This article was first published in the Copyright and New Media Law newsletter.

Most businesses and organizations hire, at one point or another, web-savvy persons to design a website or blog, and perhaps even an e-commerce site for their business. Whether you use professional agencies and studios, crowdsourcing sites, college students, or your cousin’s teenaged daughter, you and this creative person need to make an agreement as to each party’s obligations with respect to the relationships and, as well, responsibility for copyright clearances and clarity on copyright ownership. Setting this out in writing prior to the work start-date is always best.

Copyright Ownership

The bottom line rule on copyright ownership, and one that often is misunderstood, is just because you paid to have your website designed does not mean that you own the copyrights (and other rights) in everything specifically designed for you. And what are these many elements on which ownership may be pivotal? Think both applications and content: things like the interface design, graphics, fonts, HTML code, content (text, images and more), databases, and scripts created for your digital space.

According to most copyright laws, it is the person who actually created the work who is the author of the work. Unless a true employment relationship exists between you and the web designer and the creation of the website is within the scope of such employee’s duties, the author of the work is also the first owner of copyright. This means that the only way for you to obtain copyright in what the designer creates is to enter into a written assignment or license agreement with the copyright owner.

Other key matters that your agreement should address are set out below.

Third Party Content

Third party content is content used on your new digital space but to which neither you nor your web designer owns any rights. It is commonplace to see a web design agreement address the issue of third party content. These provisions should address issues like the use of images found on Google. Many do not understand that Google images provides a service’the location of suitable images; however these images are protected by copyright, and you will need to obtain permission to use these images and other third party content. Who will be responsible for clearing such rights – the designer or you? Who will pay for these clearances? And is there a specific rights clearance form to be used in each instance of third party content? These are all issues that should be addressed in your agreement with the designer.

First and foremost, your contract with the designer should include a provision that would disallow the use of third party content unless you approve each such use.

Your agreement should also contain indemnification provisions. In other words, the designer must undertake to compensate you for any losses that you may incur if you get sued by someone whose works the designer used for your website.

Remember, you cannot tell the copyright owner to sue the party that you dealt with – i.e., your designer. It is you (or your company) that is using the work without permission. It is you (or your company) that will get sued. All you can do (after being sued) is to then turn around, as it were, and request compensation from the party (your designer) with whom you dealt. This issue is exacerbated if your designer is in a different country than you, which in legal parlance, is called a different jurisdiction. For example, if you get sued by a third party content owner, it is very unlikely that you will be able to recover your money from your designer, even if you have included an indemnification provision in your designer’s contract, from someone, let’s say, in Pakistan whom you have never met.

Moral Rights

Unlike the economic rights set out in a copyright statute, the “ownership” or entitlement to moral rights cannot be transferred in an agreement. Only an author (even if they have transferred ownership of the economic rights) of a work may also have moral rights in his creation. Moral rights vary from county to country. In Canada, for example, authors of all works, even a business document, have moral rights in their works (which are waivable). In other countries such as the U.S., only fine artists have moral rights in their creations. In some countries, moral rights are the same duration as the economic rights, some expire upon death of the author, and yet in other countries moral rights are perpetual, even after the expiry of copyright.

The right of integrity is one moral right. This is the right to modify or to allow others to modify a work. Generally when you run a website, you will want the right to modify the site and although this may be an economic right (the right of adaptation), it may also relate to the right of integrity. In this situation, it is best to get a waiver of this moral right (where waivers are permitted) and be able to make any modifications to the site internally or with the help of another designer.

Another moral right is the right of paternity, which is the right to be associated as the work’s author by name, under a pseudonym, or anonymously. If you prefer not to give credit to the designer, you should agree on this in writing. There is no right and wrong route, but it is an issue that you need to resolve with the designer before you agree to hire him.

Derivative Rights

A derivative right is the right to use an existing work, in whole and/or in part, to create a new work. Although your designer is creating a website, you may find that the works the designer create for you are useful in a different context. Do you have the right to use these works in a different manner or form? What does your agreement state about making derivative works? You may want to use some of the website interface features (colors, fonts, and images) as part of your offline marketing materials (brochures, booklets, business cards).

