So you are a web designer, one of those who has gotten very busy and now you need to engage the services of an independent contractor designer ("subcontractor" in this article) to help you do the work you have committed to do for your client. How do you approach the process from a legal standpoint? (Although this article is about the legal relationship between the designer and an independent contractor, similar issues may be presented if the designer has an employee do the work.)
First of all, rule number 1, is: YOU MUST HAVE A WRITTEN AGREEMENT, SIGNED BY THE SUBCONTRACTOR IF YOU ARE TO ACQUIRE EXCLUSIVE RIGHTS TO THE SUBCONTRACTOR’S COPYRIGHTABLE WORK. [Note: I refer to an “agreement” even though the law requires a valid, written “instrument of conveyance” or other legally sufficient writing signed by the subcontractor. However, it is much, much better to have a full, valid, thorough written agreement setting forth all of the many aspects of the relationship including but not limited to the conveyance of exclusive rights.] Under the United States copyright law, the creator (not an employee for hire) of any copyrightable work is the sole and exclusive owner of all rights to that work unless there is a written agreement, signed by the creator, transferring some or all of those rights exclusively to a third party, in this instance to the designer. A non-exclusive grant can be made orally but non-exclusive rights are often not marketable and so there should be a written agreement to evidence the grant.
Section 201 of the United States copyright law provides:
2. The grant of rights from the subcontractor to the designer should be broader in scope than the designer is granting to the client. In other words, when the designer enters into an agreement with the client, one of the many provisions that must be covered is exactly who owns what rights to what materials and who has what rights to what form of use of those materials. But when the designer engages the services of the subcontractor the designer should acquire from the subcontractor greater rights than the designer is granting to the client. This is essential to a gap in rights which might put the designer in breach of its agreement with the client but also might make the designer an infringer of copyrights, trademarks etc. Thus, when a designer creates the designer’s agreement with the subcontractor, the designer must have the client agreement in front of the designer so make certain of this and other provisions. But of course, no designer should create their own contracts but should consult with an attorney knowledgeable in the field of intellectual property law and the issues presented by both the Internet in general and web design matters in particular.
3. The timing of deliverables must be carefully coordinated. In the designer’s agreement with the client, the designer undoubtedly agrees to deliver certain pages etc. as well as the completed site, on or before a certain date. Additionally, the same agreement should carefully define what constitutes the "site" or else there is no way to determine what is the nature of the work and when the job is completed and the designer entitled to be paid. Conversely, in the designer’s agreement with the subcontractor, the agreement should track exactly the same site definition and when the deliverables are due except of course the designer should provide that the subcontractor make delivery *before* the same deliverable is due to the client, say by 10 days or such.
4. Payments. The designer must have an obligation to pay the subcontractor only after the designer gets paid from the client and with some additional grace period. Otherwise, the designer may get into a cash flow bind, having to pay out before the designer gets paid.
5. Representations and warranties and indemnities. The designer should obtain appropriate representations and warranties from the subcontractor about the work the subcontractor is providing including but not limited to that the said work is original, does not infringe on the rights of others and many other such provisions. Additionally, the subcontractor should make at least the same indemnities as the designer is making to the client and the subcontractor’s indemnities should run both as to the designer as well as designer’s client.
and non-compete provisions. These, too, must be coordinated with
the same type provisions in the designer’s agreement with the client.
© 1999 Ivan Hoffman