- What a copyright assignment actually does
- Only an owner can assign
- The writing requirement: what makes an assignment valid
- Whole or partial: setting the scope of the transfer
- Assigning work that does not exist yet
- What an assignment cannot move: moral rights
- Performers' rights in films and sound recordings
- Tax: how the payment is treated
- Assignment or licence: choosing the right structure
- Where assignments go wrong
- When a lawyer should be involved
- The ownership question to answer before you sign
Copyright assignment is the formal transfer of ownership of copyright from one person or business to another. When it happens, the buyer becomes the owner of the copyright and the seller keeps nothing unless the deal says otherwise. Businesses use it when they buy a creative asset outright, such as a software product, a brand's design catalogue, a music or video library, or the content that powers their website.
In Australia the rules sit in the Copyright Act 1968 (Cth) (the Act). This guide explains how an assignment actually operates: what makes a transfer valid, the choices you can make about its scope, the rights that cannot be assigned no matter what the document says, and the mistakes that most often cost small businesses.
What a copyright assignment actually does
Under s 196 of the Copyright Act 1968 (Cth), copyright is personal property, and it can be transferred by assignment, by will, or by devolution by operation of law. In plain terms, an assignment is a sale or gift of the copyright itself, not just permission to use it. Once it takes effect, the assignee stands in the owner's shoes.
That matters because the Act gives the owner a bundle of exclusive rights. For a literary, dramatic, musical or artistic work, s 31 lists them: to reproduce the work in material form, publish it, perform it in public, communicate it to the public, and make an adaptation of it. If the work is a computer program, or a sound recording of a literary, musical or dramatic work, there is also a right to enter into commercial rental arrangements. An assignee acquires whichever of these rights the assignment covers, can licence them to others, and can sue for infringement as the owner.
The parties involved are usually straightforward. There is the assignor, who currently owns the copyright and gives it up, and the assignee, who receives it. A third person can also matter: the author or performer whose creative effort created the work. As explained below, they may hold rights that sit outside the copyright itself.
Only an owner can assign
A business can only assign copyright it actually owns, so the starting question is who owns the rights. Under s 35 of the Copyright Act, the author of a literary, dramatic, musical or artistic work is the first owner of the copyright. Two exceptions matter to businesses. First, where an employee makes a work under a contract of service or apprenticeship in the course of their employment, the employer owns the copyright, not the employee. Second, where a person commissions a photograph, portrait or engraving for private or domestic purposes, the commissioner owns the copyright in it. The parties can also agree to change these default rules.
The trap for small businesses is the independent contractor. A designer, copywriter, developer or videographer engaged on a contract for services is not an employee, so the default rule gives them the copyright in what they create. Unless the engagement agreement assigns the copyright to you in writing, you may finish up with only the right to use the work, while the creator keeps the right to licence it to your competitors. This is the most common reason a business discovers it does not own its own website, logo or marketing materials.
The writing requirement: what makes an assignment valid
The Copyright Act is strict about form. Under s 196(3), an assignment of copyright, whether total or partial, does not have effect unless it is in writing and signed by or on behalf of the assignor. An email exchange, a handshake, a verbal agreement or an invoice that says "all rights transferred" will not do the job. If the writing is missing, no statutory assignment occurs, and the would-be assignee has at best uncertain rights to fall back on.
The requirement is one-sided in an important way: the assignor must sign, because the assignor is the party giving up rights. The assignee's signature is not needed for validity, though in practice both parties sign.
It is worth knowing that licences work differently. Under s 196(4), a licence granted by the copyright owner binds every successor in title to the owner's interest. So if you hold a licence and the owner later assigns the copyright, your licence continues against the new owner.
Whole or partial: setting the scope of the transfer
An assignment does not have to cover the whole of the copyright. The Act expressly allows partial assignments. Section 16 provides that a reference to a partial assignment means an assignment that is limited in any way, and s 196(2) gives the ways an assignment can be limited:
- Classes of acts: the assignment can cover one or more of the classes of acts the owner has the exclusive right to do, such as reproduction only, or communication to the public only, or a combination. It can also be limited to a class of acts that is not separately specified in the Act but falls within a specified class, which is how a deal can cover a particular medium or method of exploitation.
