Copyright Ownership in Employment & Freelance Contracts in India

📘 Introduction

Who owns the copyright in work created by an employee or freelancer? This is one of the most commonly misunderstood areas of copyright law in India. Whether you're a startup founder, creative agency, or software company, clarifying copyright ownership in contracts is critical to avoid future disputes.

In this article, we explore the rules governing copyright ownership in employment, freelancing, and commissioned work under Indian law.

⚖️ What Does the Law Say?

Under the Copyright Act, 1957, the first owner of a copyright is typically the person who creates the work. However, there are exceptions based on the nature of employment or contractual agreements.

👩‍💼 Copyright in Employment Contracts

If an employee creates a work in the course of employment, the employer is the first owner of the copyright, unless there is a contract to the contrary.📌 Relevant Section: Section 17(c) of the Copyright Act, 1957

🔍 Key Elements:

• The work must be created during employment

• It must be within the scope of the employee’s duties

• The employment must be a contract of service (not freelance)

💡 Example: A software developer working full-time for a tech company writes code as part of his job—the company owns the copyright.

🤝 Copyright in Freelance and Commissioned Work

Freelancers and consultants are not employees, so the default position is that the freelancer retains copyright, unless there is a written agreement assigning it to the client.

📌 Relevant Section: Section 17(b) and 17(c)

🔍 Key Points:

• The hiring party does not automatically own the copyright

• A written assignment or license agreement is necessary to transfer rights

• Payment for the work does not equal transfer of copyright

💡 Example: A freelance graphic designer creates a logo for a brand. Without a signed copyright assignment, the designer retains copyright even if the client paid for the work.

📝 Why Clear Contracts are Crucial

To avoid ambiguity, contracts should:

• Clearly assign copyright to the employer or client

• Define the scope of work and rights transferred

• State whether the assignment is exclusive or non-exclusive

• Specify the duration and territory of the rights

• Include moral rights waivers, if applicable

🔁 Assignment vs Licensing

• Assignment = permanent transfer of copyright

• License = permission to use the work under defined terms

Unless the contract says otherwise, the creator retains ownership in a licensing deal.

🧑‍💼 Best Practices for Startups and Companies

• Use a standard IP clause in all employment and contractor agreements

• Ensure freelancers sign a copyright assignment agreement

• Keep records of all agreements and versions of work created

• Audit your IP regularly to avoid ownership gaps

🧠 Common Mistakes to Avoid

• Relying on verbal agreements

• Not distinguishing between employees and freelancers

• Assuming payment means ownership

• Failing to define the scope of transferred rights

✅ Conclusion

If you're hiring creative professionals or building IP-heavy products, it's critical to get copyright ownership sorted at the contract stage. A small oversight can lead to significant legal and commercial risk down the line.

At Apar Law, we help businesses and creators draft bulletproof contracts and audit their IP portfolios to ensure full control over their assets.