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When paying for a design doesn't make it yours
By Suzan Flamm
November 10, 2009
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| Suzan R. Flamm, Esq. is assistant general counsel of the Jewelers Vigilance Committee (JVCLegal.org), which provides general educational resources and jeweler-specific advice. The advice is strictly the opinion of the JVC. Visit JVCLegal.org for important legal compliance information pertaining to the manufacture, sale and marketing of fine jewelry. |
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When a bench jeweler designs something for a retailer, who owns the designs? The answer depends, as seen in the case study below, which is loosely based on various inquiries made to the Jewelers Vigilance Committee (JVC).
Facts of case study
Faced with very slow sales, a retail jeweler was forced to cut staff, including a bench jeweler who had designed and produced several pieces during his employment. The retailer verbally agreed to hire the bench jeweler as an independent contractor if needed.
As the holidays approached, the need arose, and the retailer asked the former employee to design a bracelet, which he did, using his own equipment at home to make several pieces. He was paid as an independent contractor. Neither party discussed the design project while it was in progress and neither registered the bracelet design with the U.S. Copyright Office.
After the bracelets turned out to be strong sellers, the retail jeweler asked an in-house employee to produce additional copies of the design, which he then offered for sale. The retail jeweler later found out that the bench jeweler was producing the same bracelet designs for a competing retailer.
Claiming that the bracelet design belonged to his company, the jeweler demanded that the bench jeweler not make or sell the additional pieces. But the bench jeweler claimed that he owned the copyright, and demanded that the retail jeweler stop producing the design.
The basics of copyright law
The U.S. government protects original designs through copyright law, which covers drawings of a piece of jewelry, or the actual piece.
A jewelry design is automatically copyrighted as soon as it is in tangible form, even if it is not registered with the copyright office. But, if someone wants to file a copyright infringement suit, the copyright must be registered first.
A copyright immediately becomes the property of the designer, unless it is a "work made for hire," in which case the employer--not the employee--is considered to be the designer.
Only the designer, or anyone to whom he or she gave rights, can rightfully claim the copyright.
The question in this case was whether or not the bracelet was a "work made for hire." If so, the retail jeweler can claim the copyright. However, the copyright law considers a work to be "made for hire" only under two circumstances: when the work is prepared by an employee within the scope of his or her employment; or when the work is specially ordered or commissioned for one of nine designated uses, and there is a written agreement between the parties specifying that the work is made for hire.
The contractor owns copyright
Applying the law to this case makes it clear that the bench jeweler owns the copyright. First, when the bench jeweler designed the bracelet, it was not "within the scope of employment." Second, there was no written agreement specifying that the design was a work made for hire.
Even if there was a written agreement, the design would only have qualified as a work made for hire if it fell within one of the nine designated uses specified in that provision. The JVC determined that in these circumstances, the jewelry design might not have made the cut.
The JVC concluded that the retailer infringed the bench jeweler's copyright when his employee copied the bracelet. This was a disappointing surprise to the retailer, who believed he owned the design since he paid the bench jeweler to create it.
Ultimately, the retail jeweler negotiated with the bench jeweler to buy the copyright, allowing him to copy and sell the design exclusively.
The next time the retail jeweler needs a bench jeweler's services he will seek different terms. He will enter into an explicit written agreement, including a back-up clause stating that if the work does not qualify as "for hire," then he may obtain the exclusive rights through an assignment.
Going forward, the bench jeweler will submit his bracelet design to the U.S. Copyright Office for registration (which can be done online via Copyright.gov) so that he is positioned to challenge any potential future infringements.
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