- Place: the assignment can apply to a place in or part of Australia, and the parties can confine the rights to a particular country or region.
- Duration: the assignment can apply to part of the period for which the copyright is to subsist, so a buyer can take the rights for a defined number of years and the seller keeps the remainder.
Where different people own the copyright in respect of different acts, places or times, s 30 treats each of them as the owner of the copyright for their particular slice. That is useful in practice: a publisher can own the print rights, a film producer the adaptation rights, and the original author the rest, without anyone's interest being invalid.
A typical commercial example: a photographer assigns a corporate client the right to reproduce a set of images in Australia for five years. The client's rights are limited to one class of acts (reproduction), one place (Australia) and part of the copyright term. The photographer keeps the right to display the images in a portfolio, to licence them overseas, and to exploit them after the five years end.
Assigning work that does not exist yet
Businesses often need to assign copyright in work that has not been created at the time of the contract, such as a software product still in development or a content library that will be produced over several years. Section 197 of the Copyright Act deals with this. Where an agreement is made in relation to future copyright, and is signed by or on behalf of the person who would own the copyright when it comes into existence, and that person purports to assign the future copyright, the copyright vests in the assignee by force of the Act when it comes into existence.
In practical terms, a well-drafted development or commissioning agreement can say that the developer assigns to the client all copyright in the work created under the agreement, and the assignment takes effect automatically as each item of work is created, without a separate document for each item. The same section allows a licence of future copyright, which binds successors in title. If the agreement is silent, the default ownership rules apply and the creator keeps the copyright.
What an assignment cannot move: moral rights
Copyright assignment transfers the economic rights, but Australian law also gives creators a separate set of personal rights called moral rights, and those cannot be assigned. Part IX of the Copyright Act gives authors of literary, dramatic, musical and artistic works, and of cinematograph films, the right of attribution of authorship, the right not to have authorship falsely attributed, and the right of integrity of authorship. Performers have corresponding rights in their performances. Under s 195AN and s 195ANB, a moral right is not transmissible by assignment, by will or by devolution by operation of law. The buyer of the copyright does not step into the author's moral rights, and the author does not lose them on sale.
What the buyer can obtain is a consent. It is not an infringement of a moral right to do something that falls within the scope of a written consent given by the author or performer. For authors, the consent provisions are s 195AW, which covers films and works included in films, and s 195AWA, which covers other works. For performers, s 195AXJ provides the equivalent. The consents can be drafted to cover acts occurring before or after the consent is given, and works or performances that have not yet been made or occurred, and they are presumed to extend to the owner's licence holders and successors in title. An employer can obtain a consent from an employee for the benefit of the employer covering all works the employee makes in the course of employment.
The practical point: if you are buying copyright from a creator rather than from an employer, your assignment deed should include the creator's written moral rights consent. Without it, the creator can later object to how the work is attributed or treated, even though they no longer own the copyright.
Performers' rights in films and sound recordings
Where the material being assigned includes a film or sound recording of a live performance, a further layer applies. Part XIA of the Copyright Act protects performers. Under s 248G, a person makes an unauthorised use of a performance if, without the performer's authority and within the protection period, they record the performance or communicate it to the public. The protection period is 20 years so far as it relates to a cinematograph film of the performance, and 50 years so far as it relates to a sound recording.
The Act also provides a shortcut for legitimate users. Under s 113B, if a performer consents to the recording of their performance for a particular purpose, the person is taken to have a licence to use the recording for that purpose in accordance with the terms of the consent. For a business buying a library of music or video content, the practical consequence is that the deal should address the performers whose performances appear in the recordings. A release or consent from each performer, covering the uses the buyer intends, protects against performers later moving to stop the exploitation of their performances. This sits alongside the performers' moral rights consent under s 195AXJ, and both should be checked as part of any acquisition of recorded content.
