Who Owns the Copyright, Outside Counsel or the Client?

Last year the New York Law Journal published my article “Copyright and the Contract Drafter.” I’d now like to revisit who owns copyright in a contract, outside counsel or the client.

To set the scene, here’s an extract of my article:

A client asks its law firm to draft a form of agreement for a new kind of transaction. The client ends up paying the law firm plenty for their work, and the client’s personnel spend many hours helping the lawyers grasp the technical and business nuances that have to be addressed in the agreement. Subsequently the client finds that law firm has cheerfully been selling to other clients a substantially identical form of agreement. From a copyright perspective, the law firm is at liberty to do so, and it’s unlikely that a law firm would agree to forget that it had ever worked on a given agreement. Perhaps the best that the client could hope for is that the law firm would agree not to use that form of agreement in representing the client’s competitors.

I’m revisiting this issue because Eric Goldman—he of the Technology and Marketing Law Blog—told me about this item on the Patry Copyright Blog. It discusses the case of Pods, Inc. v. Porta Stor, Inc., 2007 WL 1226740 (Fed. Cir. April 27, 2007). The plaintiff alleged that the defendant had copied a rental agreement, thereby violating the plaintiff’s copyright. The district court granted summary judgment on the copyright issue, holding that because the plaintiff’s outside counsel had drafted the rental agreement, the plaintiff did not own the copyright.

On appeal, the Federal Circuit reversed the grant of summary judgment, sending the copyright claim back for trial. The court conclude that based on testimony given at trial, “A jury could have believed that the contributions of the [plaintiff’s] employees were sufficiently significant to find the employees joint authors of the work.”

When the case goes back to the district court, what kind of hurdles would the plaintiff face in establishing that it was joint author of the rental agreement? (Although the Federal Circuit referred to the employees as possibly being joint authors, it’s the plaintiff who would be the author if the employees were under a work-for-hire arrangement. See Patry on Copyright § 5:18.)

Client involvement in drafting a contract might take several forms. The client might simply respond to questions from outside counsel regarding the nature of its business, leaving outside counsel to structure the transaction, determine what issues need to be addressed, and come up with appropriate wording. Even if the client then signs off on the contract, this level of involvement would be insufficient to make it joint author.

Alternatively, the client might participate more actively in the process, requesting that certain issues be addressed. But by itself that too would likely be insufficient. On this topic, Patry on Copyright § 5:14 says as follows:

Every court to decide the issue has correctly held that, in order to be a joint author, one must contribute expression, rejecting the view that the contribution of mere ideas or other unprotectible material may make one a joint author so long as the other party contributes expression.

In order for a client to be joint author of a contract, its employees would need to contribute wording to the contract. And more than a negligible amount:

[T]he inquiry into whether a putative joint author has contributed the requisite amount of expression is no different in principle from the inquiry into whether a sole author has imbued the work with a sufficient amount of creative material to satisfy the originality requirement.

Patry on Copyright § 5:18.

The notion of a client contributing significant amounts of wording to a contract seems unlikely:

In specialized areas requiring professional or high-level training, such as architecture, computer programming, motion pictures, photography, and graphic works, it may not be easy to find a joint work where the commissioning party does not have training in the field.

Patry on Copyright § 5:18 (footnotes omitted). I’d be willing to add the law to that illustrative list of specialized areas.

So I believe that my NYLJ article is still sound, although if I were writing it now I’d mention the issue of joint authorship. But I confess to feeling a little foolish to be offering these thoughts, since I’m relying entirely on William Patry’s blog and treatise. No doubt he’ll offer his own definitive analysis in due course.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.