[Jewelry making - Article 00285] - Re: [Orchid] Need of business advice

[James White]

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> >      Also, my opinion of the legal question (though I am NOT a
> >     lawyer,) is that the 200 designs definitely are your legal
> >     property. YOU owned the copyright when you created to work, unless
> >     you had signed a 'work for hire' agreement with your parents.

>         I don't usually disagree with much you say, but I believe in
>     this case that if she was actually employed by her parents (i.e.
>     receiving a paycheck from them for her work) that the designs very
>     definitely belong to her parents. 

    Unfortunately in this specific case we can't get to the for-sure
    correct answer without having answers to more questions which is why
    both of the above have big qualifiers written into them.
    Unfortunately I also suspect that many readers will fail to note
    those qualifiers and draw the WRONG general conclusions. While the
    first statement suggesting  the original poster (OP) "owned the
    copyright when they created the work..." is clearly backwards, 180
    degrees out of sync with the law, it's conclusion still may be, but
    most likely is not, correct-----but we don't have the facts to KNOW
    that and, in fact, the "facts" may only be determinable in court.
    Some general rules: 

    The law writes sound rules---then codifies exceptions. 

    There are always exceptions to the exceptions. 

    Copyright and patent law are two separate bodies of law which are
    administratively under two different agencies, the US Patent and
    Trademark Office and the Copyright Office of the Library of Congress
    respectively. These two bodies of law work differently so a principle
    applied to one may not be applicable to the other---in fact it may be
    the exact opposite. (More on patents in a moment.) 

    With a PDF reader you can see the entire Copyright law at
    http://www.copyright.gov/title17/circ92.pdf (1.4 MB or get smaller
    chunks at http://www.copyright.gov/title17/). To quote the first part
    of Section 201 "Ownership of copyright (a) Initial
    Ownership.=97Copyright in a work protected under this title vests
    initially in the author or authors of the work. The authors of a
    joint work are coowner of copyright in the work." 

    That's the "sound rule" so on the face of it the creator owns the
    copyright---but wait, there's more! 

    Continuing to quote from exactly where the above quote left off:
    "(b) Works Made for Hire.=97In the case of a work made for hire, the
    employer or other person for whom the work was prepared is considered
    the author for purposes of this title," 

    That's the first of the "codified exceptions" so, if, in fact, the
    physical creator was working "for hire" (defined in Section 101 "A
    'work made for hire' is--(1) a work prepared by an employee within
    the scope of his or her employment;...") as an employee then the
    BUSINESS owns the copyright---but wait, there's more!!! 

    Continuing again to quote from Section 201 just where we left off
    before: "and, unless the parties have expressly agreed otherwise in a
    written instrument signed by them, owns all of the rights comprised
    in the copyright." 

    Bummer, an oral agreement will not suffice to convey any copyright
    rights so by the statements made by the OP the OP does not have any
    copyright rights which means they don't even have the right to make
    derivative works of their own creations---but wait, there's more! 

    While an oral agreement cannot affect copyright rights it certainly
    can establish a contractual obligation to pay commissions or
    royalties to the benefit of the OP. The catch, of course, is
    enforcing an oral agreement. If there are witnesses other than the
    involved parties that would be better for the OP but they can always
    first try persuasion then maybe arbitration then maybe a law suit
    then maybe arbitration (then, of course, maybe back to court if a
    judgement against the BUSINESS isn't paid...)---but wait, there's
    still more!!! 

    We don't know what the OP meant by "200 designs" or parties seeking
    out pieces of her work specifically because of her piece's "look." If
    that is 200 pieces or 20,000 pieces replicated from 200 designs where
    essentially all have the OP's distinctive "signature" "look" and
    customers do, in fact know the "look" comes from her rather than the
    BUSINESS then she may actually own her own trademark and could create
    additional (but not duplicate or "derivative") pieces with her
    "signature" "look." Many state laws would, under the principle that
    you cannot deprive a person of their earning power, likely support
    such additional pieces. But, all that said, this is clearly a
    situation where the services of an EXPERIENCED IP attorney will be
    NECESSARY ***BEFORE*** proceeding along those lines----and the OP
    will have to be willing to go to court if necessary. Without that
    willingness "right" makes no difference at all. 

