Reminder – Independent Contractors Usually Own the Copyright.
As I explored in Who Owns the Copyright to Real Estate Photographs? and Who Owns the Photo Copyright When One Professional Hires Another?, U.S. Copyright Law vests copyright ownership in the person who creates a work of art such as a photograph or website design (“Art”).
Professionals such as real estate brokers often engage the services of photographers and website designers (“Artists”) to obtain things the brokers need in order to conduct business. The Artists are usually Independent Contractors (“ICs”) rather than W-2 employees of the brokers. It is wise to presume in these cases that the IC owns the copyright, even though the broker paid the IC to create the work.
Art that W-2 employees create as part of their regular jobs creates the opposite presumption, i.e., that the copyright vests in the employer rather than the in the employee.
Artists who are ICs typically own the copyright to the Art as soon as they create the work. Copyright ownership vests automatically, without the need to place a © symbol on the work.
Appraisals and Inspection Reports Contain Works of Art.
Portions of appraisal reports and inspection reports meet the definition of Art, in the same way that the arrangement of the words in a song meet the definition of Art.
Property appraisers and home inspectors are usually ICs when brokers involve them in real estate transactions. This means that brokers, lenders, and others need to treat the reports with the same respect they afford to the photographs and website designs.
Anyone who shares a copy of a report needs to ensure they have a written copyright assignment or license to make use of the report in that manner.
A common mistake that I see is when one broker asks another broker if it is OK to pass along a copy of the report. The broker in possession of the report rarely has obtained permission from the one who owns the copyright!
Risk Management Recommendation:
Each business should review its procurement processes to see if it needs regularly to use Art that is produced by ICs. This is an opportunity to insert up front a step for obtaining a written copyright assignment or license instead of chasing it ad hoc after-the-fact.
Please note: the above post contains educational information. It is not intended as legal advice. Engage an attorney who is licensed in your state to get advice on dealing with any specific legal issue.
© 2019 Michael S. Oswald