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Hiring Subcontractors

So when you do that, like I said, you need an independent contractor agreement assigned independent contractor agreement, you need to make sure that you're signed independent contractor agreement includes a valid work for hire claws and copyright transfer language to ensure that your studio owns the I p okay, now you might have different collaborations like you might be the designer brought on to a different team and maybe it was a different studio that acquired the client, and therefore part of the terms is whatever you create they're going to own and that's okay too, but just you need to make sure what the relationship is and who is going to own the I p whenever you're creating stuff, okay, so whether you are working with someone else as you know, independent contractor or they're working for you as an independent contractor, make sure you understand whose owning the resulting I p that's the number one priority that's your number one priority as a designer because that's, how you mak...

e your money, you generate revenue from transferring intellectual property, ok? So let's, actually look at what worked for higher actually is so you understand it there's a lot of confusion about work for hire it's, something that I think a lot of freelancers and people in the visual arts have heard of, but they don't really understand it it's also a way that a lot of large companies will sort of get over on freelancers by making you think that it's a work for hire when it isn't okay so let me explain to you what it actually is ah work for hire actually has to do less with you as the worker and more has to do with the rights of the work right? So it's dealing really with the status of the work and not necessarily your status as the worker so when you perform a valid work for hire, you are essentially transferring all ownership of that intellectual property to you know the party who you are in a contract with now this is something that happens automatically if you're an employee so if you work for, you know design studio if you work for any company in which you performed design or any day have visual arts most likely anything that you're creating within the scope of your employment is a work for hire, meaning that your employer owns it okay on dso that's pretty easy to understand right but the other way to get a valid work for hire is toe have a written agreement with a valid work for hire clause so here the elements of a valid work for hire clause it has to be in writing if there's no signed written agreement then there's no valid works for higher clause okay, so always always has to be in writing always always has to be assigned writing it's a requirement, and the works have to fall under one of the nine categories. Now aa lot of people will create these, you know, contracts, that's a work for hire, and they'll have work for hire language in it, but it doesn't fall under one of the nine categories, so both of these elements have to be met. If only one of them is meant then it's not a valid work for hire, it has to be both one and two. Okay, so let me tell you what the nine categories are. Um, the nine categories are contribution to a collective work, like a magazine or a website or, you know, a newspaper, so it has to be you're making a contribution to a larger work, part of a motion picture, a translation, a supplementary work like an appendix or an index a compilation s o that would be sort of like an anthology with different works coming from different authors. A textbook attest? Answer material for a test or randomly enough, an atlas. Don't ask me how the copyright office comes up with this stuff, but basically those air the nine categories for valid works for hire. So if you're not in one of those categories, then it's not a valid work for hire. So for designers, your work will probably fall under a contribution to a collective work like a magazine or a web site. Web sites can often be collective works because you probably have a copywriter who's writing the copy on dh, then there's a designer who's doing all of the design. Then you probably have a developer maybe developing the code if you don't do that to eso there's, you know, maybe there's also a photographer who took the photos that are going to be on the site. So ah, website can often be unusually is a collective work. And so when you're creating a website, it does fall under one of the nine categories. Okay, so that means that if you have somebody working for you, if you have a valid works for higher clause with them, then you can own the aip. Ok, so that's, what I want you to understand. So let's, look at a clause for an independent contractor. If you have somebody working under you, this is a clause that you wanna have in your independent contractor agreement with them, and that makes it clear that there are contractor working for you. The things that are going to be in there are, like, you know, what kind of work they're going to do for you what the timeline would be you know who their supervisor is going to be which is most likely you how much you're going to pay them in one um weather going to pay them in full or overtime or you know those kinds of things and then you also you know you want to have that boiler plate like we saw earlier with the incline service agreement you want to have that stuff in your independent contractor agreement too andan you also wanna have intellectual property transfer clauses and this part is the most important part now just to tell you quickly where you can get an independent contractor agreement this is something that my firm charges a thousand dollars to draft a independent contractor agreement for our clients so that's another example just to give you a sense of like what the fees are there not astronomical so it's not like impossible for you to protect yourself okay but if