Who Owns Copyright in Work Done by an Ontario Contractor?

Many Ontario businesses pay a freelancer to create a logo, build a website or write software, and assume that paying the invoice means they own the result. Under the Copyright Act, that is often not the case.

This article explains the default rules, why the difference between an employee and a contractor matters, and what to put in writing so your business actually owns what it paid for. It is general information, and a lawyer can review your situation and your contract.

The starting rule: the author owns it

Under the federal Copyright Act, the author of a work is the first owner of the copyright. That means a freelancer who creates a logo, website or software owns the copyright unless it is assigned.

Paying for the work does not by itself transfer ownership. Unless the copyright is assigned, the author remains the first owner, and what you are allowed to do with the work you received depends on what was agreed. How far that right goes can be unclear, which is one reason to deal with it in writing.

Employees and contractors are treated differently

Where a work is made by an employee under a contract of service in the course of employment, the employer is the first owner, absent an agreement to the contrary. This default does not cover an independent contractor.

How this applies to your working relationship depends on your situation, so it is worth confirming with a lawyer before relying on the employer default.

How to secure ownership in writing

An assignment of copyright, or a grant of an exclusive licence, is valid only if it is in writing signed by the owner of the right or the owner's duly authorized agent. A handshake or an email exchange that is not signed by the owner may not be enough.

A contractor agreement that deals with intellectual property usually covers the following points.

• A written assignment of copyright in the finished work, signed by the contractor.
• If you only need exclusive use rather than ownership, an exclusive licence, which must also be in writing and signed.
• A written waiver of moral rights, since these cannot be assigned.
• A clear description of what is covered, such as the logo, the website design and the source code.
• A statement about any third-party material, such as stock images or open-source code, that the contractor uses.

Moral rights: the part people forget

An author's moral rights cover integrity, attribution and anonymity. They cannot be assigned, but they may be waived in whole or in part. For that reason, a contractor agreement should include a written moral-rights waiver.

Without a waiver, the author may still be able to object to certain changes or insist on being credited. For a business that plans to update its website or modify its logo over time, that is a real practical concern.

What to do next

If you are about to hire a contractor, put the intellectual property terms in the agreement before work begins. If the work is already done, you can still ask the contractor to sign an assignment and a waiver afterwards, though that is easier when the relationship is good.

• Find out whether the person is an employee or an independent contractor.
• Check any existing agreement for a written assignment signed by the contractor.
• Add a written assignment of copyright, or an exclusive licence if that is all you need.
• Add a written waiver of moral rights.
• List third-party materials used in the work and how they are licensed.
• Keep signed copies of everything with your business records.
• Have a lawyer review the wording if the work is central to your business.

Frequently asked questions