Wednesday, March 9, 2011

Intellectual Property - Work Made for Hire

Most of the time if you are paying for work to be done, you want to own the product of that effort.  For example if you hired someone to write copy for you and you failed to own that, each time you wanted to use or modify that you would need to go back to the creator to get their approval to change it. If you hired a photographer to take pictures or film a meeting, unless you had ownership of the product, each time you wanted to make copies, use it, or make changes you would need to go back to the original Supplier. As the originator of the work, they would have the Copyright.

The simplest way to get ownership is to include in your Contract a “work made for hire” provision such as:
"All Deliverables belong exclusively to Buyer and are works made for hire.  If any Deliverables are not considered works made for hire owned by operation of law, Supplier assigns the ownership of copyrights in such works to Buyer. 

If the Deliverables included some of the suppliers pre-existing materials or tools, the Supplier might want to exclude this and may do so in the definition of Deliverables such as: 
”Deliverables” means all items developed in the performance of this Contract but does not include any preexisting materials, or tools of Supplier, or items specifically excluded".

If you need to be able to use pre-existing materials or tools to be able to maintain, support or modify the item the Supplier delivered, in conjunction with the work for hire language you would also want a license grant to use those materials or tools for those purposes.

From a negotiation perspective the main impact of this is on the life cycle cost of what you purchased. If you don't have the rights to make changes, additions, improvements and be able to support and maintain what you purchased without having to go back to the original Supplier all the time, it limits the value of the purchase. It also leaves you in the undesirable position of having to negotiate with the original supplier with no competitive leverage available. 

If a Supplier won't give you ownership and license rights to do what you need to do, make sure that you negotiate what the costs will be for every type of scenario and include those in the contract so you control what the cost will be if you need to purchase them.    

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