Legalities 25: Work made for hire and copyright infringement

Linda Joy explores the complexities of being an employee and a freelancer.

Q. I am fairly confused about the conflict of interest between a freelance job and my “real job.” I’m an employee in a design studio, where we do a lot of work for wineries (labels, signage, corporate identity, advertising, websites). Now, however, I am trying to get started as an independent designer. How do I avoid a conflict of interest, since what I want to do, independently for a fee, is freelance graphic design and illustration for the wine industry?

A. You have two concerns: (1) whether your employer would think your independent work is inappropriately competitive and (2) whether your independent design work will conflict with any copyright your employer owns in the work you’ve done on the job.

Issue (1) depends upon your employment contract and/or relationship with your employer. There are no general rules of law for such a situation.

Issue (2) is a matter of the work-made-for-hire doctrine under copyright law. “Work made for hire,” means the copyright in any creative expression you create, as part of your employment is owned by your employer rather than you.

Since the studio owns copyright in the work you do on the job, theoretically its possible the studio (or the studio’s client) could claim that your freelance work infringes their copyright.

The legal standard for copyright infringement is “substantially similar.” “Substantially similar” means that an average person viewing the two works would recognize that the artistic expression in one was copied from the other. “Artistic expression” is a difficult concept to define in words. It is supposed to mean the specific artistic choices and details that go into a work, such as composition, rendering and colors, but not general concepts such as subject matter or similar artistic style. However, courts often describe infringing works as having the same “look and feel” or “total concept and feel” as the originals. Sometimes works that use the same unique artistic style with similar subject matter are held infringing, even if specific details of the works are different.

A case from Minnesota a few years ago, Taylor Corporation v. Four Seasons Greetings, illustrates this danger. In that case, some artists had created certain greeting card designs as employees of Taylor Corporation. Then the artists switched jobs and began working for a competing card company, Four Seasons Greetings, where they created some similar card designs. Taylor, as their former employer, owned copyright in the original designs as work made for hire. Taylor sued Four Seasons for copyright infringement. Relying heavily on a “total concept and feel” analysis, the court found that the new cards were substantially similar to the Taylor cards, and thus held that the artists had infringed the copyright in their own works. Some of the cards at issue are reproduced here:

In your situation, suppose you designed a wine label for one of the studio’s clients. Then the studio (which owned the copyright initially as work made for hire) assigned copyright in that label to the client. Later you create a similar wine label for a freelance client, and you assign copyright in that label to your client. If the studio’s client thinks the label for your freelance client is too similar, it could bring an infringement claim against your client. Then your client would expect you to indemnify it against the claim (“indemnify” means you would pay the costs of the lawsuit and any settlement amounts because you are responsible for the infringement). The studio might also have an unfair business practices claim against you (that you have harmed the studio’s business relationship with its client).

For most artists, this is not a problem. As a matter of professionalism and common sense, you would not give one client an obvious copy of work you’ve already done for another client. Unless you are licensing second rights, clients expect to receive a unique design specifically created for their project. On the other hand, you are being hired on the strength of your portfolio, and thus your clients will expect your work for them to reflect a similar style and level of quality. Sometimes clients actually ask you to do work that is very similar to something you’ve done before. If you don’t own the copyright in that earlier work, it is important to resist such a request.

Bottom line: the best preventative strategy is to make sure that your freelance works are unique and quite different from your studio work. Also, if feasible, it would be wise to talk with your employer about your new plans and work out any objections ahead of time. If you think you will be doing freelance work that looks a lot like your studio work, the best protection is to have a clear written agreement or memorandum of understanding, which you and the studio sign, which acknowledges that you can do work for your freelance clients that is similar to what you do on the job. The following language would be ideal:

Q. Recently, I started a website development business with a partner. Our target clientele will be small businesses in the auto industry (car dealers, rental companies, repair shops, etc.). I do the artwork, and my partner does the tech stuff. While this new business is getting off the ground, I need to continue doing my own freelance graphic design as well. Working for a particular freelance client, a car repair shop, I developed a concept for a home page template which can be reused for all websites we develop. It uses an illustration of a car as the homepage, with standardized portals that provide links from parts of the car to internal pages. My concept is to create individualized illustrations based on this template for our various clients. The model of car and details of each client’s image would be different, but the basic idea of showing a car, layout of the car image, and the portals, would be the same. And the illustration style would be the same, as they will all be done by me.

