Who owns the work your freelancers made?
You paid the invoice, so you assume you own the logo, the code and the photographs. The default rule says otherwise, and the gap usually surfaces at the worst possible moment: due diligence.
Problems, in order · Part of Outsourced General Counsel
A freelancer or contractor normally owns the copyright in work you commissioned, even after you have paid the invoice. Only a written assignment signed by them moves it. Dinmore Bell audits what a business actually owns, puts that ownership in the right entity, and closes the gaps before a buyer's lawyer finds them.
Most founders discover this during a funding round or a sale. A lawyer on the other side asks for the assignments, somebody goes looking, and it turns out the brand, the website and half the product were made by people who are not employees and never signed anything beyond a purchase order.
The money was paid. The work was delivered. The copyright stayed where it started.
Does paying an invoice transfer copyright?
No. Payment buys the deliverable and, at most, an implied licence to use it for the purpose it was commissioned for. Ownership of the copyright moves only by a written assignment signed by the freelancer.
This catches people out because it runs against ordinary commercial instinct. In almost every other purchase, paying for a thing makes it yours. Copyright does not work that way. The author owns the work, and the author is the person who made it, not the person who paid for it.
There is one large exception, and it is the reason the rule feels inconsistent. Where the person who made the work is an employee, the position reverses:
Where a literary, dramatic, musical or artistic work, or a film, is made by an employee in the course of his employment, his employer is the first owner of any copyright in the work subject to any agreement to the contrary.
Two phrases in that sentence do the work. "Employee" means an actual employee, not a contractor on a rolling engagement, however long they have been with you. And "in the course of his employment" means the work has to be part of the job you employ them to do. A developer who builds your platform during working hours is covered. The same developer's side project, built at weekends on their own machine, is not.
Everyone else is outside it. Freelancers, agencies, consultants, a contractor through their own limited company, the friend who designed your logo before you incorporated: all of them keep the copyright unless they have signed it across. The Intellectual Property Office puts it plainly in its guidance on ownership of copyright works: for commissioned work, the first legal owner is the person or organisation that created it, and not the commissioner, unless it is otherwise agreed in writing.
What does a written assignment actually require?
It has to be in writing and signed by the person giving up the copyright. An email confirming the work is yours, a clause in a purchase order they never signed, or a verbal agreement will not do it.
The requirement is short and unforgiving:
An assignment of copyright is not effective unless it is in writing signed by or on behalf of the assignor.
The practical consequence is that the paperwork you have is usually not the paperwork you need. Purchase orders, statements of work and supplier terms are almost always issued by you and accepted by conduct. Nobody signs anything. That is fine for agreeing a price and a deadline, and useless for moving copyright.
What an implied licence gets you, and what it does not
Where there is no assignment, the courts will usually imply a licence to use the work for the purpose it was obviously commissioned for. You paid a designer for a logo, so you can use the logo. That is genuinely useful, and it is why most businesses operate for years without noticing the gap.
What an implied licence tends not to give you is everything that matters later:
- Exclusivity. The freelancer may be free to license the same work, or something close to it, to somebody else.
- Modification. Changing the work, or having somebody else change it, can fall outside the implied scope.
- New purposes. A photograph commissioned for a website is not automatically licensed for a national advertising campaign.
- Transfer. When you sell the business, an implied personal licence is a weak thing to hand a buyer.
The commercial consequence is not usually a lawsuit. It is a discount, a retention, or a warranty you have to give and cannot honestly stand behind.
Why this becomes expensive later rather than now
While the relationship is good, a confirmatory assignment costs almost nothing. You send a short document, the freelancer signs it, and the position is fixed. People sign because they have no reason not to, and because they are usually still hoping for more work.
The price changes when the relationship ends, and it changes completely when the freelancer knows why you are asking. A confirmatory assignment requested three days before completion of a sale is not a formality; it is leverage, and it is priced accordingly. Some freelancers are impossible to find years later. Some have died, and you are then negotiating with an estate.
This is also why it is the first question a buyer's lawyer asks. It is cheap to ask, the answer is documentary, and a business that cannot prove it owns its own brand and product has a real problem rather than a technical one. Working through this properly is a standard piece of intellectual property work: establish what exists, find out who made it, and paper the gaps in order of what would actually cost you.
What to do about it, in the order worth doing it
Start with what you would have to warrant. If you sold the business tomorrow, what would you be asked to promise you own? The name, the marks, the website, the product, the core content. That list is short, and it is the list that matters.
Find out who made each thing. Employee, contractor, or agency. Employees in the course of employment are generally fine. Everyone else needs paper.
Get confirmatory assignments now, while nobody is negotiating. A short signed document covering work already done, worded to catch everything they have made for you, not just the piece you have remembered.
Fix the template going forward. Every contractor engagement from now on should assign copyright on signature, include a waiver of moral rights, and cover work produced before the contract was signed. That is one paragraph, once, and it removes the problem permanently.
Check the entity. Work assigned to a company that is not the one being sold, or to a founder personally, is a different version of the same problem. A group with several entities needs the ownership sitting where the value is.
None of this is difficult. It is simply the kind of thing nobody does until somebody whose job it is asks the question. That is most of what an outsourced General Counsel does: notice the ordinary thing early, when it costs a signature rather than a negotiation.
Where a specialist is needed
Registering trade marks and patents, contentious proceedings over infringement, and tax questions about where intellectual property should sit in a group are all specialist work. Dinmore Bell instructs and controls those specialists, holds the budget and stays accountable for the commercial outcome, rather than handing you three names and stepping back.
Common questions
- Do I own the copyright in work my freelancer made if I paid for it?
- Usually not. Payment buys the deliverable and an implied licence to use it for the purpose it was commissioned for. The copyright stays with the freelancer unless they have signed a written assignment transferring it to you.
- Does a purchase order or statement of work transfer copyright?
- Not on its own. An assignment has to be in writing and signed by the person giving up the copyright. Purchase orders and supplier terms are typically issued by the buyer and accepted by conduct, so nothing is signed by the freelancer and no copyright moves.
- What about work made by my employees?
- Where an employee makes a literary, dramatic, musical or artistic work, or a film, in the course of their employment, the employer is the first owner of the copyright unless the contract says otherwise. The two things to check are that the person is genuinely an employee rather than a contractor, and that the work was part of the job.
- Can I fix this after the freelancer has finished the work?
- Yes, with a confirmatory assignment signed by the freelancer covering work already delivered. It is straightforward while the relationship is good and much harder once they know you need it, so it is worth doing before a transaction rather than during one.
- What happens if we cannot find the freelancer?
- You are left relying on an implied licence, which limits what you can promise a buyer or an investor. The practical options are to replace the work, to narrow what you warrant, or to accept a retention on the price. All three are more expensive than a signature would have been.
Sources
- 01guidance on ownership of copyright works gov.uk
- 02Copyright, Designs and Patents Act 1988, s 11(2) legislation.gov.uk
- 03Copyright, Designs and Patents Act 1988, s 90(3) legislation.gov.uk
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