If you commission something do you own copyright?

Credits: Vitaly Gariev (Unsplash)

The Answer Might Surprise You

The Law in One Minute

If you’re a business owner, here’s the short version:

Employees: If a genuine employee creates copyright material as part of their job, the employer will generally own the copyright under s 35(6) of the Copyright Act 1968 (Cth), unless the parties have agreed otherwise.
Contractors and freelancers: Paying an invoice does not usually transfer copyright ownership. Unless there’s a written agreement saying otherwise, the contractor will often remain the copyright owner.
Want to own the copyright? Don’t assume you do. If ownership is important, it should usually be dealt with in writing before the work starts.
Need to use the work but not necessarily own it? A carefully drafted licence may be all that’s required.

The lesson is simple: creating something, paying for something and owning the copyright are three very different legal concepts under Australian law.

You’ve paid for the work.

The invoice has been settled. The logo is on your website, the photographs are in your marketing brochure, the software is helping run your business, and the website copy is live.

So you own it… right?

Not necessarily.

One of the biggest misconceptions in Australian business is that paying someone to create something automatically means you own the copyright. It sounds logical, but Australian copyright law often says otherwise.

In many cases, the answer depends on one surprisingly simple question:

Was the work created by an employee or by an independent contractor?

It is a distinction that catches out businesses of every size. We’ve seen disputes arise years after a project has finished, often when a business is sold, a relationship breaks down or someone wants to reuse or commercialise creative work they assumed they owned.

Employees vs Contractors: Why It Makes a Big Difference

Australian copyright law draws a clear distinction between employees and independent contractors.

Under s 35(6) of the Copyright Act 1968 (Cth), where an employee creates copyright material in the course of their employment, the employer will generally own the copyright unless there is an agreement to the contrary.

That doesn’t mean every person working in your business is automatically an employee. The legal relationship matters far more than the title on a business card.

As the High Court explained in Hollis v Vabu Pty Ltd (2001) 207 CLR 21, courts look at the “totality of the relationship” rather than simply accepting the label the parties have chosen. Calling someone a contractor—or an employee—doesn’t necessarily make them one.

For genuine employees, however, the position is usually much more straightforward. If creating the work forms part of their employment duties, the employer will generally own the copyright from the outset.

The position is often very different for contractors and freelancers.

If you engage a freelance graphic designer, photographer, software developer, copywriter, videographer or consultant, paying their invoice does not necessarily mean you own the copyright in what they create.

Instead, unless there is an agreement dealing with ownership, the contractor will often remain the copyright owner.

That surprises many business owners because they understandably assume that if they’ve paid for something, it belongs to them.

Unfortunately, payment and copyright ownership are two very different legal concepts.

The Grey Area

Some situations are less obvious.

What about directors?

Founders?

Someone who has worked in your office for years but invoices through their own company?

Or an “in-house” designer who has never actually signed an employment agreement?

These relationships can become legally complicated because a job title doesn’t determine copyright ownership. The real nature of the relationship needs to be considered, and sometimes that isn’t as clear as everyone assumed.

Real-Life Situations Where Businesses Get Caught Out

This issue appears in almost every industry.

Imagine you’ve paid a freelance designer to create your company’s logo. Years later you want to modernise it or sell your business. Does your business actually own the logo, or only have permission to use it?

The answer may depend on what was agreed at the beginning.

The same question arises with website copy. A freelance copywriter produces the words on your website. Five years later you decide to publish a book, launch a new business or licence the content overseas. Can you do that without asking the original writer?

Product photography creates similar issues. A professional photographer takes beautiful images for your catalogue. Can you keep using those photographs forever? Can you edit them? Can another business use similar images?

Software development is another common example. An external developer builds a custom app or business system. If they walk away halfway through updates, who owns the source code? Can another developer continue working on it?

Consultants who prepare reports, training manuals, online courses or educational resources can also create valuable copyright material. Unless ownership has been dealt with properly, businesses sometimes discover they have fewer rights than they expected.

Copyright Rewards Creativity—Not Simply Payment

Australian courts have consistently explained that copyright protects the author’s own intellectual effort rather than the fact that someone paid for the work.

In the landmark High Court decision of IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458, the Court confirmed that copyright protects an author’s “independent intellectual effort” rather than simply labour or expense.

Similarly, in S W Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466, the High Court made it clear that originality doesn’t require something to be completely new or inventive. Instead, the work must originate from the author through the exercise of their own skill and judgment.

Those cases weren’t about employees and contractors specifically, but they illustrate an important principle: copyright begins with the creator unless the law or a valid agreement says otherwise.

How Can Ownership Be Changed?

Fortunately, the default legal position isn’t always the final one.

Businesses can usually change who owns copyright by agreement.

One option is a copyright assignment.

An assignment transfers ownership from the creator to someone else. If your business wants to own the copyright outright, this is often the most reliable approach.

Importantly, s 196(3) of the Copyright Act provides that an assignment of copyright is only effective if it is in writing and signed by or on behalf of the copyright owner.

That’s an easy provision to overlook, but it is incredibly important.

It means that relying on a verbal conversation, an informal understanding or an exchange of emails may not always achieve what the parties intended.

Another option is a licence.

Rather than transferring ownership, a licence allows the creator to keep the copyright while giving the business permission to use the work in agreed ways.

Sometimes that’s all the parties actually need.

Whether an assignment or a licence is more appropriate will depend on the project, the commercial relationship and the parties’ expectations.

What is clear, however, is that these discussions are usually much easier before work begins than after everyone has been paid.

If You’re the Contractor, Don’t Assume You Have to Give Everything Away

This issue isn’t only important for businesses hiring creatives.

It’s equally relevant for freelancers, consultants and contractors.

Many are surprised to discover that they may already own valuable intellectual property unless they have agreed to transfer it.

That doesn’t necessarily mean every client should receive only a licence. Sometimes a full assignment makes perfect commercial sense.

In other situations, however, retaining ownership while granting carefully drafted rights to use the work may be a much better business model.

The important thing is understanding your options before signing the agreement rather than discovering them afterwards.

A Quick Copyright Health Check

Before your next project, ask yourself a few simple questions.

Do your contractor agreements clearly deal with copyright ownership?

Do your employment contracts address intellectual property created during employment?

Have those agreements actually been signed?

If a key team member left tomorrow, would you be confident your business owns everything it needs to continue operating?

If you’re unsure of the answer to any of those questions, it may be worth reviewing your agreements before a problem arises.

Frequently Asked Questions

Does paying an invoice transfer copyright?
Usually not. Paying for creative work and owning the copyright are different legal concepts under Australian law.

Is a director automatically an employee?
No. Whether someone is legally an employee depends on the true nature of the relationship, not simply the title they hold.

Can I use a logo, photograph or article if nothing was signed?
Possibly—but it depends on the circumstances and any rights that may have been granted. The answer isn’t always straightforward.

What’s the difference between a licence and an assignment?
Generally speaking, an assignment transfers ownership of copyright, while a licence allows someone to use copyright without becoming the owner.

Don’t Leave Copyright Ownership to Chance

For many businesses, copyright is one of their most valuable assets. Yet ownership is often assumed rather than properly documented.

A well-drafted agreement prepared at the start of a project can help avoid misunderstandings, protect valuable intellectual property and reduce the risk of costly disputes later.

If you’re engaging employees, freelancers or contractors—or you’re the one creating valuable work for clients—it’s worth making sure your agreements accurately reflect what everyone intends.

After all, it’s far easier to agree who owns the copyright before the work begins than after it has become valuable.

Who Owns Copyright: Your Employee or Your Contractor?