1. Preserving Copyright in Your Samples, Specs, Promos and Mockups A GAMA White Paper 101 Townsend Street, Suite 312 San Francisco, CA 94107 +1 909.447.9819 consult@gamallp.com gamallp.com

2. Preserving Copyright in Your Samples, Specs, Promos and MockupsINTRODUCTION: A BRIEF OVERVIEW OF COPYRIGHT LAW So what does copyright law protect? U.S. copyright law protects a work from the moment it is created, or fixed, in a tangible medium of expression. This means as soon as you create a work that is original, has at least some small degree of creativity, and takes the form of something visible, tactile or physical, federal law protects your work. Copyright protection ensures only you have the right to reproduce, transmit, distribute, perform and make derivative copies of your work. As the original author of the work, copyright protection affixes automatically, as soon as you create your work. You do not need to register your work, publish your work or provide any s or other forms of copyright notice on your work (though doing all of these is highly recommended). If you are a corporate author, all of your exclusive rights under copyright last for 120 years from the date it is created, or 90 years from the date it is published. If you are an individual author, your copyright will last for your entire life, plus an additional 70 years. So eat healthythe longer you live, the longer your copyright lasts! If copyright belongs solely to the creator of the work, why should I worry about losing copyright in my samples, specs, promos or mockups? Good question. Like any federal law, there are numerous exceptions to an otherwise simple rule. For example, if your work is a work made for hire, it might actually be your client, not you, who gets copyright in the work. And even if you did have copyright, its possible you may have licensed or transferred some or all of your rights, either intentionally or by accident. The following white paper is intended to outline each of these scenarios and provide practical solutions for protecting your intellectual property.Last Revised 1/23/12 2011 Gagnier Margossian LLP Page 2 of 10

3. Preserving Copyright in Your Samples, Specs, Promos and Mockups I. WORKING FOR HIRE Even though you may be the artist, designer, author or creator of a work, if you work for someone else, they may be treated as the original owner of the copyright. These are called works made for hire. In these cases, you never get copyright in your work. There are two ways a work can be a work made for hire: (1) you are an employee and you create the work for an employer, or (2) you enter into a written work for hire agreement to create a work for someone else. Both of these scenarios are discussed below. A. Are You In an Employee-Employer Relationship? As an employee, the copyright in any work you create belongs solely to your employer not to you. As an independent contractor or other non-employee, the copyright in the work you create will usually belong to you. So which one am I? This may seem like an easy question to answerbut both federal copyright law and courts have complicated the inquiry of when someone does work as an employee. Even if you have not signed a formal employment agreement, you still might be considered an employee. Conversely, even if you have signed a formal employment agreement, you might be considered an independent contractor. The law generally ignores what the hiring party or the hired party call each other. Instead, the law looks at whether the hiring party controlled the manner and means by which the product was accomplished. In other words, the more control a hiring party has over the work, the more likely it is the hired party will be considered an employee. On the other hand, if the hired party made most of the choices regarding how to complete the project, it is more likely the hired party will be considered an independent contractor. Okay, but seriously, which one am I? In some cases, the answer is easy.Last Revised 1/23/12 2011 Gagnier Margossian LLP Page 3 of 10

4. Preserving Copyright in Your Samples, Specs, Promos and Mockups For example: a corporation hires you, pays you an annual salary, tells you what to do and when to do it, makes you work bad hours with little paid leave and forces you to report to a smug, over-caffeinated middle manager. The very definition of employment. Then there is the other end of the spectrum: a single client asks you to build his website, makes general suggestions as to design but leaves the artistic details in your capable hands, sets one deadline for the project but does not care whether you build the site during business hours or at 3 a.m. while watching M.A.S.H. reruns, and pays you one lump sum for the work. Ah, the life of the independent contractor. Few cases are so clear-cut. In circumstances where the relationship between the hiring party and the hired party is more ambiguous, a court will weigh a number of factorsthe so-called agency factorsto help determine the nature of the relationship. The table below summarizes these factors, and explains how these might indicate either an employee-employer relationship or an independent contractor relationship. Suggests Suggests FACTORS Employment Independent Contractor Relationship Relationship What skill is Creating the work required Creating the work required required to little skill great skillcomplete the work? Who provided the The hiring party provided tools or materials The hiring party provided little most or all of the tools andused to complete the or no tools or materials materials work? Most or all of the work was Most or all of the work wasWhere was the work performed on or at the hiring performed somewhere other completed? partys premises than the hiring partys premises What is/was the It was a long-term It was a short-term relationship duration of the relationship involving more involving one or only a few relationship than one project. projects.between the parties? Could the hiring The hiring party had The hired party had no party assign complete discretion to assign obligation to accept anyadditional projects? additional projects. additional projects. The hiring party had total Who set the work The hired party performed the discretion to set strict work hours? work whenever they wanted. hours. The hiring party paid the The hiring party paid the hired What was the hired party a salary, hourly party a single check or lumpmethod of payment? wages, or some other sum, or a few installments, on a Last Revised 1/23/12 2011 Gagnier Margossian LLP Page 4 of 10

