Hiring a freelancer has many benefits, but ownership of their intellectual property is not one of them. By law, the creator of software owns the copyright to it unless specifically sold on to another party. It’s important for both freelancers and clients to understand copyright law and licensing, so contracts can be drawn up legally and fairly.
‘Contract for services’
Unlike employees who have a ‘contract of service’, freelancers work under a ‘contract for services’. Unless there is an explicit agreement to the contrary, the freelancer will retain copyright of anything that they produce – be it a piece of code from a developer, artwork from a designer or a blog post from a writer.
In cases where there are two or more creators of a single work (e.g. a website created by a freelancer and a company employee), both parties will be joint first owners of the copyright. All owners of copyright have to agree to another party using or copying a work, or it’s still a breach of copyright.
Licensing agreements
Software developers own the code that they write. So, in products that are developed for clients, the freelancer retains the copyright unless directly stipulated otherwise. The work produced will come with a non-exclusive licensing agreement, whereby the company pays the freelancer for use of the code (usually included in the freelancer’s project fee).
Freelancers can stipulate what licence holders can do: for instance, you may be allowed to edit the code but not to build a new project from it. The latter would be an infringement of copyright.
Licences can also be exclusive to one client. For a higher price, the freelancer retains ownership of the copyright but allows only one party to use the materials for a limited period. This prevents the freelancer from using the code in projects for anyone else, but may also mean a client cannot use the same software again. Exclusive licences are not legally binding unless they are in writing. The original copyright holder still holds some moral rights (such as the right to be named as the author) unless they choose to waive these.
Copyright ownership
Owning the copyright to a project or piece of code ensures that you have sole use of it, but will also cost a lot more. Not only will a freelance developer charge three or four times their usual price for the privilege of being the legal owner, but there may be a lot of practical problems involved.
For instance, say there is a core bit of code which the freelancer has used in ten previous projects and agrees to sell to a client. If the freelancer has not told the other users, this may become a problem for the new owner: people will be using copyrighted code in violation of copyright, but the new owner may have no way to find them. Regardless, their software will need to be relicensed to allow usage, or barred from usage as the new owner sees fit.
A transfer of copyright always requires a written and signed agreement: handshakes or oral contracts are not permissible. Therefore, unless you and the freelancer you are working with are both happy to sign a copyright agreement, you will not own the copyright to any projects created by freelancers.
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The key takeaway is to always create a contract which both the freelancer and the client are happy with. Ensure both parties understand what kind of agreement is being entered in to – whether it is non-exclusive licensing, an exclusive licence, or a transfer of copyright. It may help to have a copyright lawyer check over anything you’re unsure of, in order to ensure all parties are satisfied and know exactly what’s expected of them.
