Who Owns Copyright in Your Business
As a business owner, you work hard to build your brand, content, products, and services. But legal protection doesn’t kick in until an idea becomes more than just a concept. Copyright protection only applies once something is expressed in a fixed, tangible form. That could mean a written document, a digital file, a painting, or even a music recording. If it’s just an idea floating around, copyright laws won’t apply.
Independent Creation vs. Infringement
What if two people independently create similar content? That situation doesn’t necessarily mean copyright infringement has occurred. Copyright law protects against copying, not against coincidental similarity. If someone creates something similar without accessing or copying your work, it’s not considered a violation.
However, if your work was viewed or heard and then replicated too closely—even subconsciously—that could be a different matter. The distinction often hinges on evidence of actual copying.
Work Made for Hire Explained
When your employees create content during their normal working hours, that content typically belongs to your business. This concept is known as “work made for hire.” The business pays the employee, and in return, the business owns what they produce—assuming it’s within their job scope.
However, if an employee works on something unrelated to their job during personal time, like painting a canvas on a weekend, your company doesn’t automatically own that. The rights remain with the creator if it falls outside their work responsibilities.
Why Contracts Matter
Bringing in outside help—whether it’s a graphic designer, marketing agency, or software developer—does not automatically give you ownership of the work they create. Without a written agreement stating otherwise, the default rule is that the creator retains the copyright.
This is where “work made for hire” clauses and copyright assignments come in. You’ll want to specify in the contract that the rights transfer to your business, or you may find yourself unable to reuse or modify the work later.
Full Transfers vs. Limited Use Rights
You have two main options when dealing with copyright ownership:
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Assignment: A full transfer of rights from the creator to another party. This means the buyer becomes the legal owner of the copyright.
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License: Permission to use the work without transferring ownership. Licenses can be exclusive or non-exclusive and may come with specific restrictions—like using a song only in one YouTube video.
Whether given verbally or in writing, a license defines how, where, and for how long someone can use your creative work. If you grant a license, it should be clear what is allowed and what is not.
Protect Your Business with Clear Agreements
Having clear contracts in place isn’t just good practice—it can save your business from costly legal issues. Always clarify who owns what and what permissions are granted when working with employees, contractors, or partners. Make sure those expectations are written down, ideally in a formal agreement.
If you want additional guidance, Aaron Hall offers a free legal resource library for business owners at AaronHall.com/free, covering common legal pitfalls and how to avoid them.
Video Transcript
Copyright Basics for Business Owners
Aaron Hall: As a business owner, you invest in ideas, your brand, your products, your content. But when does an idea become protected and who owns it once it is? In this video, we’re diving into the real world impact of copyright law, covering everything from independent creation to work made for hire, to how licenses and assignments.
Actually work in your business, whether you are hiring creatives, developing content, or protecting your own work, understanding these rules isn’t just helpful, it’s essential.
Similar Works Created Separately
Now, you might be asking what happens if two artists independently create something that looks very similar or sounds very similar in those cases, is that a copyright violation?
I. Which we call infringement. No, that’s not infringement, because the right to copy or control copies only relates to copies and use of a person’s work. It has nothing to do with the independent creation.
Inspiration and Evidence of Copying
Now you might have an argument over whether the person was inspired by somebody else’s work and maybe subconsciously saw that and then created something that was, in essence a copyright.
But that’s an issue of evidence. Was it actually copied versus independently created? So that means in theory. Two artists could create something that creates incredibly similar, and as long as it wasn’t copied from the other, the artists have no copyright infringement.
Using Someone Else’s Work as a Starting Point
But if you sit and look at a piece of art and then create something from that, or if you listen to a song and then create a song from that, if it’s too similar.
It is likely going to be considered copyright infringement. We’ll talk a little more about some of the considerations there.
Work Made by Employees
As a business owner, you might be wondering. Well, what happens if employees in my company are paid by me to create something for the business? Does the employee who’s the artist own the rights to that?
