Freelancers' Questions: Is my client exposing me to an IP rights challenge?

Freelancer’s Question: Please help, as I’m starting 2021 much as I finished 2020 - confused and concerned!

Freelancers' Questions: Is my client exposing me to an IP rights challenge?

Partly this is because I’m relatively new to freelancing, having worked in-house, full-time for a number of years. But it’s also because of the situation itself!

Specifically, I have worked on a few projects for a new business, mostly creating marketing materials and social media posts. But the client has asked me to improve and hone some artwork, and that artwork was done by a ‘Mr X’ who my client no longer wishes to use.

My design brief is to create ‘something similar’ and she (the client) has provided Mr X’s .png files. This is ringing alarm balls, as to whether my client has the relevant Intellectual Property Rights (IPR).  

I have broached the subject, saying that ideally I'll need vectors and that a conversation with the previous designer (Mr X) around the IPR should be sought. But I gather the client does not want to do either and I fear I'm going to have to refer the client to the original contract with the designer to ascertain whether she has the IPR on the works. My worry is that if I don’t do this and instead just accept the work, I will be leaving myself open to IP problems and challenges later on. I really want this freelance contract but must protect myself from any infringement risk. How should I proceed?

Expert’s Answer: Firstly, I think it's important that you appreciate the position regarding copyright vis-à-vis ownership. The law is contained in the Copyright Designs and Patents Act of 1988 and in particular section 9.

The legal position (explained)

Section 9 details matters concerning ownership. It is usual where there is an employer-employee relationship that the first owner of the work will be the employer. However in many circumstances, the owner of the work will seek to farm out or commission the work to a third party i.e. a contractor or freelancer.

In this case, the contractor/freelancer will be the first owner of the copyright and in the absence of any contractual provision, the designer will seek to claim full legal ownership to the work.

Entitlement, restrictions and assignment

Now, the contractor/freelancer will be entitled to an implied licence, presumably because they have paid for the designs, but this does not mean that they can (for example) automatically sell these designs to a third party or make any changes to them.

So it is important when commissioning any work externally that the relevant parties have a contract in place, known as a Copyright Assignment, which ensures that the work that was commissioned is legally assigned to you (the contractor/freelancer) on receipt of the monies paid for the contract for services.

The Dr Martens case

A useful case in this regard can be found at The Court of Appeal, which recently upheld a first instance decision which gave the owners of the famous “Doc Martens” footwear brand the copyright in a combined “Doc Martens” / “Airwair” logo. This was despite the fact that the contract between the owner and the artist remained silent on the subject of copyright ownership.  As you may be aware, Section 9 of the Copyright Designs and Patents Act 1988 states that the owner of the copyright is the person that creates it.

The Court of Appeal affirmed the first instance decision, where the judge had ruled that:

“It seems to me that when a freelance designer is commissioned to create a logo for a client, the designer will have an uphill task if he wishes to contend that he is free to assign the copyright to a competitor.”

What Mr X might take from the verdict

So this, in essence, means that the designer you speak of, Mr X, will not be free to sell to anyone -- but at the same time, one would probably encounter the same difficulties in any attempt to amend and/or change that fact!

Finally, here’s a top tip which may help other end-users of freelancers from getting in this potential pickle:

If you don’t employ the person, you will need a copyright assignment.

A special offer...

Should a copyright assignment be of interest to you, our legal firm can offer such a Copyright Assignment document, plus explanatory notes, for £50 (excluding VAT), for a limited time only, exclusively for FreelanceUK readers.

The expert was solicitor-advocate Michael Coyle, director at Lawdit Solicitors, which specialises in IP and internet law.