>     When an inventor invents something while working for a corporation
>     and while being paid for his time to do it, the corporation owns
>     the patent, not the inventor. 

    This is USUALLY correct for patents but NOT due to the LAW. The LAW
    explicitly ONLY grants patents to the actual inventors as required
    by the US Constitution. Most companies therefore require that anyone
    working for them in a product or process creative capacity, by
    contract, pre-assign any patents they get (for inventions related to
    their company work) to the company. (A number of states have explicit
    laws that allow inventors working outside the company and on
    inventions not related to the company to own such patents. And there
    is some case law on the subject also.) However, even in the absence
    of such a pre-assignment agreement the company on whose time and/or
    equipment and/or with whose materials are used may still have some
    "shop rights" (and perhaps more) in such non-pre-assigned
    patents/inventions even though the inventor will retain the patent
    rights. "Shop rights" are generally a state law specific concept and
    vary from state to state but at the very least likely would permit
    the company the right to make and/or use the invention at least
    internally without interference from, or compensation to, the
    inventor. 

>      That being said, however, the reality is that, legally, if no
>     copyrights were applied for it doesn't really matter if she wants
>     to just go back and duplicate the designs again. 

    This shows a fundamental misunderstanding of Copyright law.
    Copyrights need NOT be "applied" for----they exist WITHOUT
    registration the instant a work is in a fixed form. They can be
    registered and that registration does give the owner more rights and
    power under the law and even more rights and power if the
    registration is done within 3 months of "publication" (whatever that
    means in the creation/sale of jewelry works). 

>      It would be highly unlikely that her parents would pursue her
>     legally anyway if she simply started making all of the designs
>     again from scratch. 

    Probably true. In fact the costs of litigation on such a matter, or
    just starting to explore the process, likely would exceed any
    possible recovery within the first few hours of planning to go to
    court. Undoubtedly that cost/benefit tradeoff is the major reason
    most jewelry does not have it's copyright REGISTERED even though
    copyright rights still exist and could be greater with registration. 

>      I suspect the concept that without true copyright, designs can be
>     replicated, is going to ruffle a few feathers on Orchid, but I have
>     recently had extensive legal advice presented to me on this very
>     topic and unless copyrights were applied for there isn't a whole
>     lot anyone can do about her decision to replicate her own designs. 

    There is no such concept as "true copyright," only copyright and
    registered copyright both of which are real, true, whatever you want
    but fully legitimate. The real catch is that without registration you
    cannot get statutory damages or attorney's fees on any infringement
    occurring before the registration unless that infringement --and
    actual registration -- was within 3 months of "publication" (see
    Chapter 4). 

>      However I agree with you and the other respondents that the
>     problem here is not really copyright or the designs but how to
>     resolve the more general issues with her parents. 

    Likely true---and probably messier than any dealings with copyright
    or trademark law. But again there are too many unknowns to give much
    specific useful advice. For example was the father (and/or mother)
    always this way or is it recent and what caused/causes it? Are there
    other family owners besides the parents? What is the businesses legal
    structure? I would think the OP should definitely talk to an IP
    attorney about the copyright/trademark issues above and more then
    make her best decision on how to proceed on those issues either
    consistent with or inconsistent with "family mending" actions but
    trying to keep the "legal" and "family" as separate as possible. 

James E. White
Inventor, Marketer, and Author of "Will It Sell? How to Determine If
Your Invention Is Profitably Marketable (Before Wasting Money on a
Patent)"  Info Sites:   www.willitsell.com    www.inventorhome.com,
www.idearights.com www.taletyano.com www.booksforinventors.com

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