Well, it wouldn’t make sense to let all employees own that, right? So the law has developed a concept called Work made for hire.
Scope of Employment
In other words, you can hire employees and any work created by that employee while working within the scope of business is going to be a copyright owned by the company because the company is paying the employee’s wages.
Work Created Outside Work Hours
But if the employee does something after hours. Maybe creates a painting and it has nothing to do with the business. Do you as the business owner, own the rights to that painting that the employee created after hours? No. The employee can do something outside the scope of business on her or his time, and that work is not owned by you as the business owner.
Who Owns the Work?
One little related item to this, what if you hire another company? To create something for you. Who owns the rights to this? Well, as you may recall, the company who created it. Owns the rights to it. Unless a contract that you entered into with that company gives you the intellectual property right to what they created.
Contract Provisions
This is sometimes called a work made for hire contract provision.
Fixed Tangible Medium Requirement
Now you might be thinking, wow, this is cool. Does a copyright protect essentially ideas? ‘Cause essentially all these things, music and video and art, they’re really ideas. The law says no. Ideas are not protectable by copyright. The idea must be in a fixed, tangible medium.
In other words, it must have gone from idea stage to a recording paper, a canvas, digital code, something. That is somehow represented in the physical world, not just a concept or an idea.
Digital Files Are Covered
Ideas are not protectable by copyright only. The form of that idea that is in a fixed. Tangible medium, a physical property of some sort, and that includes the digital, physical property.
So if it’s on a computer or it’s a music stream or a video streamed from YouTube or whatever, that digital element is protectable by copyright. But the mere idea is not.
Can You Transfer Copyright to Others?
Now, you might be wondering, what rights do I have to buy copyright rights from someone else or sell the rights to copyright? We already talked about the fact that you can hire a software designer.
A graphic designer or somebody else to create work for you. And under a work made for hire provision, you would own the copyright, not that other company.
When You’re the Creator
And by the way, if you’re a company that’s creating any sort of artwork for anybody, this is important for you to know. Or if you’re creating software code for people, it’s important to decide who owns the rights to this and have that delineated.
In a contract with you and your client.
Assigning Copyright
So what are your options for selling your work? Let’s talk about this. Well, first off, you can sell the copyright outright. That’s sometimes called an assignment, but assignment is just more of a fancy name for transferring or assigning the rights to another party.
Granting Permission Without Giving Up Ownership
But let’s say you want to keep the ownership, but you want to give somebody else permission to use the work. And maybe your permission to use this for a very specific purpose.
Example: Music in a Video
What’s an example? Let’s say you recorded a little guitar tune that you made up and that recording you want to allow somebody to use as background on their video.
Well, that permission to use is called a license. License is just a fancy word for a permission to use intellectual property.
So if you give that person permission to use your music on their video, you would be giving them a license.
How a License Can Be Granted
This permission can be provided orally. Or it can be provided in writing.
We would call it a license as lawyers, but you can call it whatever you want.
So even if you say, Hey, yeah, you can use my music on your YouTube video as a little background music, no problem at all. What we have established there is a license for copyright use to your musical composure and your musical recording.
Limitations on Use
So there are two elements there. And that license is limited to the YouTube video for which permission was granted.
In other words, it’s not a license to go sell that music and allow it to be used on other videos or other purposes.
Clarifying the Scope
A license can be limited. So keep in mind, whenever you give somebody permission to use work or you get permission to use some sort of copyrighted work.
You wanna make sure you’re thinking about what is the scope of that use, and ideally, you have that written down that might be called a license agreement.
Free Legal Resource for Business Owners
Now, if you’d like to know more about how to avoid trouble like this, I have a free resource at AaronHall.com/free. I provide information for business owners of small to midsize companies on how to avoid common legal problems that includes.
A PDF. It includes videos talking about important issues. I’m Aaron Hall. I’m an attorney for business owners and entrepreneurial companies. If you’d like, subscribe to this channel so you can get more educational content like this.