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November 2008 |
Web Site Woes Modern technology is all around us and, like most businesses, nonprofits are spending a lot of time and money in building effective Web sites. A good Web site allows a nonprofit to establish its presence, build and maintain a constituency, provide information, raise funds and generally advance its mission. For most nonprofits, the construction and maintenance of a Web site will require hiring an outside consultant to provide these services. Any time the organization retains a consultant, even a consultant who is a volunteer providing services for free, it is important to agree in writing who will own the copyright in the work product that is developed. Many organizations, nonprofit and for-profit alike, overlook this task. The failure to do so can have dramatic ramifications. Copyright law generally provides that ownership of a copyright initially belongs to the author. For example, the author of a book owns the copyright to the book. Similarly, the third party developer of a Web site will own the copyright in the design of that Web site unless there is a written agreement assigning ownership to the nonprofit. Ownership of the copyright to a Web site's design is important because the owner generally controls how the site can be used. For example:
Many organizations mistakenly think they own the rights in their developed Web site because they paid for it as a "work for hire." The "work made for hire" doctrine would generally give an employer ownership of work product developed by an employee within the scope of his or her duties. However, it does not apply to works, including Web sites, developed by third parties. Therefore, it is important that you enter into a written agreement with any third party hired to provide development services. In many cases, a consultant will provide a form agreement that addresses basic issues such as the scope of the services and the manner in which fees will be charged. You should examine this agreement to make sure it specifies who will be the owner of the copyright. If the copyright is retained by the consultant, then you should, at the very least, make sure that the agreement grants your organization an appropriate license to use and modify the Web site to fit your needs. On the other hand, if the agreement is silent on the issue of copyright ownership, then you should make sure that the copyright is assigned to your organization. In the absence of any explicit license, the law will normally provide that the charity is entitled only to an implied license to use the Web site design. An implied license, however, can be risky because the scope of the implied license (re-use, for what purpose, ability to modify, etc.) is usually unclear and must be determined from the parties' intent and conduct. The problem with this is that a consultant might try to argue that the implied license is not exclusive and that the consultant can reuse the 'code' or other materials developed for you. If this should happen, then you might soon find lots of other charities with Web sites that look just like yours. Equally as dangerous, the consultant might argue that the implied license only grants you the right to use the Web site as-is and does not permit you to update or modify it going forward. Intellectual property laws are complex and should be carefully considered whenever a consultant or other third party is used to build or maintain a Web site. Although many of the provisions of the relationship may appear straightforward, many are not. This is yet another important example of why operating a nonprofit can be a tricky business. The laws impacting nonprofit organizations (including family foundations) are complicated. If you are involved with a nonprofit or are thinking of becoming involved with one, make sure you seek experienced skilled professionals to work with you and your organization. The consequences of missteps in administering the organization can extend far beyond the organization. RECENT PUBLICATIONS
ABOUT SCHIFF HARDIN LLP Schiff Hardin LLP is enthusiastically committed to serving the legal needs of tax-exempt organizations, matched by significant experience and practice capabilities in this area. Our attorneys provide comprehensive counsel to a wide array of public and private philanthropic, health care, medical and scientific research, housing, neighborhood redevelopment, cultural, artistic, civic, college and educational, and religious organizations, as well as social welfare organizations, trade associations and business leagues, business and housing cooperatives, and professional fundraisers. For more information about the services Schiff Hardin LLP provides to tax-exempt organizations, please feel free to contact us.  |
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