Retaining the Copyright: Protecting Yourself or Holding the Client Hostage?

John Tabita

Dolly Parton wrote and recorded her hit song, “I Will Always Love You” in 1974. Soon thereafter, Elvis Presley approached her, wanting to record it himself. Dolly was thrilled … until Presley’s manager told her it was “standard procedure” for the songwriter to sign over half of the publishing rights (and half the profits) to any song Elvis recorded. Parton refused. Over the ensuing years, she imagined how an Elvis version would have sounded and wondered if she’d made the right decision. But in 1992, the song was recorded by Whitney Houston and used in the film, The Bodyguard. It became a huge crossover success, propelling Whitney to stardom and making Dolly millions in royalties.

Dolly Parton chose to hold onto her copyright, and it paid off. You may not be a budding songwriter wondering if you should do the same. But as someone that creates content, how should you handle issues of ownership and copyright? Retain all rights, like Dolly? Or is it more realistic to assign the copyright to your client?

[Disclaimer: I am not an attorney. This article is not intended to take the place of legal advice. The information here applies to U.S. Copyright law and may differ from country to country.]

U.S. Copyright law states that the creator of a work owns the exclusive rights to that work from the moment it’s put into some tangible form. Simply put, copyright is the “right to copy” (i.e., reproduce) an original creation. The mere fact that the client paid for the work does not automatically assign him ownership. This means that, unless you are working as an employee rather than an independent contractor, anything you create—be it logo, website, or some PHP code—belongs to you … unless you specify otherwise.

This is why having a contract is so vital. Lacking one, the client might assume everything you created belongs to him. Your contract should state, in no uncertain terms, what belongs to whom. That begs the question: Should I retain the rights to what I’ve designed or built?

How that question gets answered depends largely on who you’re talking to. I recently had a conversation with Jon Valk of Jon Valk Design. He explains his reason for retaining full rights to all his print designs:

… for me the biggest reason to retain copyright is to prevent my design from being butchered. Clients buy reproduction rights, not the physical design. It’s always been that way in my experience (with print design, anyway). The GAG [Graphic Artists Guild] totally supports this and says it a lot better than I do here. Protecting the integrity of that design is the biggest reason to hold onto the copyright. My designs equal my reputation. If a client wants to pay me enough for me to give that up, I would do it.

Coming from a print design background, I understand this completely. If a client has full rights, not only can he reproduce the design, he can also modify it. Once I transitioned to web design, however, I found that my thinking needed to change. My first few websites were like “works of art” in my mind, but my clients viewed them as a business tool, not art. So surrendering control of my design and risk them breaking it (which a few did) was a necessary part of the web industry.

With print design, it’s easier to maintain this copyright model. The Internet, not so much. But before you give away the entire farm, consider how your client might reuse what you’ve created. For example, it’s not unreasonable for your client to expect to be able to “reuse” your logo design on his advertising and marketing material. He’d also expect to reuse the database-driven membership management application you developed, and not have to pay you a fee each time he logged in. But unlike that unique logo, the web application has the potential to be not merely reused, but resold. Assigning him full rights means he could potentially [1] resell the application himself and not owe you a dime and [2] prevent you from reselling the application to another client. That’s not a good position to be in.

Be sure your client understands his usage rights upfront; otherwise, you both may be in for an unpleasant surprise. Having a client feeling like you’re holding his design hostage may land you more ex-clients than current ones. As a rule-of-thumb, here’s my take on what I would and would not give away:

Items I would give the client full usage rights to:

  • Website front-end design (i.e. design, layout, graphics, text, and HTML)
  • Marketing collateral and corporate identity such as logos, business card, brochures, etc.
  • Source files for any of the above (i.e., .psd or .fla files)

Items I would not give the client full usage rights to:

  • A unique photograph or illustration
  • Any code that actually qualifies as being an application
  • Anything that could be resold by me or the client

What about you? Are usage right something you haven’t give any though to? What do you keep and what do you assign to the client? Post your comments below.

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  • http://www.accretewebsolutions.ca/ S Emerson

    “Be sure your client understands his usage rights upfront; otherwise, you both may be in for an unpleasant surprise. Having a client feeling like you’re holding his design hostage may land you more ex-clients than current ones.”

    I would agree it is the responsibility of the designer and the customer to be perfectly clear on what actually own and what the designer wants to retain copyright/ownership of.

    Too many jobs are done where this is not established ahead of time and only comes up when the client asks for the original files for the artwork as an example.

  • Brian

    I’ve only had contracts with about half of the people I’ve made websites for, and usually it has been they that are the ones that wanted the contract, so that’s why we had one. The thing is, even with a contract, you can still be sued, and your ability to defend yourself may come down to how much you can afford to pay an attorney. If somebody that is really rich sues you, you’d be far better off settling out of court, and as soon as possible. Having seen what a long drawn out lawsuit can do to a good friend of mine, I can tell you that even if you think you’ve done well, the only person that really does well is your attorney. If you are suing somebody else, the same is true. Unless you can get them to pay your attorney’s fees, you might end up owing your attorney more than the lawsuit is worth.

