Who Owns That Asset? Do You? Are You Sure?

Author: Marijo McCarthy

Author: Marijo McCarthy

Rarely does a client question arise that I have not been asked before. It is just the nature of the beast that small business owners across a wide spectrum of industries have common challenges. Last week, in fact, I received the same question from two different people. In one case, it was a client who called with "one quick question." In the other, it was an accountant getting in touch on behalf of her client. This is the scenario they were both asking about Typically, an entrepreneur who sells a service will require the outside expertise of consultants and other professionals to perform various pieces of projects. Often, these consultants are long-time resources; individuals or companies who have performed this very same service again and again for the entrepreneur. The relationship may be longstanding (years), and with so much trust and goodwill, the entrepreneur never gets around to asking the consultant to actually sign a contract. The service provided graphic design, for example may seem relatively benign, and if provided regularly and with no unpleasant surprises, all parties involved may believe that "all is well." However, here is the "caution" I promised you. Who owns the (in this example) graphic design work completed? Although the intention of everyone involved (including the designer) may have been for you or your client to own it, in reality and absent an explicit agreement to the contrary the creator of that "graphic design" legally "owns" the design he just created. Yes, the same design you intend to bundle and deliver to your client! Now, before you begin to have heart palpitations, you should know that there is an easy "fix," (a) to gain ownership of a product or service you have commissioned from an outside consultant and which (b) in most instances, your outside consultant intended to give you ownership of in the first place. It just requires marrying the intent with the action and creating a document to memorialize both. (Would that all challenges were so easily conquered!) The "fix" is called a "work for hire" contract, a document which can accomplish several desirable outcomes: It helps to establish the independent contractor nature of the relationship between you and your consultant. It provides a document within which your consultant can agree to keep the work confidential not to be disclosed to the rest of the world. It establishes, by affirmative statement, that the creative work product will be owned by you (and hence, can be transferred to your client), rather than the original creator, whose initial ownership flows by law to the creator on the day of creation. Sometimes, things don't have to be complicated, lengthy, expensive or time-consuming. Sometimes they can be just as you would like them simple, brief and inexpensive! The information you obtain here is not, nor is it intended to be, legal advice.

You should consult your own attorney for individual advice regarding your own situation. Copyright 2009 Widett and McCarthy, P.C. About the Author:

Marijo McCarthy is principal of Widett and McCarthy, P.C., a Boston area law firm that helps Massachusetts small business owners build successful companies, one contract at a time.

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