You may also want to use elements of the design as a trademark. You may want to maintain the right to do these things without obtaining permission from the designer who created your website. Add this to your checklist of clauses to your designer’s agreement.

Exclusive Rights

Exclusive rights means that others are prohibited from using a work without the permission of the copyright holder of that work. Whether your agreement with your designer results in all copyrights in your website being transferred to you (the ideal case) or in these rights being controlled by you through a licensing agreement, you will want de facto exclusive rights to your website design. In your contract, therefore, you should make sure the designer agrees not to reuse the materials he created for your website for others. Otherwise you may end up dealing with your competitors using a very similar design.

This is also something to consider when reviewing the use of third party material in your website. If you do decide to use third party content, you should decide, when clearing the rights to use it, whether or not you also require exclusive rights to this material. For example, if the third party material is a photograph, would you be happy if this photograph were to appear, as well, on a competitor’s website?

Additional Tips

If you end up entering into an agreement with the designer, make sure it includes the following elements. While they are not particular to copyright issues, they will make for a stronger contractual agreement:

– Your contract should be in writing, preferably in a hardcopy format.

– Make sure the contract properly identifies the other party. For example: Is it an individual or a company? What is the designer’s full name and address? If the other party is an individual, consider taking a copy of their ID.

– If you are entering into a contract with a company, make sure the company indemnifies you if you are sued by the company’s own disgruntled employees or contractors. More often than not, you do not know if the company has bulletproof agreements with its own employees. What you do not want to happen is a fight between the design company and its own employees to negatively impact your business. To you, the content created by the company’s employees is third party content, unless the company can guarantee that it owns it and will compensate you for any losses if it does not.

On September 24, 2012, Mincov Law Corporation took part in the ESN Trade Show.

We had a draw for our trademark registration services with unlimited hours of follow-up communication with CIPO.

Today, my daughters Masha and Patricia helped me pick a winner.

And the winner is …

Brian Law with Accent Leasing & Sales Ltd.

Congratulations, Brian!

PS. Even though the winner's last name perfectly matches the prize, the winner was chosen by pure chance!

On September 10, 2012, New Zealand acceded to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks.

This leaves Canada the only developed country that does not participate in the Madrid system.

Which brings me back to my older post, Canada’s Participation in International Treaties on Protection of Intellectual Property.

This is to let you know that you can now view Canadian Copyright, Trademarks and Patent Regulations on our website:

Copyright Regulations

– Book Importation Regulations

– Certification of Countries Granting Equal Copyright Protection Notice

– Cinematographic Works (Right to Remuneration) Regulations

– Definition of “Small Cable Transmission System” Regulations

– Definition of “Wireless Transmission System” Regulations

– Educational Program, Work and Other Subject-matter Record-keeping Regulations

– Exceptions for Educational Institutions, Libraries, Archives and Museums Regulations

– Limitation of the Right to Equitable Remuneration of Certain Rome Convention Countries Statement

– Local Signal and Distant Signal Regulations

– Programming Undertaking Regulations

– Regulations Defining “Advertising Revenues”

– Regulations Establishing the Period Within Which Owners of Copyright not Represented by Collective Societies Can Claim Retransmission Royalties

– Regulations Prescribing Networks

– Copyright Regulations

Industrial Designs Regulations

– Industrial Design Regulations

Patent Designs Regulations

– Patented Medicines (Notice of Compliance) Regulations

– Patented Medicines Regulations

– Use of Patented Products for International Humanitarian Purposes Regulations

– Patent Rules

As I wrote in my comments regarding new Sections 17.1 and 17.2 of the amended Copyright Act, Canada will start recognizing moral rights of performers.

The changes to Sections 28.1 and 28.2 reflect this by adding references to performers as concerns infringement of moral rights.

BOTTOM LINE: This is a merely technical amendment.