  • Charles Homan

    Nice job laying out the basics. As a lawyer AND a dev/design guy, I appreciate you writing this piece. as an added benefit, I’ve found I can tier my product offerings into “standard” and “buy-out” levels based on the rights to be granted to the purchaser. In my experience, clients tend to understand the reason for and accept much higher prices for “buy-out” rights once the issue is properly explained. Of course, not everyone “gets it” at first but it’s worth taking the time to try to help clients understand.

  • http://www.optimalworks.net/ Craig Buckler

    Great article, John. I suspect it’ll depend on which discipline you’re most skilled at and what you value most. For example, a graphic artist may want to retain rights to a logo more than any code they write. Similarly, a developer would value their code more highly than a photograph.

    In my contracts I grant full usage rights to any visual or audio media specifically created by me for the client, e.g. logos, photographs, videos, etc. With website and application code, however, I retain the copyright but grant the client an indefinite license to use or modify it (most don’t). I also recommend stipulating that the software cannot be sold in full or part to a third-party without permission — even if the company is sold or put into liquidation.

  • http://wiechers.ws Jens Wiechers

    Hello John,

    your disclaimer is well noted, but I thought I’d chime in because it’s an interesting topic for people hailing from all around the world — and given the fact that you can quite easily contract a web design company from across the pond, it becomes a really interesting legal salad bar.

    Many European legal traditions don’t in fact allow for the conundrum you state, taking the view that one cannot sell one’s “copyright.” Instead, when you develop an application, design, website, etc., for a client and only for that client, you will usually negotiate, up front, that you’ll grant them an exclusive usage licence which may extend to them the right to, essentially, do as they please with your design which may be anything from a short piece of text describing the company up to their logo and marketing material.
    The German and, if I remember correctly, French Wikipedia had a bit of trouble with the original GNU-FDL licensing, in part due to differences in how copyright is implemented and the GNU licence was challenged and mercifully held up most of the time in at least Germany, Italy and France.

    In my mind, the continental way has always been the tidier, if more legalistic and bureaucratic, solution to the problem: because when you do create something, while others may use it, it is inviolable fact that you created it.

    Regards,

    Jens

  • http://smallbusinessmarketingsucks.com/ John Tabita

    Thank for your input, everyone. You’ve all brought up some good points. Obviously, this can be a complicated issue, one that clients will have a hard time understanding, unless we take the time to explain it … which is why it’s so important not to shy away from discussing it upfront.

  • http://www.futprimitive.com Barbara

    I literally just had a usage rights issue with a client. It was a tad touchy and I gave it some serious thought on how best to proceed with the approach that it may have simply been an oversight on the client’s part. They immediately called AND emailed me apologizing for potentially stepping on any toes and requesting that I send them an invoice so that they may promptly pay accordingly. I am sooo grateful that it went in a positive direction!!

    While I feel that I have covered Copyright quite well in my contract, reading some of this info has brought to light a few areas that would likely be good for me to modify. However, I do generally retain all rights unless folks want to pay more for a buy-out.

    Thank-you for the great article!

  • http://www.sensibleweb.co.uk P Sense

    Having been in the industry for 10 years now, I have seen clients come and go. When leaving for good, I have always agreed to hand over the website files at low resolution but not the actual graphic designs in Adobe, unless pushed and then negotiate a fee.
    To refuse totally or to charge extortionaltely will damage a designers reputation in the medium term.

  • http://www.medlaw.com Stephen A. Frew

    You are correct that the artist owns the copyright to their own work, but there is one very big exception — when the work is created FOR HIRE. As an attorney and occassional purchasor of design services, I always put in my specs that the rights are made for hire and belong to me and not the artist.

    I have rarely had any back-pressure from artists on this point, but generally when it does occur, we are able to reach agreement on the critical elements of what I need to retain for my project to be successful and it is reflected in a higher price sometimes.

    On one-off arrangements, negotiations make some sense, but if you are looking to do a lot of business together, the “talent” will need to meet the buyer’s expectations without haggling on each order…or there simply won’t be repeat orders.

    Watch the bid specs carefully and agree on the terms in a written contract up-front so that neither party gets a surprise that will sour the future prospects for doing business together.

  • http://www.uglyfashionmedia.com Eoin Oliver

    I can’t believe you give the source files or PSDs etc! Couldn’t they be resold? Can I have them? Don’t you think I could edit them slightly, resell them on any other site, or to any other client? Or get a new designer in, and let him edit the files for me, and then he would also have access to these files, using them to sell to new clients. You’re quite possibly giving your designs to your competitors!

