THE POTENTIAL PITFALLS OF COMMISSIONING WORKS

Patricia Jones

Patricia Jones, Hammonds

It is common for businesses to commission third parties to design literature, software, websites, artwork or similar for them. These works will be protected by copyright and, unless the parties have agreed otherwise, it will be the third party designer that owns the copyright. This is a problem, as it will restrict how the business is able to use the copyright work.

This was the position in the recent case of Meridian International Services v Richardson [2008]. Meridian commissioned (and paid) Richardson to develop some bespoke software but the parties failed to agree who would own the copyright in the software. The High Court held that, in the absence of agreement otherwise, Richardson owned the copyright. Meridian argued that the court should imply a term into the contract with Richardson effectively assigning the copyright to Meridian or granting it an exclusive licence of the copyright. The court refused to do this.

A court will generally be reluctant to imply into a contract an assignment or licence of copyright in favour of a commissioning party. It would need to be satisfied that inclusion of the term would be ‘so obvious it goes without saying’. However, if the parties had never even thought about who should own the copyright, this issue cannot really be said to be ‘so obvious’ that a term should be implied.

In any event, litigation such as this is costly and time consuming and should be a position of last resort only.

To avoid problems arising when works are commissioned, Patricia Jones of ACID Accredited law Firm Hammonds recommends the following:

DO enter into a contract with the designer

DO ensure that the contract is in writing

DO include a term in the contract making it clear that you will own the copyright (and all related rights) in the finished work

DO include an indemnity in the contract just in case the work infringes third party IP rights and you get sued. The indemnity would oblige the designer to reimburse you for any damages that you are ordered to pay

DO take legal advice on the wording of the contract if you are in any doubt.

www.hammonds.com

 

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