I showed a proposed illustration based on this template concept to my freelance client, who immediately loved it. However, he demanded that I assign copyright in the website design to him. He says this is necessary because he may want to sell the business, and any new buyer will require that unfettered rights in the website will be transferred as one of the valuable business assets. If I assign copyright to him, will I be legally barred from using the car template for our other clients?

A. This is a similar problem, from a slightly different angle. I see two issues to consider. First, its important to remember that the general concept for a home page with this type of template, including the general visual subject matter of an illustrated car, and how it functions (where the portals are), is not protected by copyright. That is considered an “idea” rather than copyrightable artistic expression. So merely assigning copyright to your client would not prevent you from creating websites with the same concept for your other clients.

On the other hand, it would be good to ensure that your client understands this. Some clients mistakenly think that once you’ve assigned copyright, it means you will not use the same concept and function for other websites. There’s also a potential misunderstanding that she might own such exclusivity under the concept of “trade dress” in trademark law. Trade dress means that the overall appearance of a site functions like a brand name for the site’s owner. To establish trade dress, the site owner would have to show that the website design is unique and “distinctive” (that is, consumers perceive it as a brand identity and not just as an aesthetic feature of the site). If trade dress rights are established, the site owner could prevent her competitors from using similar illustrated car designs for their own sites. You don’t want your client to think she would be entitled to claim such rights against your other clients.

Second, whether your work for other clients would infringe the copyright you assign to this freelance client depends on whether the home page artwork for new clients would be considered “substantially similar” to hers. As discussed above, it’s usually safe to utilize the same artistic style and general subject matter without being in danger of copyright infringement. However, there is some risk, depending upon how similar the illustrations are.

So for this situation, I would also recommend that you include an explicit written provision along with your copyright assignment, which makes it clear that you are entitled to create similar websites for other clients. Here’s some sample language for your agreement:

Assignment of Copyright: Effective upon full payment of all compensation due, Artist assigns to Client all copyright in and to the Final Art. All other rights are reserved by Artist, including without limitation all trademark and trade dress rights, and the right to reproduce, publish and display the Final Art in Artist’s portfolios and websites, and in galleries, design periodicals and other media or exhibits for the purposes of recognition of creative excellence or professional advancement in the fields of illustration and graphic design.

Artist’s Right to Create Similar Works: Client recognizes and acknowledges that the Final Art is one of several website designs created by Artist which embody a similar concept, functioning or artistic style, and Client agrees that Artist shall retain all rights to create and license to other clients new artworks and website designs which may be considered “substantially similar” to or “derivative works” of the Final Art, as those terms are defined under the Copyright Act, and Client may not claim that such new works conflict with any trade dress rights in the Final Art.

Note: this language assumes that “Final Art” is defined elsewhere in the agreement to mean the final deliverables only, e.g., the final website artwork, and not preliminary sketches or alternate comps. Technological aspects of the website, such as source code, etc. are also outside the scope of this definition.

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Legalities is a service mark of Linda Joy Kattwinkel. © 2006 Linda Joy Kattwinkel. All Rights Reserved. The information in this column is provided to help you become familiar with legal issues that may affect graphic artists. Legal advice must be tailored to the specific circumstances of each case, and nothing provided here should be used as a substitute for advice of legal counsel. Linda Joy Kattwinkel is an attorney, painter and former graphic artist/illustrator. She practices intellectual property law, arts law and mediation for artists in San Francisco. She can be reached at 415-882-3200 or ljk@owe.com.

Linda Joy Kattwinkel will be participating in the 8th Annual Visual Arts & the Law Conference in Santa Fe, New Mexico on August 10th and 11th.

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