Legal Question in Intellectual Property in California

I am a freelance graphic designer who is being asked to supply native design files in addition to the finished, static artwork. The request is not uncommon but in this case the client's bill for the work in question is only half paid and 7 months past due.

No formal contract was in place for development of the client's brochure. Nothing to discuss payment terms or copyright issues or native vs. static (pdf) files. The client already has the static artwork in their possesion and has been utilizing it to promote their business as was the original intention. They claim financial distress on a personal and professional level and will make no commitment to paying their bill within any fixed time frame. Their only feedback is, "You'll get paid." Now they wish to modify the text of their brochure, claiming the improvements will lead to more business for them and, as they intimate, quicker payment for me. Feels a bit like a shakedown.

So my questions are these...

What are my obligations legally and ethically?

Does copyright law differentiate between native files and the static end-product, and does it codify the designers' exclusive rights to those files when no special agreement is in place to supercede it?

Is it legal for my client to be using the static artwork despite their non-payment? Funny how it's stealing when you take something without paying for it but it's just "bad debt" when someone says they'll pay you and then doesn't.

I'd really like to tell this client to pay their bill or take a hike, but the truth is I don't know to what degree the law supports this.

Thank you for your help.

Nicole S.


Asked on 2/08/13, 6:22 am

1 Answer from Attorneys
Charles Perry Law Offices of Charles R. Perry

Nicole:

I'm not sure what you mean by "ethically" as opposed to "legally." As a result, I'm going to stick to the "legal" side of things.

Copyright law does not turn on the difference between native and static files. It turns in part on whether you are an "employee" or whether you are an independent contractor, among other things. If you are indeed a contractor, then it turns on (a) the type of project and (b) whether there is anything in writing.

You may have a good argument that you still own the copyright to your work, but there aren't enough facts here to be sure. I also cannot tell you whether your client can properly use the artwork, because I can't tell for sure who owns the copyright, and I don't know what kind of implicit license there might be.

The other issue lurking here is the "bad debt" vs. "stealing" issue you allude to. The key difference is the client's mindset. If the client entered the contract knowing he would not pay, then there is fraud; if he intended to pay at the time of the contract, then that's simply a breach of contract. This issue, however, is independent of the copyright issue above.

I invite you to speak with an attorney in more detail, both in terms of this specific client and in terms of your work in general, so that you understand your rights and are more fully protected. You may also wish to get a standard contract that spells out each party's rights and obligations.

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Answered on 2/08/13, 6:46 am


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