Who Owns Copyright at Work?

by Gil Zvulony, Toronto Copyright Lawyer

Introduction

Copyright is the sole right to do various things to an original work, such as reproduce a work or give someone permission to reproduce that work.  In most cases, the first owner of copyright is the author/creator of the work.

An important exception to this rule is when an employee creates a copyrightable work for an employer, in the course of that employee’s employment.  In most traditional employment situations the copyright owner of a work, that was created by an employee, is clearly the employer.  However, the changing nature of employment relationships in Canada, such as the rise of telecommuting, home offices, and independent contracting, have created situations where the first owner of copyright is not always clear.

Copyright Ownership Within an Employment Context

Section 13(3) of the Copyright Act, R.S., 1985, c. C-42, sets out the rule for copyright ownership in an employment context::

Where the author of a work was in the employment of some other person under a contract of service or apprenticeship and the work was made in the course of his employment by that person, the person by whom the author was employed shall, in the absence of any agreement to the contrary, be the first owner of the copyright […]

The wording of section 13(3) gives rise to three preconditions for copyright to rest with an employer.  They are:

1) the author was in the employment of some other person, under a contract of service,

2) the work was made in the course of employment,

3) there is no agreement that says the employee is the first owner of copyright.

1. Under a Contract of Service

The common law has drawn a distinction between persons working under a “contract of service” and persons working under “contracts for services”.  A person working under a “contract of service” is an employee.  While a person working under “contracts for services” is an independent contractor.  This distinction is crucial when analysing copyright ownership, for if an author is an independent contractor then that author, subject to the other precondition discussed above, will be the first owner of copyright; not the employer.

Canadian courts have established criteria to determine whether a person is an employee or an independent contractor.

They are:

1) Who owns the tools?

2) Who is in control? Is there a relationship of subordination?

3) Who is assuming the risk of loss or chance of profit?

4) What is the degree of integration of the worker into the workings of the enterprise?

The application of the above criteria will vary according to each individual’s circumstances.  For example, a software programmer who works from home, on his own laptop, who chooses his own hours, and who invoices his clients, is likely an independent contractor.  On the other hand, a software programmer who works from home, but on a company laptop, during set hours, and who receives a regular paycheque (with taxes withheld) is likely an employee.

2. In the Course of Employment

If an individual is considered an employee then the next step in the copyright ownership analysis is to determine whether the work was created in the course of employment.  In other words, was the work created “on the job” or was it created on the worker’s “own” time.

What is considered “in the course of employment” has been the subject of several court cases.  There are no hard and fast rules and much will depend on the particular facts of each case.  Where a work was partly created during the course of an author’s employment and partly on the author’s own time, the courts have declared that the work is jointly owned by the author and the employer.

3. No Agreement to the Contrary

If an employee created a work during the course of employment and that employee wants ownership of copyright then that employee will need an agreement from the employer stating such.  The agreement need not be in writing.  A written agreement is almost always better than an oral agreement because an oral agreement is typically more difficult to prove in court than a written one.

An “agreement to the contrary” under section 13(3) should be agreed to before the work is created.  If there is no agreement to the contrary and the work is created by an employee during the course of employment, then the employer is the first owner  of copyright.  In such a situation, copyright would need to be transferred (assigned) to the employee in order for the employee to be the owner of the copyright.

Moral Rights

Moral Rights (Sometimes called Author’s Rights) are rights granted exclusively to authors of works  under the Copyright Act ( R.S., 1985, c. C-42).  Section 14.1 of the Copyright Act defines moral rights as follows:

14.1 (1) The author of a work has, subject to section 28.2, the right to the integrity of the work and, in connection with an act mentioned in section 3, the right, where reasonable in the circumstances, to be associated with the work as its author by name or under a pseudonym and the right to remain anonymous.

Moral rights are different from copyrights provided for under section 3 of the Copyright Act, in that they always reside with the author of a work, as opposed to the owner of copyright.

The leading Canadian case on moral rights is Theberge v. Galerie d’Art du Petit Champlain inc., [2002] 2 S.C.R. 536, where Justice Binnie of the Supreme Court of Canada highlighted the nature of moral rights:

[Moral rights] adopt a more elevated and less dollars and cents view of the relationship between an artist and his or her work. They treat the artist’s oeuvre as an extension of his or her personality, possessing a dignity which is deserving of protection. They focus on the artist’s right (which by s. 14.1(2) is not assignable, though it may be waived) to protect throughout the duration of the economic rights (even where these have been assigned elsewhere) both the integrity of the work and his or her authorship of it (or anonymity, as the author wishes).

Moral rights may not be assigned/transferred to another person.  They are personal to the author.  Employers concerned about employee’s asserting their moral rights should seek a waiver of moral rights.  The waiver may be done in writing, but need not be so, as a waiver may be implied in certain circumstances.

Conclusion

In this age of evolving work environments and flexible work relations, determining the owner of copyright can be less than straightforward.  Having a court make that determination can be a costly and time consuming experience. The easiest and least expensive way of removing any clouds of uncertainty over the ownership of copyright is for the relevant parties to address the issues directly from the outset of their relationship and before the work(s) are created.

For further reading see:

Intellectual Property Law: A Primer

Author’s Rights: What Are Moral Rights?