What Every Business Needs to Know About Contracting Work


The way the world conducts business has changed ever since the Internet permitted contractors and freelance workers to accept projects outsourced by companies. Actually, in the United States of America, approximately 53 million workers do freelance jobs, and predictions include massive increases in their numbers by 2020, which would likely overtake the figures of employees with full-time occupations.

On the surface level, outsourcing is extremely beneficial for a company because great demands from clients can be taken without necessarily hiring new hands, thereby saving time and effort. In view of today’s ever-evolving generation, the entire workforce just tries to stay abreast with various developments available nowadays for growth.

Although outsourcing work is attractive with all its associated benefits, having no knowledge or caution in outsourcing could also cause a business a heap of trouble with regard to intellectual property (IP) rights and copyright issues.

Here are few of the fundamental issues on IP in the Philippines, which can guide companies with the proper treading.

  • Copyright and IP Ownership

Although companies have possession or control on a freelancer’s written article or artwork, copyright law states that, legally, ownership is still under his/her name. Publishing, using, or altering these works, even with the appropriate and corresponding payments, may cause trouble.

  • Process of Transferring Copyright

For a company to manage a piece of work as they please, a company representative must accomplish a copyright transfer that gives the  IP rights (in part or in whole) to the outsourcing company—according to the agreed upon terms. This is the only way to legally transfer the ownership of a work of a freelancer to an enterprise.

  • Work-For-Hire Agreement

With a work-for-hire written agreement, the hiring party acquires the copyright or the property rights of a freelancer’s work, for which he/she was commissioned instantly to the employer. This particular step, once accomplished, allows the company to manage the freelancer’s work, while still considering a set of limitations in the agreement.

For instance, if a freelancer writes an article, he’s acknowledged as both the author and the original copyright holder. However, with this agreement, the actual owner then becomes the end party, which could either be a company or an organization. Furthermore, the work-for-hire agreement only applies when specific tasks were conducted during the freelancer’s hiring period, that is, the time when he rendered services to his employer.

  • Limitations on Publications

Just because you commissioned a piece of creative work from an individual doesn’t mean you can publish it right away. When purchasing a logo or an article from a freelancer, remember to obtain copyright and ownership rights of the work before publishing it in whatever avenue, along with taking into account the industry involved in the undertaking.

Without proper permission, a freelancer can legally pursue a copyright infringement lawsuit. Doing so without proper permission can also be considered as an IP theft, which can cost companies huge amount of expenses.

  • Identifying with Freelancers

The best practice for everyone involved the business is to be clear about the copyright and IP ownership, particularly between the outsourcer and freelancer from the get-go. The transfer of copyright and IP ownership must be set in stone before allowing any work to begin to prevent the occurrence of serious repercussions.

The policies must be clear, and the importance of these policies should not be overlooked, as it could quickly land a company in hot water. Additionally, the policies should be in writing so that when disputes arise from either party, a clear document exists to back up whatever claims.

For companies working with freelancers, always be careful with the labor you receive from outside your organization. Being too lax and not having due diligence over the ownership of IP rights could lead to accidental IP theft, resulting in the negation of the benefits of hiring freelancers, and possibly costing even more.

All these probable disputes may occur upon completion of tasks, and arguments would arise from freelancers—especially when they wish to have their works back or for the continuance of using them.

Essentially, setting limitations, rules, and clarifying all things related to transferring copyright ownership are vital to have a smooth business transaction throughout a freelancer’s course of the employment. Doing so would benefit not only the freelancers but also the company and everyone involved, since money is still included in the entirety of this undertaking.

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