Copyright – ownership of key designs
Many businesses will have key copyright works that are central to their operations. Perhaps the most central is a logo that identifies their brand or is otherwise a key part of their business. Think the Nike swoosh logo or the coca-cola stylised name.
A very large amount of these business’ marketing expenditure and brand awareness are built around these key pieces of intellectual property.
It is critical that the business owns, and can demonstrate that it owns, copyright in these logos. The key logos may also get registered as trademarks, but at the beginning, if they are an original artistic work, then copyright will subsist first.
Initially, the copyright in any artistic work will be owned by the artist/designer who created the work.
If an employee creates the copyright work in the usual course of their duties, then the employer automatically becomes the owner of the copyright (Copyright Act s35(6)). For employees who create copyright, it is prudent to have a term in their employment contract recognising this too. The business should track which employees created what copyright and when. If this is a common part of their business, such as a fashion brand, then it is recommended that a register of copyright be maintained.
However, if a business engages an outsider person, a contractor, to create the artistic work, copyright is not automatically transferred to the business. That sounds counter-intuitive, because that is what the outside person is being engaged, and paid, to do. But to transfer copyright a written assignment is required. It is therefore critical that whenever a business engages a contractor who is involved in developing IP, for the business to enter into a written and signed agreement with the contractor which provides that all IP developed by the contractor is the contractor’s own original work and is transferred to the business.
Two recent cases demonstrate the necessity to do this (but in the second case saved ay an ironic twist.
In the first, the Hells Angels motorcycle club in San Francisco engaged a tattoo artist known as “Sundown” in 1954 to create a skull image used on membership cards. The tattoo artist apparently frequented the pool hall where the San Francisco chapter met. The tattoo artist came up with the death head design.
Pool halls and characters like the Hells Angels and Sundown are not the type of people who worry about the niceties of a legal assignment in writing. Indeed, there was none. So when the Hells Angels sought to sue Redbubble who allowed people to print various images onto various products (such as coffee mugs), the Hells Angels could not establish that they owned copyright in the death head logo and lost their case on this basis (but succeeded based on trademarks).
In the second case, Racing Victoria wanted commemorative medals based on famous jockeys or trainers struck for annual awards. Racing Victoria provided historical photographs of the jockeys and trainers and a Melbourne jeweller provided sketches of proposed medals. Mr Douglas was engaged to make the medals and was paid accordingly. Mr Douglas then engaged a die maker Mr Forwood to create the actual medals based on Mr Douglas’ sketch, but gave to the die maker the original photographs. Over time, Racing Victoria moved away from Mr Douglas in providing the medals and appointed a new supplier. Mr Douglas claimed that he was the owner of the copyright in the medals, that his copyright had not been assigned to Racing Victoria and that Racing Victoria was breaching his copyright by continuing to strike the commemorative medals. Although Douglas had been paid for his work, arguably he was being opportunistic and was just seeking another pay day. It was true that there was no assignment from Douglas to Racing Victoria. But in an ironic twist, the person who ultimately created the medals, Mr Forwood, had not assigned his copyright to Mr Douglas. So, the court held Mr Douglas did not own the copyright which he alleged Racing Victoria had breached!
The bottom line is that, particularly if a business engages a graphic designer to create their key logo, ensure that the contract with the graphic designer includes an express assignment of copyright in the work created. But the same principle applies to a business engaging:
- photographers, whether for an advertising shoot or a model/action/athlete shoot;
- designers for products;
- graphic design studios who design point of sale catalogues, etc.; and
- IT software writers.
In all situations, written contracts with appropriate IP assignment and indemnity clauses should always be used.