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What You Need to Know About Copyright Ownership in Outsourcing

May 18, 2017 Claire Ponsaran
What You Need to Know About Copyright Ownership in Outsourcing

Copyright ownership and its evil twin, infringement, are major concerns for companies that outsource parts of their operations to an offshore provider. Most outsourcing companies can be trusted to provide contracts with a fleshed out copyright clause to cover issues regarding intellectual property.

But, if you were new to outsourcing and you’re not sure what kinds of work produced by your offshore staff would you have legal rights to own, modify and use for commercial purposes, then this list could help to you.

#1 Do not automatically assume that you have copyright ownership over the works of your offshore staff without a contract.

Make sure you have a contract that explicitly states you own the copyright for all the works produced by your offshore staff while they’re working for you. Otherwise, your staff will remain the true copyright owners of their work by default.

Under [each country’s] copyright laws, the owner of the original work is entitled to economic rights and moral rights. Economic rights enable the creator to receive profit gains should his works be distributed by third parties. Moral rights, on the other hand, protect the connection between the creator and his work.

And, this ownership could last for nearly a hundred years if you failed to secure a valid agreement.

If you outsourced to the Philippines, copyright to anonymous works or works made for hire shall be protected for fifty years from the date the work was first published. In case the author’s true name is made known before the 50 years are up, an additional fifty years are added to the duration of copyright protection.

#2 Works made for hire are produced by an outsourcing worker while employed by an offshore provider but may be owned by the client who commissioned it.

Outsourcing workers are neither freelancers nor independent contractors. They’re employed by the offshore provider, but it’s not the provider who eventually owns the copyright over the staff’s work. It’s the client who commissioned the services of the outsourcing staff through the assistance and supervision of the provider. In essence, copyright ownership is not transferred from provider to client but immediately goes to the one who paid for the work to be done.

#3 In a managed outsourcing model, clients only retain control over how and when the work is done.

Clients that outsource not only pick up the copyright ownership tab as soon as their offshore staff’s work is done. For the most part, they also have control over the way the work is done and how the schedules of their staff are arranged.

But, they don’t have copyright ownership over the procedures, workflows, and systems that the service provider utilizes for day-to-day management of their employees and facilities. These are types of content with unprotected subject matter even when they’re written in a manual and visualized in a diagram or illustration.

#4 The service provider owns the copyright to their employee’s work only when it was they who commissioned it.

In cases where the employee worked on projects commissioned by the service provider, the copyright for the resulting work will go to the outsourcing company rather than the client. At the core of any outsourcing agreement, only the work produced by the staff in the course of providing services to the client is included in the copyright clause.

#5 The employee may or may not own the copyright to anything he or she creates outside of the workplace using personal resources.

Either the service provider or the client can claim any work produced by an outsourcing employee while performing his or her job, even when it’s been done outside of the office and the employee had to make use of personal resources, including time and money.

What about a side project that the employee is being paid to do by someone else? If the side project was not done in relation to the employee’s work with the company or with someone else connected with the outsourcing provider, then copyright ownership may be assigned to the creator.

Always Put Everything Down in Writing

Before starting with outsourcing, make sure you and your service provider fully discussed the terms of the contract. And, be sure to pay attention to the issue of copyright ownership.

Standard outsourcing contracts include a provision for copyright ownership and infringement as well as a non-disclosure agreement. Based on the agreed terms, the client can demand restitution by any legal means from the offshore provider. By the same token, the provider can demand the same from the client in case their legal rights to any intellectual property they own have been violated.

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