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Your sole trader guide to copyright

By On Your Terms for Hnry - On Your Terms makes business legals easy for Kiwi SMEs. Safeguard your business for less, with its online legal documents and tools. All drafted by experienced NZ lawyers, and customised for your NZ business.

Introduction

Your clients come to you for you – your knowledge, experience, and skill. If others could copy what you produce, its value would decrease substantially. So, whether you’re a creative, designer, coach, writer, consultant, course creator or other freelancer providing advice or content to clients, protecting your copyright in your content is key to maintaining your competitive advantage.

In this guide to copyright, we’ll explain what copyright protection is, how to stop others copying your work, and why protecting your rights can help you make more money.

Let’s say you create a logo, write copy for a website, design a dress, compose music, or write computer code. If what you produce is original (i.e., not copied from someone else) there’s likely to be copyright in it.

This isn’t the case if what you design or produce isn’t original. For example, let’s say you design a plain red dress – you won’t have any copyright in the designs. But, if you design a dress with highly original fabric, colours, contours, and dimensions, that are not dictated by function, you’re likely to have an exclusive right to the design (aka copyright).

To have copyright protection, your work also needs to have been created using your skill, labour or judgement. But this isn’t a hard test to satisfy – the creator must just have made some ‘free and creative’ choices.

In New Zealand, there’s no list of all original things created by anyone ever with their name alongside as the copyright owner. Instead, copyright automatically arises in original work once it’s created. So, when you take the photo, or create the logo, bam – copyright kicks in. You don’t need to register your right. This isn’t the same in all countries – for example in the US, there is a copyright register.

Copyright protection

If you exclusively own the legal right to use/display/sell your work (copyright), no-one else can use/display/sell it without your permission. So, if the value of your stuff is in its originality, preventing others from copying it is key to being able to charge higher prices. Having ownership rights in your content/designs/creations also enables you to grant others the right to use/display/sell them for a fee (aka a licence).

So how do you know if something is a copy?

There’s no hard and fast rule to determine whether something is a copy. You may have heard that if you change 30% of something it’s different ‘enough’ to not infringe copyright – but this isn’t true. Instead, the test for whether something’s a copy is:

  • the copy looks ‘objectively’ similar to the original work
  • the creator used the original as a source, and
  • the copy uses a ‘substantial part’ of the copyright work – for this one, it’s about quality not quantity – eg, copying the most impressive part of a logo, even if it’s only a small part.

So, if someone designs a logo that is clearly similar to the original, the designer had access to the original, and they’ve copied the most impressive feature, this is likely to be copyright infringement.

But as you can see, determining whether something is a copy will be partly based on opinion, and there might not always be a clear answer.

One area where you need to be especially careful as a creator is with incorporating stock icons or graphics into logos. It’s crucial to make sure you have proper permissions from the owner of the stock icon or graphics for it to be used in the way you intend (such as for commercial purposes). Make sure you check the T&Cs of the stock library carefully.

As the creator, you’re the default owner of your work. However, there are two key exceptions to this rule:

  • if you create the work in the course of employment, the employer is the owner
  • the ‘commissioning rule’ – which says if you’re paid to create something (like a drawing, logo or photo) the client typically owns the copyright in the creation.

However, you can also ‘override’ the commissioning rule in an agreement. So, if you’ve agreed with your client that you continue to own the copyright in your work (so you can use it again on other projects) and you’re just providing the client a licence to use it, you need to clearly state this in your T&Cs. Even if you are creating work for someone else to own the copyright to (e.g., a website design) you may need to retain certain rights to use the design (e.g., for your portfolio or marketing materials). You should also be clear that copyright ownership only transfers once the work is fully paid for.

Whatever deal you make with your clients, it’s critical you’re clear about who owns what rights in your T&Cs.

Copyright and work theft

How do you (practically) stop others copying your work?

In addition to clearly spelling out use and ownership rights in your T&Cs, adding the © symbol when you publish your work shows people you claim copyright in your work, and hopefully deters them from copying it (and if they do, means they can’t argue they are an ‘innocent infringer’). The © symbol should be used together with the year of creation and the name of the owner, e.g., © 2024, On Your Terms.

If you discover your copyright in a work has been infringed, you can take legal action, but before this it’s always worth contacting the infringing party yourself (or the ISP), as often there’s been a misunderstanding/lack of awareness of your copyright, and you can fix things with a conversation.

Key Points

If your know-how is your bread and butter, keep yourself in carbs by making sure no-one can copy the output of your smarts. Whatever split of ownership/use rights you agree with your clients, this needs to be clearly spelt out in your T&Cs so that the compensation you receive fairly reflects the value you’re providing.

On Your Terms offers a Creative Services Agreement and Bundle, Consultancy Services Agreement and Bundle and Coaching and Online Courses Terms of Use and Bundle that clearly establish copyright ownership and use rights for your original materials. Or, if you’re at the early stage of a collaboration – access our Confidentiality Agreements and Term Sheet for free to protect those rights up front.

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Whether you’re just starting out, or an industry veteran, Hnry is designed for all sole traders. We make sure that you never know the horror of an unpaid tax bill – ever. And that’s a big deal, believe us.

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DISCLAIMER: The information on our website is for general educational purposes only. It doesn't cover all situations and circumstances, and shouldn't be taken as direct tax advice. If you're looking for specific help with your taxes, join Hnry and our team of experts can provide you with assistance tailored to your business needs.

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