Tax: how the payment is treated
The tax treatment of a copyright transaction depends on how it is structured, and this is an area where the assignment document matters. If a payment is a royalty, and the recipient is a foreign resident, the payer generally has a withholding obligation. The ATO explains that royalties paid to a foreign resident are subject to a final withholding tax. Whether a particular payment for the assignment of copyright counts as a royalty is not always straightforward, and the ATO has a dedicated ruling, TR 2008/7, on royalty withholding tax and the assignment of copyright.
For an Australian business on either side of the transaction, other taxes can be engaged: GST may apply to the supply of the intellectual property if the assignor is registered for GST and the supply is taxable, and the assignor may have income tax or capital gains consequences on the disposal of the copyright. The precise treatment should be checked with a tax adviser as part of structuring the deal, rather than assumed from a template.
Assignment or licence: choosing the right structure
It is worth being clear about the difference between assigning copyright and licensing it, because the two are frequently confused:
- Licence: the owner keeps the copyright and gives someone permission to use the work, usually for a defined purpose, territory and period. The owner can licence the same work to multiple parties, subject to any exclusivity promised. An exclusive licence is a particular creature: under s 119, the exclusive licensee has the same rights of action as if the licence had been an assignment, except against the owner of the copyright. So an exclusive licensee can sue infringers, but the owner retains the underlying ownership.
- Assignment: ownership itself transfers. The assignee becomes the owner and can deal with the work as its own, including licensing it to others and enforcing the copyright. The assignor is left with nothing except what the agreement expressly reserves.
Choose a licence when you want to keep the asset and control how it is used. Choose an assignment when the buyer needs to own the rights outright, such as when a business is being sold with its intellectual property, or a publisher needs to own the full rights in a work it will exploit and sub-licence.
Where assignments go wrong
Several mistakes recur in practice:
- No signed writing: The most common. A verbal arrangement or an email confirmation does not satisfy s 196(3), so no assignment occurs no matter what the parties intended.
- Assigning what you do not own: A business that commissioned work from a contractor without an assignment clause has nothing to assign to a buyer of its business. The contractor still owns the copyright.
- Missing moral rights consents: A deed that transfers the copyright but does not deal with the author's moral rights leaves the buyer exposed to the author's ongoing rights.
- Vague scope: A one-line "all rights assigned" clause can create disputes later about whether a new medium or territory was included. The scope should be spelt out by reference to the classes of acts, places and duration the deal covers.
- Assuming copyright is registered: There is no copyright registration system in Australia. Protection is free and automatic when a work is created, and nothing needs to be filed with a government body. Websites that offer to "register" copyright for a fee are not providing an official service. What you can usefully do is keep records that prove when the work was created and who created it, such as drafts, dated files and contracts, because those records are what you rely on if ownership is disputed.
When a lawyer should be involved
A copyright assignment looks simple, but the value at stake and the layers of rights mean it is usually worth having a lawyer review the documents. A practitioner will check that the assignor actually owns the copyright, including tracing rights back through employees and contractors; draft or review the scope of the assignment so it matches the commercial deal; prepare the moral rights consents and performer releases that the assignment on its own cannot transfer; and flag the tax issues, including withholding and GST, before the deal is signed. On the buying side, a lawyer will also check that no prior licences or conflicting deals will bind the copyright after it changes hands.
For most small businesses the cost of a review is small compared with the cost of discovering, after paying for the work, that you do not own it, or that a creator can still object to how their work is used.
The ownership question to answer before you sign
The strongest signal in this area is that copyright transfers only by signed writing, and only if the assignor actually owns the rights. Before you pay for creative work, or before you sell a business that owns creative work, the question to answer is whether the paperwork assigns the copyright in writing, from someone who owns it, with the consents that the law will not let the assignment carry on its own. If you can answer yes to all three, the transfer will hold up. If you cannot, that is the moment to get a lawyer involved, because the gap is much cheaper to fix before the deal than after a dispute starts.