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Publications / Intellectual Property

23 Jul 13
Freelancing with risk

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Online freelance websites such as freelancer.com.au, 99designs.com.au and designcrowd.com.au are examples of popular websites that specialise in acting as an intermediary between clients and designers.  The websites provide a cost effective way to create amongst other things logos, stationery, websites and merchandise.  However the risks they pose to business are often misunderstood or simply ignored.

How they work

Freelance websites allow a client to upload a design brief and engage designers to complete the work for a fee.  For example, clients may want a logo designed for their business.  To do this, they upload a design brief for their logo to the freelance website and invite designers to submit competing briefs for the work.  Once the client engages a designer, the work is completed for the client and payment received.

Some freelance websites also offer off-the-shelf designs (such as website templates).   While the works created by freelancers through these websites are often cheaper, they are usually delivered without assigning important intellectual property rights to the work such as copyright in favour of a limited licence.

Risk to business

There are legal risks associated with engaging online freelancers.  Questions remain about the rights you hold in the design, whether use of the design will infringe third party rights and how any disputes between parties are resolved.

Copyright in a work (such as a logo) generally resides with the creator unless there is an agreement in writing to transfer it to the client.  Therefore, it is very important to fully understand the rights you are being granted for works you have commissioned through freelancing sites.  In some cases, the designer may assign all rights (including copyright) in the work to the client while in other cases the client may only be granted a limited licence to use the work (which may not include the right to sublicense or register the work as a trade mark). 

It is also important to verify in the engagement agreement with the freelancer the specific rights you are being assigned.  Any misunderstanding could become difficult to resolve as most freelancing websites make it clear in their terms and conditions they are not a party to the transaction, rather they serve as an intermediary between clients and designers.  This means the freelance website is not obliged to remedy any dispute between client and designer, making a timely resolution potentially difficult to reach.

Aside from the rights associated with a work created by a freelancer, a level of concern may exist regarding freedom to use the work without infringement of third party rights.  Most freelancing websites require designers to guarantee they hold the necessary rights to the content they are developing for the client; however these assurances may not be sufficient to protect the integrity of designs.  A prudent designer may conduct clearance searches before completing the work to ensure it does not breach any existing rights (such as trade mark and copyright).  However, given that anyone can become a designer on these websites, simply assuming the designer has taken the necessary precautions is likely problematic.  For instance a designer may plagiarise someone else’s work and submit it as their own, or worse, submit an already registered trade mark or design.

Lessons

This being said, online freelancers can serve as a great low cost tool for business.  Before engaging an online freelancer, you should:

  • thoroughly check the terms and conditions for the work you are purchasing.  It is very important to consider if you will be granted all rights in the work or only a limited licence to use it
  • consider if the designer is reputable with positive feedback as you will more than likely be held liable for use of a work that constitutes copyright or trade mark infringement.  Given the obvious problems in locating the designer (who could well be situated anywhere in the world), it could become exceedingly difficult to pursue the designer should the need arise, and
  • be sure to arrange for clearance searches before using a new design or logo and file an application for a trade mark to protect the brand.  As trade marks are registered on a country by country basis, if you intend on using your design overseas you will also need to conduct clearance searches in each foreign country to ensure your design is available for use and registration.

If you require assistance with copyright, the filing of trade mark applications, clearance searches or general advice in matters relating to Intellectual Property, please contact our team.


Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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