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I Commissioned the Work – Why Do I not own the Intellectual Property?

Businesses that commission work frequently assume that they will own the intellectual property rights, such as copyright and design right, in that work. That assumption is often incorrect, leaving the person who carried out the work as owner of the intellectual property rights. This can mean that the person that commissioned the work can find others benefiting from it, or even having to pay to use the work for other purposes. In particular, provisions of the Intellectual Property Act 2014 will come into force on 1 October 2014 and will mean that from that date the intellectual property in design will belong to the person commissioned to create it rather than the person who paid for the work. This reflects what has always broadly been the position copyright. [More]

Many businesses assume that if they have paid for the creation of a piece of work the intellectual property rights in that work will belong to the business. This assumption is usually not correct. The contract for the work should stipulate who is to own any intellectual property rights in the work. If the intellectual property rights remain the property of the person who created the work, then that person will be at liberty to sell or licence the intellectual property rights to third parties. The commissioner may not be able to use the work for other purposes. The commissioner may also not be able to transfer the right to use the work to a third party, which could be a major problem if for instance the commissioner wishes to sell its business.

This does not apply to employees, where the intellectual property rights in the employee’s work carried out in the course of the employee’s duties will normally belong to the employer. However, the contract of employment should still include express provisions about ownership of intellectual property rights to avoid potential disputes where an employee creates something giving rise to intellectual property rights outside or partly outside the employee’s contractual obligations.

Businesses need to remember this distinction when using self-employed contractors rather than employees (as is for instance common practice in the IT industry) and to ensure that the contract with the contract includes appropriate provisions for ownership of intellectual property rights.