Work for Hire: Protecting Your
Intellectual Property Rights
Many dentists hire independent consultants to develop their
website or to perform marketing services to brand their dental office. However,
most dentists are unaware that without a written contract that includes certain
specific provisions, the independent consultant retains the ownership of the
intellectual property created. Because the consultant's ownership of the
intellectual property is not common knowledge, this can create problems for
dental offices that do not adequately protect their rights.
Copyright law protects work from the time it is created. The
general rule under the Copyright Act states that a person who creates the work
is the author of that work, unless the work is designated as "work made for
hire."
For example, if a dental office hires a graphic design company to
create its' company logo and a "work made for hire agreement" was not signed
before the logo was created, the graphic design company would own all of the
right, title and interest to the dental office's logo. The graphic design
company would be free to license or sell the logo and dilute the market place
with similar images. The dental office would have no control over its own
logo.
There is, however, an exception to this principle: "works made for
hire". This doctrine allows for an employer to be considered the author of the
work even if an employee created the work. If an employee creates intellectual
property for an employer, the employer will own the exclusive rights to work
created, if the work was created within the scope of the employee's employment.
However, although work created by an employee is considered to be "work for
hire" and is owned by the employer, the more cautious dental practice owner will
still have their employees sign an employment agreement that transfers ownership
of work, ideas and inventions to the employer. Because many employees often
work from home or at odd hours, it can be unclear if a concept or idea was
created during the course of employment.
If an independent contractor is performing the services for a
dental practice, the contractor is the lawful owner of the work unless the
"works made for hire" requirements are met. The "work made for hire" doctrine
requires that three [3] conditions must be satisfied in order for the hiring
business to own the original work. First, prior to the commencement of the
work, the parties must agree in writing that the work shall be considered "work
for hire". Second, the work must have been "specially ordered" or
"commissioned" by the hiring party. Finally, the work must fall within at least
one of the nine [9] statutorily mandated categories of commissioned works listed
in the Copyright Act. A "work made for hire" is defined in the Copyright Act (15
U.S.C. § 101) as "a work specially ordered or commissioned for use as a
contribution to a collective work, as a part of a motion picture or other
audiovisual work, as a translation, as a supplementary work, as a compilation,
as an instructional text, as a test, as answer material for a test, or as an
atlas."
These requirements necessitate that the parties have a written
agreement in place with specific work-for-hire provisions. And since it is not
always clear whether the work product falls into one of the nine [9] specified
categories authorized by statute, a well-drafted independent contractor
agreement should always include language assigning all of the intellectual
property rights associated with the work created to the dental practice
contracting for the work.
Since more and more dental offices hire independent contractors
and consultants rather than hiring full-time or part-time employees, the
question of ownership regarding intellectual property rights has created a
substantial amount of litigation. The consequences of failing to take the
necessary steps in order to protect your dental office's intellectual property
rights can be very problematic, particularly if there is a dispute over payment
or the quality of work with the independent contractor or consultant.
In today's digital and knowledge based business world, dental
offices are not always careful in protecting their "work made for hire".
Intellectual property rights associated with work created by employees and
independent contractors can be the source of expensive litigation if a dental
office becomes successful. Intellectual property is also an important subject
of review during any due diligence period that may be conducted for the purposes
of financing and selling a business. As a matter of general practice, and
especially when the intellectual property being created is crucial to the
long-term growth of the practice, well-drafted employment and/or independent
contractor agreements must be in place.
Stuart J. Oberman, Esq. handles a wide range of legal issues
for the dental profession including cyber security breaches, employment law,
practice sales, OSHA and HIPAA compliance, real estate transactions, lease
agreements, non-compete agreements, dental board complaints and professional
corporations. For questions or comments regarding this article please call (770)
554-1400 or visit www.obermanlaw.com.