’t stop there. Can the supplier deliver what’s been agreed? Applying the “golden rule” the answer is yes where employees are involved. However - and this is particularly problematic in IT, software development and design fields - the work of freelance personnel may not be under the control of the supplier you’ve contracted with. Freelancers own their own intellectual property which needs to be “captured” by suitable IP provisions in their contract of engagement - either directly with you or via your supplier.
Don’t forget third party rights - the website you’ve just commissioned and set up may contain copyright or design or database material belonging to an outside third party who has not consented to its use by you (and isn’t likely to if a competitor). Trade mark infringement or passing-off through metatags or key words hidden in the website are another problem area. Equally a technical process or design solution which you’ve paid for may rely on proprietary information or know-how belonging to a third party and which has been obtained in breach of a non-disclosure or confidentiality obligation. Asking the right questions at the right time can prevent these headaches arising.

These are just some of the important issues we would advise are considered when commissioning third party work. For further advice in this area ask any of our team.