Intellectual Property Law: Pitfalls and Avenues for the Non-Profit Sector
by Alfred C. Frawley, Esq.
Preti Flaherty
Intellectual property is an area of legal landscape that can present pitfalls
for any business, especially non-profit organizations.Driven by their commitment
to their mission, many non-profits mistakenly believe that their good works
don’t place them in the business arena. Board members and executive officers are
oftentimes overwhelmed with work and their commitment to the mission causes them
to undervalue the need to pay attention to some important legal issues regarding
intellectual property that exist in the business world.
IP includes trademarks, patents, and copyrights. IP laws are designed to
prevent the hijacking or misuse of recognizable trade names, such as the
American Red Cross, along with trade symbols and logos (the recognizable bold
red cross) and can give you help in protecting domain names (www.redcross.org). Even content on training
or internal processes can be licensed and protected. This type of branding is
essential to the marketing and fundraising success of charitable
organizations.
However, most organizations are careful about the initial corporate formation
and seeking of non-profit status from the IRS, but sometimes forget that even as
a non-profit, they are still operating in the “business world” and should
consider the protection of their intellectual property.
A few common legal pitfalls include:
1) Many non-profits have assets that might be worth something to others: the
training material and course material they create in fufilling their mission
statement might be attractive to other non-profit organizations in other
locations or in other fields. Frequently, non-profits are not up to speed on
securing and maintaining copyright protection for those materials simply and
inexpensively, only to have their unique idea snagged by another non-profit.
Others may think they can use the work without payment or attribution, or worse
yet, pass it off as their own. Recently, a client reported that an
organization in Oregon had used one of their educational pieces and adapted it
for their own use. The client was surprised, and comforted to learn that it had
some recourse.
2) Another pitfall is forgetting to clarify ownership of the intellectual
property at the outset of a project. For example, if an employee prepares
materials or a website for the non-profit, who owns the materials? What if
a volunteer or independent consultant produces those materials, even with the
active collaboration of the non-profit’s director, which person owns it?
Non-profits sometimes don’t consider who owns the materials. Begin projects with
a clear understanding at the outset of the relationship. Otherwise, the
volunteer or independent contractor owns the materials and may be able to
restrict your organization’s right to use them.
Preventing these sticky situations begins with education of executive
officers and board members. And, sensitivity to the fact that these legal issues
exist is half the battle. Given the two problem areas discussed above, here are
some practical tips:
- Copyright notice. A non-profit organization may have intellectual
property that may be of value to others. It might even be an untapped resourced
that can be monetized to help support the organization’s work. Training
materials or written guides that the organization works hard to put together can
be licensed or shared with other organizations in other disciplines or
geographic areas. If the organization has such materials, a copyright notice
must appear on the first page (e.g. Copyright 2004 The Foundation
Foundation). The notice isn’t necessary any more under the law, but it’s
still good practice.
- Make sure you own it. Copyright exists in forms of creative
expression (in writing, graphically, or otherwise). Copyright doesn’t protect
ideas, only the expression of ideas. The rules of who owns what
copyright interest can be tricky. Generally, an employer owns the copyright in
creative work produced by an employee during the scope of their employment. But,
if an employee puts in “extra time,” or the person doing the work is a
volunteer, then that rule doesn’t apply. For non-profits, if a volunteer or an
independent contractor generates creative work for the organization, that person
owns the copyright unless you have a written agreement with them that the
organization owns it. It is very important to include this agreement,
which should contain the following language:
Contractor understands that the Company exclusively owns the copyright in the
Work and all rights incident to such ownership, (including all electronic and
derivative rights) in all mediums of expression now existing or devised in the
future, and may utilize those exclusive rights both in the United States and
throughout the world. The Work is a commissioned “work for hire” owned by
Company. If the Work is determined not to be a “work for hire” or such
doctrine is not effective, the Contractor hereby irrevocably assigns, conveys
and otherwise transfers to Company, and its respective successors, licensees,
and assigns, all right, title and interest worldwide in and to the Work and all
proprietary rights therein, including, without limitation, all copyrights,
trademarks, design patents, trade secret rights, moral rights, and all contract
and licensing rights, and all claims and causes of action of respect to any of
the foregoing, whether now known or hereafter to become known. In the
event Contractor has any right in the Work that cannot be assigned, Contractor
agrees to waive enforcement worldwide of such right against Company, its
distributors, and customers, or if necessary, to exclusively license such right
worldwide to Company with the right to sublicense.
A lot of time, money and human capital go into generating
materials that are useful for a non-profit organization. There is
sometimes a feeling that each organization is “reinventing the wheel”. A
lot of people are doing a lot of great things, so the notion that good work
already created could be licensed and put to good work somewhere else, is an
idea which any organization should consider discussing with an attorney,
whether they have done the creating or whether they are seeking to benefit from
someone else’s investment.
Other Resources: There are many resources available on the issue of
intellectual property, such as The Copyright Book, by William S.
Strong or The Copyright Handbook: How to Protect & Use Written
Worksby Stephen Fishman. The Copyright Office has good basic information
(http://www.copyright.gov), as does www.findlaw.com.
Sources: www.charitychannel.comand
www.uspto.gov.
