As a copyright lawyer I am often the one to tell new clients “Even though you paid for your website that does not mean you own it.” Because these clients paid money for their website, they think they own things like:
- The design of their website;
- The software code behind their website;
- Their domain name;
- The graphics on their website;
- The other content on their website;
- The terms of use and privacy policies on their websites.
Most clients think they are obtaining an “assignment” of these things when they write a check. They are shocked to learn that the people they paid to create these things actually still own them. Intellectual property laws are designed to protect the creator, to encourage the creator to create. If you hire someone to design a website for you, what you are actually purchasing is a “license” to use the design for the use intended by you and the designer.
What is the difference between a license and an assignment? With a license, you cannot usethe design for something beyond what you originally contemplated with the designer without paying additional money. With a license, you cannot sublicense the design, use it on another website or prevent the designer from licensing the exact same design to your competitor for a small fraction of what you paid.
Similar problems arise with software code, graphics, photos, terms of use policies and other content created by third parties. If you have your employees create these things as part of their job, your company the works are deemed to be “works for hire” and your company is the “author” of the works by law. You do not need an assignment, because the copyright originally vests in your company. Knowing this, seemingly knowledgeable intellectual property attorneys try to apply this theory to independent contractors by contract. The law, however, does not allow these types of website items created by independent contractors to be “works for hire” under the law.
If you want to own all of the rights in the copyright, you need to obtain a written contract, which includes and “assignment.” If you broach this subject with your website developer before you sign any contract, an assignment will often not increase the contract price. If you broach the subject after you have paid, however, the cost of an assignment may be tens of thousands of dollars.
For some items, like terms of use and privacy policies, you may not even need an assignment. You could of course pay an attorney to write a policy from scratch that he or she would never use again. Such “one-off” contracts however, would likely be ten times more expensive than having the attorney merely customize an existing policy they have in their files from which they might obtain some benefit from modifying again in the future. For most legal information on your website a license is typically much more economical than an assignment.
With regard to domain names, be sure that whomever you have register the domain name, that they register it under the name of your company rather than theirs. You might not notice the difference until the time you want to move your website to another host service and your web hosting service refuses to release the domain name they registered to themselves, rather than you.
For third party content, including pictures, graphics and charts you find on the web, it is best to avoid incorporating them into your website, even if you feel they are in the public domain or that the use is a “fair use.” Many companies have had to pay huge royalties for the use of material a third party posted online as public domain without the authorization of the true author.
One final note, keep an updated back-up of everything on your website. It is not worth a dispute with a designer or web hosting company shutting down your website during negotiations. Nothing ensures good
faith negotiations more than having your own copy of your website code.
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