5. Preserving Copyright in Your Samples, Specs, Promos and Mockups recurring payment. per project basis. Only the hiring party was The hired party was able to Who may hire and able to recruit, hire and pay recruit, hire and pay assistants pay assistants? assistants to help out with to help out with the work the work. The hiring party creates The hiring party never creates Was the work part similar work all the time. similar work. They came to theof the hiring partys They were only outsourcing hired party specifically because regular business? or using the hired party for this type of work is beyond their additional help. area of expertise. The hiring party is a fully The hiring party is just someIs the hiring party a formed partnership or dude who needed help on a business at all? corporation. project. The hiring party providedDid the hiring party medical or dental insurance, offer an employee life insurance, a 401(k) or The hiring party offered nothingbenefits to the hired other pension or retirement except cash. party? package, or any other non- salary benefits. The hired party filled out a W-4 form. Portions of payment were withheld from The hired party did not fill out a What sort of tax the hired partys checks for W-4 form. Nothing was treatment did the tax purposes, including state withheld from the hired partyshired party receive? and federal withholdings checks. and Social Security withholdings. So which one are you? Do more of the factors lean toward independent contractor or toward employee? Sometimes business relationships are so ambiguous different courts will come to different results. None of these factors on its own will determine the nature of the relationship with any certainty, but all of the factors are relevant. Some courts have also indicated that the last two factors (employee benefits and tax treatment) might be the most important. The Bottom Line: When you enter into a business relationship keep these factors in mind, especially if you are intent on retaining copyright in your work. Even if you are only creating a spec or mockup, if you can be classified as your clients employee your client will own copyright in all the work you do for them. If you have not yet entered into a business relationship (for example, if a client has expressed interest but has not hired you to do any work) you cannot be considered an employee. Any work you do before you are actually hired is almost always considered your own work, and copyright will generally rest safely with you. Last Revised 1/23/12 2011 Gagnier Margossian LLP Page 5 of 10

6. Preserving Copyright in Your Samples, Specs, Promos and Mockups B. Did You Enter Into an Agreement to Create a Specially Commissioned Work? Even if you cant be classified as an employee, if you signed a work for hire agreement, your client might own the initial copyright in your specially commissioned work. They might even own copyright in the sample work you made for them under the agreement. A work for hire agreement is only valid if it meets two criteria: First, the agreement must be in writing and must be signed by you and the hiring party. Second, the work you make must fall into one of the following nine poorly named categories: 1. Contributions to a collective work 2. Parts of a motion picture or other audiovisual work. 3. Translations 4. Supplementary works 5. Compilations 6. Instructional texts 7. Tests 8. Answer materials for a test 9. Atlases A supplementary work? A collective work? English please Here are a few examples of some of the more confusing categories: Contributions to a collective work include things like encyclopedia, magazine or newspaper articles. Compilations are collections of already preexisting works arranged in new ways. Supplementary works analyze, summarize or provide some kind of insight about other works these might include forwards, introductions, conclusions, charts or graphs. Atlases are, of course, collections of maps, bound in book form. Yes, atlases made the list. While most works do not fall into these categories, applying these categories is a fact-specific inquiry. If you are unsure whether your work falls under one of these categories, a GAMA attorney can help you figure this out. The Bottom Line: If you did not sign a work for hire agreement, your work is not a specially commissioned work for hire. If your work does not fall into any of the nine categories, your work is not a specially commissioned work for hire. Even if you are unsure whether your workLast Revised 1/23/12 2011 Gagnier Margossian LLP Page 6 of 10

7. Preserving Copyright in Your Samples, Specs, Promos and Mockups might fall into one of these categories, you can always be sure you are not creating a specially commissioned work by refusing to sign any work for hire agreement. II. WHEN A CLIENT IS TREATED AS AN AUTHOR FOR EXERCISING OVERWHELMING ARTISTIC CONTROL Even though you might perform the act of creating your sample, spec, promo or mockup, if your client had sole or very nearly sole control over the artistic details of the work, the law might treat them as the author. Heres an example: An award-winning filmmaker develops a storyboard for a documentary detailing the discovery and salvage efforts of the Titanic. He details cinematography, the type and amount of lighting to be used, specific camera angles, and other detail-intensive artistic elements of the film. To bring his vision to the screen, he accompanies the salvage crew to the wreck site so he may collect shots using underwater cameras and lighting rigs. But the filmmaker himself does not operate the cameras, the lights, or any of the underwater vessels necessary to shoot the film. So who holds copyright? The cameramen actually made the work. But if the final product looks exactly like what the filmmaker had in mind, isnt he the author? In this scenario, even though different cameramen, lighting technicians and grips recorded the film, the court determined the filmmaker was the sole author of the work. This was because the final product duplicat[ed] his conceptions and visions of what the film should look like. In most creative- or content-develop scenarios, it is unlikely a court will find that a client exercised such a high degree of artistic control over your work that the final product actually duplicated the clients conceptions and visions. The Bottom Line: As long as you, the designer, developer or content creator, exercise at least some small degree of creative control over the final product, you will usually be credited as the author.Last Revised 1/23/12 2011 Gagnier Margossian LLP Page 7 of 10