that's really expensive for you another option is to find a reliable template like we talked about earlier like I said earlier my small business bodyguard legal click also in could include a client sorry an independent contractor agreement template ok so that's one place where you could get it and professional organizations for designers freelancers there's a freelancers union these types of professional organizations often have templates customized to the industry that may be useful to you oh, and they're usually there's usually a few to purchase them but it's not as much as you'd pay a lord or drafted for you from scratch so those are some reliable places to get yeah, an independent contractor agreement but make sure you have one if you're hiring subcontractors always always always ok do not skip this step because like we said it's all about protecting your intellectual property and making sure you are controlling the ownership of that I p at all times and with everybody involved okay, so let's look at this intellectual property transfer clause here's what it says the contractor acknowledges that it has no right to or interest in its work or product resulting from the services performed here under nor any of the documents, artwork or other materials created by the contractor in connection with such services or any right to our interest in any copyright related to those services. So what does that say that's saying that your contractor is acknowledging that it has no right to the work product? Ok, it has no right to any of the artwork, documents or any materials that they're creating on your behalf ok, so this preserves ownership for you which is what we want the contractor acknowledges that the services on the products to be created here and after referred to as materials have been specially commissioned or ordered by the company that's you as a work made for higher remember we said in order for beats for it to be a valid work for hire it has to actually have those words in it so this is showing you that that's a valid work for hire clause right when it's also falling in one of the nine categories because it's a collective work so that's what makes this clause valid so have been specially commissioned or ordered by the company as they work made for higher and that the company is there for to be deemed the author of and is the owner of all copyrights, trademarks, patents and other forms of intellectual property into such materials. Okay, so what does that mean? That means that you are saying to the contractor, hey, you're going to do this work for me and I own it and that's really important, right? Because if you have an agreement with the client, you need to be in the ownership position so that you can transfer that intellectual property to the client if you don't own it and the subcontractor actually owns it, then then you're violating that kind service agreement you have with the client where you're telling them that you're giving them either copyright ownership or granting them a license if you don't own the I p you can't give them a license, right? You're not in a position to transfer a license so you have to make sure that when other people are working for you, that you're retaining ownership rights in the intellectual property, that will result notwithstanding, the foregoing company grants contractor a worldwide nonexclusive revocable license to display the designs developed by contractor for company on lee in association with contractors portfolio. So this is granting them the right to use that in their portfolio, which of course, is optional. You could always cut that out if you don't want to give them that option. But, you know, as a general rule that's usually industry standard, where you would give them the right to use any work that they're creating in there sort of marketing and business development so they can show it to other potential clients and get other business. So here's, another piece of this right? So the first part that we looked at just now, this one this is the work for hire section. This is the part that saying this is a work for hire, but because so many works for hire are not valid because they don't fall in one of the nine categories, what you usually want to ada's well is an actual transfer clause, so what this does is if the works for hire is not valid, this will come in and save the day. Now this is different, all right? So let's read it. And so then I'll explain to you the difference between who works for hire a clause and then this intellectual property transfer clause in the event that the intellectual property rights to such materials or any portion thereof are for any reason deemed not to be owned by the come honey, the contractor here by a signs to the company any and all right title and interest contractor may have in and to such materials including all copyrights, trademarks, patents, all publishing rights, and all rights to use, reproduce and otherwise exploit the materials, and any in all formats or media and all channels, whether now known or hereafter created, what did that just do that just said that if that works for higher on the previous page, that previous section that's also going to be in your agreement, if that's not valid, then this is going to come in and still transfer the copyrights to you. Now this is very different, though a works for hire if it's valid, it means that you are the mama of that design, right? That makes you the owner, right? So you can go ahead and register the copyright for it as the creator now that's different than when you're transferring I p when someone either you or your contractor transfers aip do it's a limited license, right? So you're they're transferring the ownership to you but it's for a limited time period copyright law actually says that transfers are valid for a thirty five year period and then after that the original owner khun take that content