Who Owns Your Website? Unpleasant Surprise on the Internet

Often, we see people learning this lesson the hard way, when the web designer refuses to allow the web site to be copied or used as a template for another site. Or worse, sometimes the web designer attempts to extort you, the very party who paid him or her.

How can his happen? After all, you paid cash for the development. You may have entered into an agreement, prepared by the web designer, that spelled out your designer’s duties and obligations. It doesn’t seem logical and it certainly doesn’t seem fair that you, the principal, wouldn’t have complete ownership and the right to use the web site materials any way you wish. It may not be fair, but unfortunately, like certain other situations, it’s legal.

Enter the Copyright Act

Our Founding Fathers included an important provision in the U.S. Constitution that went into effect in 1789. It stated that Congress had the power to secure for authors for limited times the exclusive right to their writings. This provision was to protect the individual artist from unfair copying of his or her creative work. The original Copyright Act was enacted in 1790.

The Copyright Act lists an ever-growing number of “writings,” now called “works of authorship,” that are protectable under our copyright law. In 1790, the list included only maps, charts and books. In the years following, the list was expanded to include prints, dramatic compositions, photographs, music and choreographic works, motion pictures, sound recordings, works of authorship from which works can be perceived, reproduced, or otherwise communicated with the aid of a machine or device, computer programs, and architectural works.

Under the original Act, and surviving to this day, is the clause, “the owner of copyright… has the exclusive rights to do and to authorize” a number of activities, including reproduction of the work and preparation of works that are derived from the original.

But Who is the Owner?

Since it is clear that the owner has exclusive rights (i.e., the right to exclude others), the question is who is the owner, especially of works that are commissioned by another party.

Case law has settled the question (for now), holding that, absent an agreement to the contrary, the individual who creates the work is the owner of the copyright. For example, you may pay a composer to compose and perform a single song for your video production, you may hum a vague tune or convey the sort of lyrics you want, and he may merely play the music and sing, but it is he, the composer, who owns the copyright rights and you will not have the right to make a copy of his recording for yourself.

As another example, you may provide all of the text and images – still or moving – for a web site, and even give the web designer detailed directions to arrange those images and text on the computer screen. Of course, you agree to pay the designer possibly an exorbitant amount of money for his services. But it is still the web designer who owns the work.

As unfair as it seems, this outcome is entirely consistent with the Framers’ intent to reward creativity by giving the author exclusive rights to his work.

Exception to the Rule

As the 17th century vicar at Oxford University was fond of saying, “No rule is so general, which admits not some exception.” Here’s the exception to the general rule of copyright ownership: if the “author” is your employee, you own the copyright rights. How will a court know if the author is an employee? A line of cases culminating in a 20-year-old U.S. Supreme Court case, CCNV v. Reid, spells out factors that would lead a court to conclude there is an employer/employee relationship. Factors, among others, to be considered include whether you withhold taxes from the designer’s pay, and whether the designer uses your equipment and materials to do his job.

Even if a designer is clearly not an employee, a written agreement signed by him or her can take care of the situation. If both parties agree that the work is a “work made for hire,” courts will generally decide that the designer has created a work whose copyright rights are transferred to you, the entity who commissioned the work. These four magic words – work made for hire – when included in a written agreement, allow you to own the copyright rights. A well-drafted copyright assignment agreement, however, will also include a clause that expressly assigns the work to you, regardless of whether the court rules that the work was one made for hire.

Needless to say, it makes sense to reduce the agreement for web site design to writing before you make the first payment and the work begins.

Contributing editor Attorney Mark Levy specializes in intellectual property law. He has won many amateur moviemaking awards.