Navigating the Freelance Jungle, Part 3 of 3
by Frank Taney, 1 Sep 2009

Frank Taney, Jr. is a shareholder in the Philadelphia law firm of Buchanan Ingersoll & Rooney PC, where he chairs the firm's Information Technology Litigation Practice Group and is a member of the firm's Technology Transactions Group. Frank's litigation practice focuses on a variety of substantive areas, including information technology, intellectual property, antitrust and construction litigation.

In addition to his law practice, Frank is active in the Philadelphia regional business and entrepreneurial communities, and is a member of numerous boards of local organizations.

This is the third in a series of three articles on "safe" contracting for freelancers. This installment examines some basic intellectual property ("IP") concepts and discusses basic techniques freelancers can use to avoid unintended consequences with respect to the ownership and use of IP.

There are four main categories of IP. Copyright protects original works of authorship (such as literary, pictorial, audiovisual or sculptural) capable of being fixed in a tangible medium. Patents protect inventions, which can be manufactured articles, processes, compositions of matter, and even plants. Trademarks are words, phrases, or symbols that identify a merchant as the source of a good or (for a servicemark) service. Trade secrets are skills, processes or methods, not known to the general public, that provide the possessor with an advantage in practicing the trade at issue.

While there is not enough space here for an exhaustive discussion of IP law, generally, freelancers can protect copyrights, patents and trademarks by filing applications, which become public, for federal protection. On the other hand, freelancers protect trade secrets by keeping them secret, which means restricting the use and disclosure of the trade secrets.

When contracting with a client, freelancers need to retain sufficient rights to use and reuse the content they create, as well as any underlying skills and methods that they use to create or deliver the content or services at issue. What is "sufficient", however, will vary from case to case.

If the content incorporates elements that the freelancer will reuse with other clients, the freelancer must specify that the freelancer retains these elements, while providing the client with a non-exclusive license to use the content for the client's required purposes. Similarly, the freelancer must specify that the freelancer retains ownership of the know-how, skills and methodologies that the freelancer used to create the content, again so that the freelancer can deploy these for other clients. With sufficient explanation, most ethical and reasonable clients will understand that freelancers have a legitimate commercial interest in retaining rights in these items, and that retention of these rights allows the freelancer to price the content and services affordably.

Freelancers also need to impose appropriate limits on their clients' use or disclosure of IP incorporated into the freelancer's work, or of the IP to which the client is exposed. The freelancer should prohibit use of the freelancer's content beyond that scope that which the freelancer intends to permit. This scope is typically expressed in terms of copying, modification (also known as the creation of derivative works), display and distribution of the content. As in other areas, in negotiating the scope of the permitted use, the freelancer should not be bashful in explaining the economic consequences of allowing overly broad use of the content to the client. A client making indiscriminate use of the freelancer's content is literally taking food off the freelancer's table.

To the extent to which the engagement exposed the freelancer's trade secrets to the client, the freelancer should expressly prohibit use or disclosure of the trade secrets to third parties or for purposes beyond the intended subject matter of the contract. The freelancer should also specify the manner and extent to which the client may reproduce or display the freelancer's trademarks or servicemarks, so that the client does not intentionally or unintentionally use these marks in a way that confuses the consuming public, weakens or tarnishes the marks.

In sum, freelancers (preferably in conjunction with competent counsel) need to give careful consideration to the creation, ownership and protection of IP. Freelancers should do so before entering into an engagement with a client.

Mr. Taney's comments are general and information in nature, and not intended as legal advice.