back, right? So for our purposes, most of you know, your intellectual property is, you know, not necessarily going to be really, really important to protect in thirty five years, right? So for most purposes and intellectual property transfer is sufficient, but works for higher is better because you have ownership forever. Okay, it's not something that the contractor could ever take back, but if it's a transfer, which is different than a work for hire, then the contractor could take it back after a thirty five year period. Ok, and there's some rules about how to do that. But the whole purpose of that is because there were illustrators like, um, people who created it, I think it's the superman story or there's a couple of different, really famous artists who created these stories and illustrated, you know, these comic books, and then they turned into huge movies and franchises and, you know, people made millions and billions of dollars off of this franchise, and the artist never got paid because they inadvertently transferred all of their rights to this other company and so what copyright law did to protect artists? Remember I said copyright law is there to protect you intellectual property that law is there to protect artists and entrepreneurs and inventors so what now we have and copyright law is a limitation on transfers so if you as an artist transfer your rights to another company for a thirty five year period that's the limitation so even though there's you know this it doesn't say thirty five years right? It doesn't say that you could ever get it back doesn't matter because the law trumps whatever's in this contract federal law and federal law says that after thirty five years you could get that back, so if you transferred something to someone and became a famous painting or a famous illustration or famous in some way no that you can actually get those rights back later on all right and also know that if you're hiring a contractor to work under you, they could also get those rights back later on. Of course it's much later on thirty five years is obviously a long time, but I just want you to understand the way I pee law works so you know what's happening who owns the I p at any given stage ok, so when you're working with independent contractors, you wanna have the works for higher claws and then you also want to have this intellectual property transfer just in case for some reason the works for higher clauses found invalid usually the reason it would be found invalid is because it doesn't fall under with one of the nine categories that we discussed now this is one other thing that you want to include in your independent contractor claws this is dealing with intellectual property infringement now we looked at another version of this that we I talked about earlier with clients so this is something that is very very similar to the clause that you would including your client service agreement so that you know if a client provides you with content that belongs to a third party and you get hit with you know, intellectual property lawsuit or sent to cease and desist that client is required to indemnify you ok that means that they are responsible and that you are not so this clause is exactly the same except it's written tio you know deal with contractors who might provide you a third party content right? So if you hire an illustrator you don't know their process necessarily you give them an assignment in own weak they will provide you with you know uh the finished product and so you take that finished product and start incorporating it into your overall design. Well, what happens if that contractor actually stole that illustration? You have no idea so you want to always make it so that the contractor is responsible for making sure that any content that they're handing off to you if they have a right to use that and then it's not infringing on anybody else's intellectual property rights so that's what this clause does let's read it contractor acknowledges that it is contractors sole responsibility to ensure that all tools information, documentation, photos, artwork, written copy or other materials including materials provided by contractor collectively materials do not infringe on any third parties intellectual property rights okay, so you're making it their responsibility and you're also making it so that they're going to indemnify you should something go wrong and you know there actually be a third party uh, infringement claim okay, so so that's how you know those are some clauses that you want to make sure you're including with your subcontractors if you're working with other people and just also make sure you're reading any contracts that you enter into if you're ever the subcontractor you know if you're working on a team okay, so that you understand when you're creating artwork, how can you use it? Are you reserving that right? Are you giving it away okay? And that sort of helps you to decide how you're going to do that like, for example, if you have a situation where you're working for, you know, another company and you're going to do some artwork for them, you might decide you know what? I'm going to not incorporate this other artwork that I have the copyright to that I've done earlier, I want to preserve that so that I can use it in other ways and be able to, you know, sell it in different ways and license it out. So I'm not incorporating that into this project. I'm gonna create something new, something that sort of limited. And I'm not going to take, you know, my best stuff that I want to be able to use in different ways and incorporated into this, because if I do that, then I'm essentially giving it away to this client. If there's a valid works for hire, or if there's an intellectual property transfer, okay, so that's. Why? I say, you know, all decisions that you're making in your business is through the intellectual property lens.