Practical Considerations in Intellectual Property

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What comes to your mind when you hear the term “intellectual property”?

For many people, this term is associated with the creation of inventions and, therefore, there is a general belief in the public that intellectual property does not apply to small businesses or ordinary people. This belief is erroneous.

The term intellectual property could be defined as any intangible asset that consists of human knowledge and ideas. It is a product of the mind or intellect. There are various categories of intellectual property. Some of the main categories are patents, copyrights, and trademarks. This article will specifically focus on copyright with some practical advice for your business.

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COPYRIGHT
Copyright is a set of exclusive rights that the copyright owner has to produce or reproduce a work or a substantial part of it in any form whether in digital or hard-copy format. This set of exclusive rights includes, among other rights, the right to use, reproduce, modify, publish, distribute, and license this original work to third parties. It is important to remember that copyright protects the expression of an idea and how you express the idea in a specific form, but it does not protect the idea itself. Consequently, anyone can use another person’s idea as long as the reproduction of this idea in a definite form is a mere copy of the other person’s same idea in the same form.

To obtain copyright, one has to show that some skills and labour took place in the expression of a particular idea. Copyright applies to various categories of works such as literary, dramatic, musical, and artistic. Copyright protection exists as of the moment the work was created and generally lasts 50 years after the life of the author who has created the work when dealing with an individual. Copyright protection will end on December 31 in the fiftieth year following the death of the author of the work. After this time, copyright is said to become part of the public domain, which means that it becomes everyone’s property.

Copyright can be transferred to another individual or a company through licensing or assignment of copyright. An assignment of copyright occurs when the copyright owner assigns to a third party all his or her rights in the work.

Finally, it is crucial for businesses to understand the difference between the author of a work and the owner of a copyright in the work. In most circumstances, the author will also be the owner of the copyright. However, if you are an employee and create a work during the course of your employment, there is a provision in the Copyright Act that stipulates that any work created during the course of employment will belong to the employer. In this scenario, although someone could be the author of the work, that person will not have copyright ownership of the work.

This distinction is extremely important to businesses. Businesses will have to determine whether or not the persons working for them are employees or contractors. If a business hires a contractor to create a specific project, even though the contractor is being remunerated for his or her services with the understanding that the contractor is creating a specific project for the business, the business will not own the copyright in the materials until the contractor assigns the copyright to the business. If the business only hires employees, then the business will have copyright ownership even though the work was created by the employee.

Having distinguished between employees and contractors, it is also important to mention that parallel to copyright ownership, there are moral rights that also appear when the work is created.

MORAL RIGHTS
Moral rights are the rights of an author of a work, not necessarily the owner of the copyright in that work, to be associated with the work the author created. No one, including the copyright owner, is allowed to distort, mutilate, or otherwise modify the author’s work in a way that would prejudice the author’s honour or reputation. One of these moral rights is the right to the integrity of the work.

Moral rights have the same term as copyright, which is 50 years after the life of the author of the work. However, moral rights cannot be sold or transferred. Moral rights can only be waived by the author of the work. If the author dies before the expiration of the term of moral rights, these rights will pass to the author’s heirs, even if the heirs do not inherit ownership of the copyright itself.

The author can only waive his or her moral rights after the work has been created. Only individuals can waive moral rights, not companies. By waiving moral rights, the author notifies the person or company to whom the author is waiving in favour of, that the author will not exercise his or her moral rights. The author gives up any recourse against the person or company receiving the waiver if there is any distortion, mutilation, or modification to the author’s work in a way that could prejudice the author’s honour or reputation.

There are various tips businesses can follow to avoid any misunderstanding regarding copyright and moral rights. We have enumerated just a few practical considerations to help businesses when dealing with intellectual property.  

Practical Considerations  
The first and foremost consideration would be to familiarize yourself with copyright laws and determine your position with respect to intellectual property rights if you decide to hire contractors. Do you want to retain the intellectual property that will be created by the contractor?  

If you decide to retain the ownership of the intellectual property in the work the contractor will create for you, then ensure that the contractor assigns his or her copyright back to you individually, or to your business, as long as your business is a recognized legal entity. Also, ensure that the contractor waives his or her moral rights in the work the contractor has created for you. This process should be done after the work has been created.

If the contractor is a company, the company will assign the copyright, but it will be the specific individuals who worked on the project that will waive their moral rights. The fact that you pay a contractor for a work to be created does not in itself constitute an assignment of copyright or a waiver of moral rights in that work.  

If your business is creating works containing intellectual property rights, ensure there is no third-party copyright embedded in the work or, if there is, that you sought and obtained copyright permission from the copyright owner of this third-party material. If you are a contractor and are bound to assign the copyright in the work you create, you cannot proceed to do this if you have pieces of materials that were not created by you. When assigning your work to the person or business who hired you, always ensure you have permission from the copyright owner of this third-party material when including it in your own work.

Finally, always clarify any ambiguities in writing with the party you are contracting with to avoid any miscommunication. If necessary, amend the contract to reflect any changes that have been agreed to between yourself and the other party. This will go a long way in developing and strengthening your relationship with this person.