Handshake Deals Are Not Your Friend

The following will make any copyright lawyer cringe: “Oh, we didn’t put anything in writing, it was done on a handshake. I paid for it, so now I own it. Right?”

No. Not right. Hence, “handshake deal” should not be a part of your vocabulary or your business practice.

Not all agreements have to be in writing in order to be valid. (Every good first-year law student learns about the Statute of Frauds, and the types of agreements that, historically, must be in writing.) Above all, in the context of copyright and creative work, however, I implore you to remember something.

Copyright transfers must be in writing.

Copyright transfers must be in writing.

Copyright transfers. Must. Be. In writing.

How Might This Apply to You?

It might apply if:

  • You have a graphic designer contribute creative work to your website;
  • You have a software developer code your great new app; or
  • You have a studio musician play on a track,

…and you pay that individual, but you do not have a signed contract in place. Specifically, a signed contract that contains “work for hire” or “copyright assignment” language.

So, if you don’t have it in writing, you might be able to argue that you have a license to use whatever that contractor delivered to you, but you don’t own that content. This could be a big problem in the following scenarios:

  1. You try to register your work with the Copyright Office (which requires you to list the “author” of the work). Who is the author without an agreement? It might be the contractor.
  2. You try to sell your business or intellectual property portfolio down the line and have to warrant (promise) that you own all of the content that accompanies the deal. Can’t warrant that you own something if you don’t own it!
  3. You find out the contractor you used to create this work has licensed it to someone else. After all, without a signed writing that states otherwise, his argument is that he owns it.

Handshake No, Writing Yes

(Work-for-Hire and Copyright Assignment Agreements)

In the absence of a signed agreement, ownership in a creative work belongs to the author or contributor (so, the graphic designer, the software developer, the studio musician, etc.). Section 101 of the Copyright Act of 1976 defines a work made for hire as a work prepared by an employee within the scope of his or her employment; or a work specially ordered or commissioned for use as:

  • A contribution to a collective work;
  • A part of a motion picture or other audiovisual work;
  • A translation;
  • A supplementary work (e.g., forewords, afterwords, and other works prepared adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work);
  • A compilation;
  • An instructional text, a test, or as answer material for a test; or
  • An atlas

But, the above apply only if the parties expressly agree in a written, signed document, that the work will be considered a work made for hire. Also, some things may or may not fall under one of the categories above, depending on how they’re used. See how tricky it can be? So, it’s also smart to ensure there is a copyright assignment clause that applies in such a scenario, just in case the work is determined not to have fallen under one of the categories above.

The Point: A handshake deal (or any type of arrangement involving creative services where there is no signed writing) is not your friend. Consequently, when you have someone contributing creative work on a project, it’s probably in your best interest to get your arrangement in writing in order to ensure that you own what you’re paying for.

What’s next? Click here to download your [free] Essential Legal Checklist from Spear IP.

Pin this post: