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Risk Management Update – Copyright Ownership – Employee vs. Contractor Blogger

03/12/2012

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Let’s face it; blogging takes time and busy business owners and executives may have better uses of their time. Thus, it may be better to delegate the company blogging responsibility to one or more employees or hire an independent contractor to write the company blog.

These scenarios trigger copyright issues that should be understood, especially if the company plans to hire a blogging contractor.

The general rule of copyright ownership is that the person who authors the work owns the copyright. If there is more than one author of the work–a joint work–all of the authors own the copyright.

Does this mean employees own the copyright to blogging content the company pays them to write?

No. If the company assigns the blogging duty to an employee over whom the company has control, their blogging content falls within the “work made for hire” definition, and the employer company owns the copyright. After all, the company paid the employee to blog as part of his or her job duties, so the company should own the copyright.

What about independent contractors?

For the very reason that blogging can be time consuming, a cottage industry of contractor bloggers has emerged. If your company hires an independent contractor to blog, their work falls within the “specially ordered or commissioned work” definition under the the Copyright Act, and the general ownership rule applies (the author owns the copyright) unless there is a signed written agreement that specifies that their work is a work made for hire. In the case of contractor bloggers, a written contract makes all the difference in the world.

What’s the big deal?

If your company hires an independent contractor to write the company blog without a signed work made for hire agreement, under the Copyright Act, the contractor has the exclusive right to reproduce the work, to write derivative works (ie. squeals) based on the work, to display and distribute copies to the public, and the right to transfer ownership of their work to a third party. Your contractor could force you to remove the content they wrote for your company blog, they could use the content for another company, and they could even sell it to a third party. Hence, it is vital for to have a signed written agreement with the blogging contractor that says his or her work is a work made for hire (as well as non-infringement reps and warranties and indemnity clauses to name a few).

What if it’s too late?

If the company forgot to have its contractor blogger sign such a contract, it may not be too late. The company should put one in place for all new content written by the contractor. And, depending on the relationship between the people, the company might be able to obtain ownership to the copyright in the contractor blogger’s content, but only with a properly drafted and signed written agreement. You should definitely try.

For more information on works made for hire, download and read: Works Made for Hire under the 1976 Copyright Act.

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What? You Settled the Case!

01/30/2012

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We believe that most small to mid-sized businesses should work with a part-time general counsel, and should use their part-time general counsel to help manage outside litigation counsel.  Here is a story that may make your blood boil.

It's a fairly common practice amongst bill by the hour litigators to jokingly express outrage within the firm for settling cases short of trial.  After all, early resolution results in a lost hourly billing opportunity for the law firm.   I've heard this from senior attorneys in firms where I worked, and I've heard this from other attorneys I know.

Pretty offensive, but it illustrates a point about reactive legal services.   Richard Susskind, in his book, The End of Lawyers?   Rethinking the Nature of Legal Services, notes that there is a fundamental tension between law firms and clients.  "The client will generally hope their legal requirements are routine and can be disposed of quickly and painlessly, while the law firm will generally hanker after more challenging instructions that will occupy them for more time."   (pg. 149).

Most reactive legal problems lead to longer and more costly legal assignments.   This is usually hard to avoid.  However, proactive legal work and training can help  avoid costly legal problems and businesses and executives are wise to embark on a proactive legal strategy with attorneys such as our program.

As part-time general counsel to our clients, we share their legitimate interest in minimizing our involvement and the cost of legal services.  We also understand that sharing this goal may lead our clients to seek our assistance on more complex and high value legal work.   Through proactive training and legal coaching, we align our interests with our clients' interests, we deliver a high ROI,  and everyone wins.


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Be Wary of the Lawsuit Selling Lawyer

01/28/2012

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Some lawyers, especially lawyers who exclusively bill by the hour,  sell their clients on filing a lawsuit.  It's not hard to do.  The client is upset because they have been wronged in someway, and the attorney  can direct the client's frustration and anger into filing a lawsuit.  Not all attorneys do this, but many do.  After all, what could be better for the lawyer than a client who will pay the lawyer on an hourly basis to battle it out in court?  And remember this - when it comes to most commercial litigation and pay by the hour lawyers, the lawyers take no risk because they get paid win, lose or draw.     

Before filing suit, ask the hard questions and demand hard answers:  How can a lawsuit benefit us?   What will we accomplish with this lawsuit, what will the ROI likely be, and is there a better way to go?   In addition, in many cases the business should consider hiring an independent and experienced litigator to coach them through the litigation decision-making process.  Having an experienced lawyer who does not stand to gain from filing the lawsuit will often help you make a better decision.


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Risk Management & Mange Legal Costs - Rocket Docket Arbitration

01/28/2012

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I'm not usually a fan of arbitration.  I have found that it costs just as much if not more than a court battle, and you cannot appeal an arbitration gone bad.   These are serious issues that every business owner and executive should discuss with their attorney.

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I'm also not a fan of court battles because they take so long and cost so much.  When it comes to the consumption of pay by the hour legal services, time is money, and time is serious money when the trial date is 18 months away.

Here is a suggestion to consider.   You're not going to ever have a perfect litigation or a perfect arbitration. Things will go wrong no matter way.  The goal should be to get it over with as fast as possible so you can get on with your business.  If you agree with this philosophy, you may want to consider including a rocket docket arbitration clause in select contracts that:

(a) appoints a named arbitrator to handle all disputes;
(b) sets a hearing date deadline of 30 to 60 days from the date of the Demand for Arbitration;
(c) requires mandatory disclosure of evidence.

Having the lawyers battle for 30 to 60 days will cost you far less than having the lawyers battle for 547 days (18 months).  Win or lose, getting past the dispute as cost effectively as possible is often is the best thing that can happen for the business.   


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