Company ownership of contractor work in Hong Kong

Company Ownership of Contractor Work in Hong Kong

In Hong Kong, the creator owns the copyright, not the company that commissions the work. A company does not automatically own the intellectual property created by an independent contractor. Company ownership of contractor work must be transferred through a written agreement containing an express assignment clause.

This rule covers copyright, patents, and registered designs. Without a written assignment, the contractor retains ownership even if the company commissioned and paid for the work.

Contractor Copyright Ownership Hong Kong

The Copyright Ordinance (Cap. 528) states that copyright in a literary, dramatic, musical or artistic work belongs to the author - the person who created it. For commissioned work, the contractor is the author and therefore the first owner of the copyright.

Employees are the exception. Copyright in a work created by an employee in the course of employment belongs to the employer, unless the employment contract states otherwise. An independent contractor is not an employee, so this exception does not apply.

The same principle applies to patents under the Patents Ordinance (Cap. 514) and registered designs under the Registered Designs Ordinance (Cap. 522). The inventor or designer owns the rights unless a written agreement transfers them.

Who Owns Contractor Work

The contractor owns the work they create unless ownership is assigned to the company in writing. This includes software code and databases, written content, reports and manuals, graphic designs, photographs and videos, inventions and product designs, and brand materials and marketing collateral.

If the company later wants to use, modify or sell the work, it needs the contractor's permission. Without ownership, the company may only have an implied licence to use the work for the original purpose, which is uncertain and difficult to enforce.

IP Ownership Contractor Agreement

A written agreement between the company and the contractor should include a clear statement that all intellectual property rights in the works created are assigned to the company, a description of the works covered, the contractor's agreement to execute any further documents needed to perfect the assignment, and a warranty that the work is original and does not infringe third-party rights.

The assignment must be in writing and signed by the contractor. An oral agreement is not sufficient to transfer legal ownership.

For patents, the assignment should be in writing and signed by both parties. The company should also ensure the contractor agrees to assist with patent applications.

What the Agreement Must Cover

The contract should address copyright through an express assignment of all copyright in the commissioned works, moral rights by addressing the contractor's right to be identified as author, which can be waived in writing, future works with a clause covering works created during the engagement, not just those delivered at the end, and third-party materials by outlining the contractor's obligation to obtain licences for any third-party content included in the work.

Practical Steps

Before engaging a contractor, the company should use a written contract that includes an intellectual property assignment clause, ensure the clause covers all types of IP the contractor may create, have the contractor sign the agreement before work begins, and keep the signed agreement with the company's records.

If the company has already received work without a written assignment, it should obtain a retrospective assignment from the contractor as soon as possible. Without it, the company cannot prove ownership and may not be able to enforce its rights against third parties.