The Rule on ‘Copyright Ownership’ for Commissioned Works

I. Introduction

This memorandum exhaustively examines the rule on copyright ownership for commissioned works under Philippine mercantile law, specifically the Intellectual Property Code of the Philippines (Republic Act No. 8293, as amended). The central legal issue is determining who-the author or the commissioning party-acquires the initial copyright over a work created pursuant to a commission or order. This analysis is critical for artists, writers, software developers, advertising agencies, clients, and legal practitioners engaged in creative industries. The discussion will cover statutory provisions, jurisprudential interpretations, the distinction from a work made in the course of employment, and comparative perspectives.

II. Statement of the Issue

The primary issue is: Under Philippine law, who is deemed the original owner of the copyright in a commissioned work created independently and not in the course of employer-employee relations?

III. Brief Answer

Under the prevailing Intellectual Property Code, the author of a commissioned work is, as a general rule, the initial owner of the copyright. The act of commissioning alone does not transfer copyright ownership to the commissioning party. Ownership may be transferred to the commissioning party only through a written assignment or waiver of rights executed by the author. This stands in contrast to the default rule for a work made in the course of employment, where the employer is the original owner, absent any contrary agreement.

IV. Applicable Laws and Doctrines

Section 178.3: Defines audiovisual works and collective works*.
Section 178.5: Defines a work of the Government*.
Section 178.6: Defines a work made in the course of employment*.
Section 180: Governs ownership of copyright. Crucially, it states that in the case of a work made in the course of employment, the employer owns the work, “absent any written agreement to the contrary.” This section is silent on commissioned works*.
Section 181: Governs copyright ownership in audiovisual works*.
Section 185: Governs ownership of copyright in collective works*.
Section 200: Governs the assignment and waiver of copyright*, requiring such transfers to be in writing.

Articles 1305, 1306, and 1315: Governing principles on contracts, including freedom to stipulate and the relativity of contracts*.
Articles 1709-1720: Provisions on contract for a piece of work (contrato de obra*).

The Supreme Court has consistently upheld the author as the primordial owner of copyright*, with statutory exceptions being strictly construed.

V. Application and Analysis

The Intellectual Property Code does not contain a specific provision that automatically vests copyright ownership of a commissioned work in the commissioning party. The default rule, derived from Section 180, is that copyright initially vests in the author, defined as the natural person who created the work.

The critical distinction lies between a commissioned work and a work made in the course of employment. Section 178.6 defines the latter as “a work prepared by an employee within the scope of his or her employment.” For such works, Section 180 creates a statutory default: ownership belongs to the employer. This is a specific exception to the author-as-owner rule.

A commissioned work, however, typically arises from a contract for a piece of work (contrato de obra) under the Civil Code. Here, the creator (e.g., a freelance artist, independent software contractor, or writer) is not an employee but an independent contractor. The commissioning party pays for the completion and delivery of the work, but the copyright does not automatically follow. The copyright remains with the creator-author unless expressly transferred.

The transfer mechanism is provided in Section 200 of the Intellectual Property Code: “Copyright may be assigned or transferred in whole or in part.” Furthermore, it mandates that “the assignment must be in writing signed by the copyright owner or his duly authorized agent.” Therefore, for a commissioning party to own the copyright, a written assignment document is necessary. Mere payment for the work is considered compensation for the service and the physical embodiment of the work, not necessarily for the transfer of the copyright itself.

Sections 181 and 185 provide specialized rules for certain types of commissioned works:
For audiovisual works (Section 181), the producer, director, scriptwriter, and composer are considered co-authors, but the producer is given the exercise of the copyright* (e.g., rights of reproduction, distribution, exhibition), subject to contrary agreements and the separate rights of contributors.
For collective works (Section 185), such as encyclopedias or anthologies, the copyright in the collective work as a whole vests in the publisher/compiler, but this does not affect the copyright* in the individual contributions unless expressly transferred.

In all cases, the principle of freedom of contract under the Civil Code allows parties to define their ownership rights. A well-drafted commissioning agreement should explicitly state whether the author retains the copyright and grants only a license to the client, or if a full assignment of copyright is part of the consideration.

VI. Countervailing Arguments and Limitations

A commissioning party may argue that the substantial consideration paid implies an intention to acquire all rights, including copyright. However, this equitable argument is weak against the statutory requirement of a written assignment. The law favors certainty in the transfer of copyright.

Another potential area of dispute is the characterization of the relationship. A commissioning party may attempt to frame the engagement as an employer-employee relationship to invoke Section 180’s default rule. This would require proving the elements of an employment relationship (selection, payment of wages, power of dismissal, control over means and methods). For true independent contractors, this will fail.

The primary limitation of this analysis is that it addresses only economic rights. Moral rights under Section 193 of the Intellectual Property Code (e.g., right of attribution, right to object to distortion) are generally inalienable and remain with the author, even after an assignment of economic rights.

VII. Comparative Analysis (Philippines vs. United States)

The Philippine rule on commissioned works differs significantly from the approach under United States copyright law, particularly regarding the work made for hire doctrine.

VIII. Recommendations

* The work being commissioned.
That upon creation and payment, the author hereby assigns all economic copyrights* to the commissioning party.
The author waives (to the extent waivable) moral rights* regarding certain uses.
* For works potentially falling under US law, specific “work made for hire” language should be used if applicable.

IX. Conclusion

Philippine copyright law firmly establishes the independent creator as the default owner of rights in a commissioned work. The statutory framework provides no automatic transfer of copyright to the commissioning party, distinguishing it sharply from the rule for employees and from the more commissioner-friendly work made for hire doctrine in the United States. The paramount importance of a written instrument to effectuate any transfer of copyright cannot be overstated. All parties engaged in commissioning creative work must proactively define their rights through clear, written contracts to avoid costly disputes.

X. Bibliography