Understanding how copyright interacts with employment relationships is important for employers, as it helps them protect their business interests and maintain control over copyrighted works created within their organizations. This article outlines some of key employer rights and considerations regarding copyright in Canada.

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Copyright and the Copyright Act

Copyright in Canada is governed by the Copyright Act (the “Act”). The Act provides authors with exclusive rights over their original works, such as the right to reproduce, distribute, and license their creations. It is noted that Copyright is not limited to “artistic” works. Copyright extends to works valuable to businesses, such as website contents, catalogs, logos, etc.

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Employer Ownership of Copyright: The Default Rule

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In the context of employment, the Act includes provisions that alter the default ownership rules. Under section 13(3) of the Act, copyright in works created by employees in the course of their employment typically belongs to the employer, unless there is an agreement to the contrary. In short:

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1. The author of the work must be in the employment of another person;
2. The work must be made by the author in the course of employment; and
3. There must be no agreement to the contrary.

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In the absence of an employment relationship, the general rule in Canada is that the author owns the copyright in an original work. Accordingly, when a work is created by an independent contractor, the above does not apply and the contractor retains the copyright. Payment for services does not translate into the transfer or ownership of the copyright in the work. In order to own a work created by a contractor, a written agreement explicitly transferring the ownership of the copyright must be implemented. Without such an agreement, the ownership in the copyrighted work is not transferred, and the rights remain with the author.

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Written Agreements and Customizing Copyright Ownership

We recommend employers to use written agreements to clarify the terms and conditions of employment, including copyright ownership. Employment contracts can include terms that

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• Confirm that all works created during employment are owned by the employer;
• Extend employer ownership to works created outside regular duties but using company resources; and
• Address moral rights, which allow authors to protect the integrity of their works.

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Even if the employer owns the copyright, employees retain their moral rights unless they explicitly waive them. Moral rights are granted exclusively to the author and include the author’s right to maintain the integrity of the work and the right to be cited as its author. Importantly, moral rights cannot be assigned, even if the employer is to be the owner of the copyright.  Accordingly, it is important that any employment agreement provide for a waiver of the employee’s moral rights.

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For independent contractors, contracts should explicitly include clauses transferring copyright ownership to the employer.

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Best Practices for Employers

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To protect their rights and ensure compliance with copyright laws, employers should:

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1. Draft clear employment and contractor agreements, including specific terms addressing copyright ownership and moral rights waivers.
2. Ensure proper classification of workers: distinguish between employees and independent contractors.
3. Educate employees: provide training on the organization’s IP policies, especially regarding the use of company resources and the creation of works.
4. Consult legal professionals: work with legal counsel to ensure contracts and policies align with the Act.

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Conclusion

In Canada, employers generally hold copyright in works created by employees in the course of their duties. While so, written agreements help avoid disputes and ensure clarity. By understanding their rights under the Act and implementing written agreements, employers can safeguard their rights while maintaining productive working relationships with employees and contractors.

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Note to Readers: The information in this article is not legal advice. If you are looking for legal advice in relation to a particular matter, please contact Junki Hong.

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