1. Contractors and employers

The law, particularly in relation to the ownership of intellectual property, differs markedly depending on whether you are an employee or a contractor.

Whether or not a person is an employee or contractor depends on:

(a) the contract of employment (if it exists) and what the person is called;

(b) the actual work done;

(c) the work environment; and

(d) the method of payment of remuneration.

A court may deem a person an employee rather than a contractor despite a written agreement between the parties identifying the person as a contractor.

2. Ownership of economic intellectual property rights

Generally the ownership of any intellectual property created vests in the creator of the work. However, the intellectual property in any work which is created by an employee in the course of employment usually vests in the employer.

If an employee creates an original work for employer, then as a general principle (subject to exceptions) the employer owns the copyright in the work created.

Generally, if a person commissions a person other than an employee to create an original work, the person does not own that work unless the creator formally assigns their copyright to the person. The assignment must be in writing and signed by or on behalf of the creator. Important exceptions to this rule relate to photographs commissioned for a private or domestic purpose, such as family portraits, films and sound recordings.

3. Joint or divided ownership of copyright

Copyright ownership may be joint (a work produced by two or more authors) or divided. Copyright is divided in a case, for example, where a newspaper has copyright ownership of work created by a journalist and published in the newspaper, but the journalist retains copyright ownership with respect to publication of the material in a book or film. This outcome may be changed by contrary agreement between the parties.(1)

4. Moral rights

Moral rights are personal rights and are not transferable. If copyright subsists in any work created by an employee, then moral rights will also subsist in that work. Unlike copyright, however, the employee will own the moral right whereas copyright will usually be owned by the employer if the work is created during the course of employment.

Moral rights are not transferable and the legislation which introduced moral rights(2) does not provide for waiver of moral rights. The author may give written consent (ranging from specific to comprehensive consent) to any or all acts or omissions that would otherwise constitute an infringement of their moral rights. A written consent may govern works in existence, in process or to be commenced.

It is a defence to an infringement of moral rights if the alleged infringer can show the infringement was reasonable in the circumstance. The factors relevant to determining what is reasonable vary with the type of moral right infringed but generally include:

(a) the nature of the work;

(b) the purpose for which the work is used;

(c) the manner in which the work is used;

(d) the context in which the work is used;

(e) any relevant industry practice;

(f) any relevant industry practice contained in voluntary code of conduct; and

(g) whether the work was created in the course of employment.

An employer will not breach the moral rights of an employee where it is reasonable not to observe the moral rights of the employee in the circumstances.
See Moral Rights Fact Sheet.

5. Managing legal risk

(a) An employer should include in an employment contract that the employee give consent to any acts or omissions which may otherwise constitute an infringement of moral rights.

(b) An employer should obtain written assignment of copyright from employees at the commencement of their employment to minimise any downstream disputes over copyright ownership of material created in the course of the employment.

(c) If you hire a third party website developer (who is not your employee) to develop a website for your business you should specify in the contract with the developer that any intellectual property would be owned by you and not the developer. If you fail to do this the intellectual property belongs to the developer.


Other relevant Articles on this site:
Website development agreement

Other relevant Fact Sheets:
Copyright
Moral Rights
Online Contracts
Workplace Net Control 

End Notes
(1) Copyright Act 1968 section 35.

(2) Copyright Amendment (Moral Rights) Act 1999.