Walmart's Lesson in Copyright Law
What comes as a surprise to many, including retail giants such as Walmart, is that even if you hire someone to perform services for you, it does not mean that you own the copyright in the works created by that individual or company.
Walmart learned this lesson when it terminated a small Kansas video production company that was hired on a handshake to videotape the ins and outs of Walmart's business for more than two decades. The company, Flagler Productions, Inc., which owns the copyrights in the large archive of Walmart video footage began selling the footage to the public, including personal injury attorneys who are suing Walmart after Walmart terminated the company.
Below is Part 5 of Dan Rather's report "A Sudden Explosion" wherein he interviews an attorney who represents children who were severely burned by a gasoline container sold at Walmart. The report shows video footage from Flagler Production's archive (starting at approx. 3:19/9:08) of Walmart executives mocking the gas cans:
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How did this happen? Under copyright law, the copyright in a work initially vests with the author of the work, unless the work is created by an employee within the scope of his or her employment, or the work is specially commissioned or ordered, falls within one of the nine narrow statutory exceptions, and the parties agree in advance in writing that the work is a work-for-hire. Absent the foregoing, the copyright initially vests and remains with the author unless there is an assignment of copyright, which MUST be in writing. In Walmart's case, they had nothing more than a handshake.
What does this mean for attorneys? It stresses the importance of truly knowing your client's business. Have they hired any outside individuals or companies to perform work on their behalf and what exactly are they doing for your client — developing software, creating websites, writing content, photographing, videotaping, creating drawings, designs, logos, graphics, etc…?
On this flip side, if you represent the individuals or companies that are hired to create the works, do your clients understand the difference between the tangible work and the intangible copyright in the work? To help minimize the risk of future disputes between your client and their clients, it may help your clients to know they can distinguish between creating the tangible work for their clients and providing their clients with a complete written assignment of all copyrights in the work; in most cases they can also command a higher price for the latter.
Walmart learned this lesson when it terminated a small Kansas video production company that was hired on a handshake to videotape the ins and outs of Walmart's business for more than two decades. The company, Flagler Productions, Inc., which owns the copyrights in the large archive of Walmart video footage began selling the footage to the public, including personal injury attorneys who are suing Walmart after Walmart terminated the company.
Below is Part 5 of Dan Rather's report "A Sudden Explosion" wherein he interviews an attorney who represents children who were severely burned by a gasoline container sold at Walmart. The report shows video footage from Flagler Production's archive (starting at approx. 3:19/9:08) of Walmart executives mocking the gas cans:
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How did this happen? Under copyright law, the copyright in a work initially vests with the author of the work, unless the work is created by an employee within the scope of his or her employment, or the work is specially commissioned or ordered, falls within one of the nine narrow statutory exceptions, and the parties agree in advance in writing that the work is a work-for-hire. Absent the foregoing, the copyright initially vests and remains with the author unless there is an assignment of copyright, which MUST be in writing. In Walmart's case, they had nothing more than a handshake.
What does this mean for attorneys? It stresses the importance of truly knowing your client's business. Have they hired any outside individuals or companies to perform work on their behalf and what exactly are they doing for your client — developing software, creating websites, writing content, photographing, videotaping, creating drawings, designs, logos, graphics, etc…?
On this flip side, if you represent the individuals or companies that are hired to create the works, do your clients understand the difference between the tangible work and the intangible copyright in the work? To help minimize the risk of future disputes between your client and their clients, it may help your clients to know they can distinguish between creating the tangible work for their clients and providing their clients with a complete written assignment of all copyrights in the work; in most cases they can also command a higher price for the latter.