If I pay for creative work, do I own it?
An entrepreneur wants to know who holds rights to commissioned designs: the buyer or the artist?
(FORTUNE Small Business) -- Dear FSB: I recently purchased a design/drawing from an illustrator to use as a design for my T-shirt. Since I paid for the drawing and it was originally my idea, do I own all rights to the design? Can I even copyright it?
- Arch, Brooklyn, N.Y.
Dear Arch: It all depends on the agreement you had with the designer and how the agreement was formalized, according to Ted Max, a partner with Sheppard, Mullin, Richter & Hampton LLP's fashion apparel team.
"Part of the issue is the circumstances in which the illustration was created," said Max, who focuses on intellectual property, litigation and licensing issues concerning the fashion industry.
Under copyright law, there's a concept called "work-for-hire," which grants the employer - the one who pays for the work - all rights associated with it. Otherwise, copyright ownership of creative work generally remains with the person who actually executed the work.
An attorney who has worked with fashion design houses such as Marc Jacobs and Louis Vuitton, Max strongly suggests that if you are a business owner commissioning a work, make sure all the terms of purchase are in writing.
A good agreement includes a clear document setting forth the following terms: that the work is original and does not violate the intellectual-property rights of another; the buyer owns all rights, copyrights and interest; the work is created at the buyer's direction and to their specifications; and the buyer has final approval rights and "moral rights" to change or alter the artwork as the buyer sees fit.
If you haven't written anything down, the question comes down to what the parties intended.
"If a client said, 'I paid someone $50 and they gave me the drawing,' my question would be, 'Was this a work-for-hire, and who was supposed to retain the rights to the copyright?'" Max said.
If you commissioned the work without an agreement on paper, Max suggests creating a "confirmatory document" that spells out the understanding between the parties of how the work was created, the existence of the work-for-hire relationship, and the agreement that the buyer owns all rights, including the copyright.