  • http://www.letsearch.com Alex

    I’m not a designer, I do commission graphic design work occasionally.

    From a customers perspective, holding onto a copyright for a design the customer commissioned, is nothing short of theft by deception.

    A paying customer has every right to expect, that if he commisions for example a logo, or a photograph, the copyright to be part of the deal.

    If the artist is not prepared to do that, then it should be specifically and with certanty, brought to the customers attention that, even though you are paying for this, I’m holding onto the copyright, so I can sell it to other customers should I so wish.
    then the customer can decide whether or not to proceed with the comission.

    If that was done then I would have no problems with it,
    however, I would be extremely unlikely to consent to commisioning the work in the first place.

  • http://www.nine10.ca/corporate/services/web_design/ Website Design Grande Prairie

    I agree with your general rules about copyright, ours are very similar. There are some real gray areas in this however, which are tricky to work around. Let’s say you have a client come to you for a full corporate branding (including consulting work) and a snazzy website. They turn down the branding (even though they don’t have anything consistent) and just get the website. This is fine, expect in the process of designing the website, you could essentially give them the foundation for a visual brand identity they never had before. A website contains so much design – fonts, graphics, colors, image style, layout rules… You could often carry this foundation over to other materials. We had this happen to us once, the client ordered a website and used the design in all of their marketing. They essentially got a free branding. Although we never raised a stink about it (lesson learned), it made me realize that somebody could do this to get around being branded. So we modified our contract slightly to state that the design is only provided for the intended use (i.e. the website), and is only owned by the client if they either had us create it as a branding first, or if we based it on existing materials they provided us. If they come to us to design the rest of the materials then it’s a non-issue, because the ongoing relationship is more valuable than a couple of bucks in the short term. But if they want to take that design to another designer (or nephew) to get the rest of their stuff done, then we will look at royalties or a buyout fee for the design. We honestly haven’t had the issue come up since we’ve changed these rules (most customers come to us for everything anyway), but it is something to watch out for. And the odd time you will have a client who understands how it works and actually asks “What will it cost for me to get the rights to use this for my other marketing?” It’s refreshing to hear that!

  • http://www.edgeimpact.co.uk Ken Good

    If a website is developed with every page showing copyright to the client, as so many websites do, I suspect by doing this the developer/author/designer has handed the copyright over to the client but I suspect that this only applies to what can be seen on the site and that which cannot be seen is still subject to the terms and conditions of the website development company. By this token, I suspect that if the client contacts another company to produce another website with all the same branding and layout but instead to be contained within a content driven system so that they can make changes themselves on a regular basis, that they (the client and the new company) are perfectly within their rights to reproduce the website exactly as it currently looks without credit to the original company. We have this very issue right now. An interesting difference between print and website production is that on printed material the printer/designer does not print their name but for some reason on websites the website development companies feel its their right to do so. Any thoughts on this anyone?

  • Scott

    I’m a web designer who works primarily with very small companies. I’m now using an updated contract that not only addresses the copyright issue, but makes it extremely clear who has which type of rights to what. It boils down to this:

    You (the client) retain copyright to content you provide to me for use on the web site (text, images, graphics, logos, etc.)

    I retain copyright to the overall web design (which I define as layout, color palette, font selection, etc.) and to the underlying HTML, CSS, PHP, Javascript, and any other code.

    Upon full payment, I grant the client a non-exclusive, non-transferrable license to use the web design on the single domain name for which the site was originally designed. I have a statement in the contract that says, “You understand and agree that you are not allowed to copy your web site to another web hosting service or have another company or person use or modify the code.”

    I had an unfortunate situation a few years ago when a client stole my design and code before paying me. It was partly my fault because 1) I didn’t have a written contract in place, and 2) He was savvy enough to know how to grab the source code. I was able to effect a DMCA takedown notice with his hosting company, which worked for a while, but the client eventually just re-built his site using a DIY site builder.

    The bottom line is that, unless we’re doing “work for hire”, we have legal rights to our work product. As long as we make it clear to our clients how that works, in the contract they sign, we should be protected.

    • Dave

      “You understand and agree that you are not allowed to copy your web site to another web hosting service or have another company or person use or modify the code.”

      So you lock your clients into only using your services whenever they want to update part of the site that they can’t do through the CMS? (assuming you provide a CMS)

      Personally, I would never commission work from someone with terms like that. Once the site has been developed, if the client only wanted a very small change, you could charge them whatever you like. What about if you refused to do any more work on the site? Or if the client wanted some urgent work done but you were on holiday for a month?

  • Renee Jernigan

    This is a very good article. I have recently started up a business, and was looking for more information on retaining the rights to my web design and graphics. My daughter is a graphic designer and this article will be useful to her too.

    Thank you
    Renee T. Jernigan