8. Preserving Copyright in Your Samples, Specs, Promos and Mockups III. GIVING AWAY COPYRIGHT: THE EXPRESS TRANSFER Okay, so you arent an employee, you didnt create a specially commissioned work, and you exercised some creative control over your work chances are you are the original copyright holder. But did you give away any of your rights to someone else? As a copyright holder, you are allowed to transfer some or all of your rights to another person or organization. You can assign copyright that is, give all of your rights away; or you can license one or a few exclusive rights grant someone permission to use your work in certain ways. Licenses can be exclusive, where you give only one person permission to use your work or they can be non-exclusive, where you grant someone permission to use your work, but reserve the right to grant that same permission to others. All transfers, except non-exclusive licenses, must be made in writing and signed by the copyright holder. The Bottom Line: Be on the lookout for transfer agreements hidden in contracts with your clients. If you sign a contract that assigns your copyright to your client, you will lose all rights in your work. If you are not sure whether a contract you signed granted an assignment or license, or what the license covers, a GAMA attorney can help you figure it out. IV. GIVING AWAY COPYRIGHT: THE IMPLIED LICENSE Heres where things get tricky. What happens if you do work for a client, the client pays, and both you and the client have some understanding of how your work will be used by the client, but neither of you sign any agreement regarding copyright. Enter: The Implied Non-Exclusive License (alias: a legal nightmare). In situations where it is apparent from the relationship between you and your client how the work was to be used by the client, the court will imply or assume a license exists, even though you and the client never executed a written agreement. But what this license allows a client to do with your work is an open question one a court will have to interpret based on the specific facts at issue and the standard behavior for the industry.Last Revised 1/23/12 2011 Gagnier Margossian LLP Page 8 of 10

9. Preserving Copyright in Your Samples, Specs, Promos and Mockups At the very least, this type of license is non-exclusive. You can grant similar licenses to others, and you are still free to use your work in any way you like. The issue of implied non-exclusive licenses is especially pernicious in situations where you are creating a sample, spec, promo or mockup for a potential client. For example, if you design a promotional or sample work to try and land a client, what expectations do you and the potential client have with regards to the sample work? You might reasonably expect to retain all rights in your work, while they might reasonably expect to be able to use the work for their own future commercial use. Theres a good chance a court will interpret this kind of transaction to grant a license limiting the clients use of the promo or sample work to entirely non-commercial and private purposes. But then again, theres a chance a court will not. The Bottom Line: Clarity in a written agreement at the outset of a business relationship can avoid headaches down the road. In cases where you provide your various samples, mockups and iterations to a current client, a clear written license agreement can protect both parties from misunderstanding and future legal costs. This also ensures you dont leave your copyright ownership in the hands of a fickle or unpredictable judge. Having even potential clients sign a short license agreement can protect your promotional or sample works, too. A Quick Note on Terminating An Express or Implied Transfer: Even if you transfer your copyright, it might be possible to terminate your transfer and recover all of your rights after a number of years. If you think you may have transferred your copyright and are interested in terminating the transfer, a GAMA attorney can help. CONCLUSION: THE UPSHOT OF PRESERVING COPYRIGHT IN YOUR SAMPLES, SPECS, PROMOS AND MOCKUPS 1. If you are an employee, you never have copyright in your work. 2. If you are not an employee, but the client has exercised overwhelming artistic control, your client might be treated as the copyright owner.Last Revised 1/23/12 2011 Gagnier Margossian LLP Page 9 of 10

10. Preserving Copyright in Your Samples, Specs, Promos and Mockups 3. If you sign a work for hire agreement with a client, and your work falls into one of the nine categories mentioned above, your client will be treated as the copyright owner. 4. Even if you are the original copyright holder in your work, you can transfer your rights by executing a written agreement. 5. Even if you dont sign a written agreement, you can grant an implied non-exclusive license to your client. You can ensure this doesnt happen by requiring your client to sign a clearly worded license. 6. Even if you transferred some or all of your rights, you might be able to get them back after a period of time with the help of an attorney. Works Cited Cases Effects Associates v. Cohen, 908 F.2d 555 (9th Cir. 1990). Feist v. Rural Telephone Co., 499 U.S. 340 (1991). Lindsay v. R.M.S. Titanic, 52 U.S.P.Q.2d 1609 (S.D.N.Y. 1999). Reid v. CCNV, 490 U.S. 730 (1989). Statutes and Other Materials U.S. Copyright Act of 1976, as amended, 17 U.S.C.A. 101, et seq. (West). Restatement (Second) of Agency, 220 (1958).Last Revised 1/23/12 2011 Gagnier Margossian LLP Page 10 of 10