A Business Owner’s Guide to Copyright in Ontario: Managing the Artistic Works Created by Employees vs. Contractors

To protect their valuable intangible assets, businesses need to understand who owns the intellectual property (IP) created by their employees or hired contractors and ensure proper agreements are in place. When it comes to artistic works, it is essential for businesses to clarify copyright ownership through clear contracts and IP policies.

There is a difference between hiring a contractor and an employee to produce works. Typically, employees’ creations are owned by the employer, while contractors retain ownership unless otherwise agreed. This article will focus on copyright ownership in Ontario and provide guidance on how businesses can safeguard their IP effectively.

What is Copyright?

Copyright is a type of intellectual property that gives the creator of original work exclusive rights to its use and distribution. Copyright is not just for artists and musicians. Copyright applies to all original literary, dramatic, musical, and artistic works provided the conditions set out in the Copyright Act have been met. Each of these general categories covers a wide range of creations, and they can be valuable to businesses, including logos, catalogs, website content, and architectural designs.

In Canada, copyright protection lasts for the artist’s lifetime plus an additional 70 years after his or her death. After this period, the work enters the public domain and can be used by anyone. This rule applies to most works, but there are exceptions, such as Crown copyrights (works created for or published by the Crown), joint authorships, and works with unknown authors.

What is Considered to be an “Artistic Work”?

Artistic works include but are not limited to paintings, drawings, maps, charts, plans, photographs, engravings, illustrations, sketches, sculptures, artistic craftsmanship, architectural works, and compilations of these. These can appear on various mediums whether in physical copies or digitally. [1]

General Rule for Copyright Ownership

The author of a work is the first owner of the copyright. However, if an employee creates a work as part of their job, the employer usually owns the copyright. This is outlined in Section 13(3) of the Copyright Act, which states:

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.[2]

As a Business Owner How do you Maintain the Copyright of Artistic Works That Were Created by an Employee?

To ensure the employer owns the copyright to works created by employees, three conditions must be met:

Employment Relationship: The work must be created under a “contract of service,” which means a traditional employer-employee relationship. Factors like the level of control the employer has over the employee, who provides the equipment, and the financial risk taken by the employee can help determine this relationship.
Course of Employment: The artist must have created the work during the course of their employment. This means the work was made following the employer’s instructions and using the employer’s resources. Even if the work was created during the employee’s free time, if it relates to their job duties, the employer may still own the copyright.
No Agreement to the Contrary: There must be no agreement stating that the employee retains the copyright. While assignments of copyright must be in writing, an “agreement to the contrary” does not need to be written and could even be implied in certain contexts, such as academic settings where professors often retain copyright to their work. [3]

What About Artistic Works created by Independent Contractors?

In Canada, without an employment agreement, the general rule is that the author, or creator, is the first owner of the copyright in an original work. Simply paying for the work does not transfer ownership of the copyright to the contracting party.

This rule also applies to independent contractors or freelancers, whose default legal position is different from that of employees. Generally, hiring a contractor gives you an implied license to use the work, but not ownership of the copyright. To ensure that your business owns the intellectual property created by independent contractors, include specific provisions in the initial contract. This contract should state that any intellectual property created during the business relationship is assigned to the employer, transferring all ownership rights to you.[4]

Importance of Employment Contracts Illustrated Through an Example of the Work of a Graphic Designer

When it comes to copyright ownership for graphic designers in Canada, the answer depends on the nature of their employment. If a graphic designer is an independent contractor, they typically own the copyright to their creations unless they explicitly transfer those rights to a client through a written agreement. Conversely, if the graphic designer is an employee creating designs as part of their job duties, the employer usually owns the copyright under Canadian copyright law, which stipulates that works created in the course of employment belong to the employer. However, this can vary based on specific contract terms or regional copyright laws, making it essential for both designers and employers to clearly outline ownership rights in any employment or freelance agreements.

To avoid any uncertainty, businesses should include clear clauses in their employment contracts that address the transfer of intellectual property rights. This ensures that the employer owns the copyright to works created by employees.

What About Moral Rights?

Moral rights include the right to be credited as the author and the right to protect the work’s integrity. Even if a business owner owns the copyright, the author maintains moral rights. These rights cannot be assigned but can be waived, and they last as long as the copyright on the work. Therefore, a business owner should consider including a waiver of the author’s moral rights in the contract as they are not automatically assigned with the copyright.

An author or creator has the following moral rights under the Copyright Act:

Right of Paternity
The right to claim authorship.
The right to remain anonymous.
The right to use a pseudonym or pen name.
Right of Integrity
The right to prevent distortion, mutilation, or modification of their work that harms their honor or reputation.
The right to ensure their work is not altered in a way that affects its integrity.
Right of Association
The right to prevent their work from being associated with any product, service, cause, or institution they do not endorse.[5]

Infringement of Copyright

Infringement is the legal term for violating copyright laws. There are two types: indirect and direct.

Indirect Infringement

Involves dealing with infringing copies or allowing public performances without permission.
Typically concerns commercial activities like sales and distribution.

Direct Infringement

Occurs when someone, without permission, does something only the copyright owner is allowed to do, such as making a copy of the work.[6]

According to the Copyright Act, the owner of the copyright is entitled to remedies for infringement:

Copyright

34(1) Where CR has been infringed, the owner of the CR is subject to this Act, entitled to all remedies by way of injunction, damages, accounts, delivery up and otherwise that are or may be conferred by law for the infringement of a right

Moral rights

(2) in any proceedings for an infringement of moral rights, the court may grant to the holder of those rights all remedies by way of injunction, damages, accounts, delivery up and otherwise that are or may be conferred by law for that infringement of a right [7]

Conclusion

Understanding and addressing copyright ownership in artistic works created by employees versus independent contractors is crucial for businesses in Ontario. By ensuring proper employment relationships and clear contracts, companies can protect their valuable intellectual property assets. If you need help drafting these agreements or have questions about copyright ownership, consulting with a legal professional can provide the guidance you need.

Thank you to Zainab Alsalihi for her contributions to this article.

The contents of this article should not be construed as legal advice. Please contact Hani Al-Dajane at Emerge Law for any further questions.

[1] Canadian Copyright Law, University of Alberta.

[3] Dupont, Jean-Sébastien and Guillaume Lavoie Ste-Marie, Do you actually own the IP generated by your Canadian employees?Smart & Biggar.

[4] Heer, Christopher et al., Employee’s Rights to Intellectual Property, Heer Law