Intellectual property
The Charity Commission has recently reissued its guidance on trustee duties, “The Essential Trustee”. In this they remind trustees that they must act responsibly and reasonably when managing their charity’s resources. To do this, trustees should ensure that there are policies in place to protect the charity’s assets. Whilst a charity may have done this for tangible assets, such as their buildings, there is one type of intangible asset often neglected by charity trustees. That is intellectual property, and in particular, copyright.
We highlight the issue by a scenario we have seen in various charities:
Over the years a portfolio of literature has been created and badged with the charity’s name. The charity called on volunteers, who had the necessary specialist knowledge, to write the material. Often the material was produced by a number of authors with another volunteer responsible for editing. Another organisation wished to use part of the material and was willing to pay a fee. The charity had two aims to:
- maximise its assets by giving a wider use to its literature in the delivery of its charitable purposes; and
- generate income from this primary purpose trading.
However, the charity hit a barrier which could derail the deal. The other organisation asked for confirmation that the charity owned the copyright because it wanted assurance that its use of the materials would not infringe the intellectual property rights of someone else. Without that confirmation it would not do the deal. Unfortunately the charity was unable to give that confirmation.
Where material is produced by an employee in the course of their employment, copyright in that material automatically belongs to the employer unless the parties have agreed otherwise. However that provision of the Copyright, Designs and Patents Act 1988 does not apply to volunteers. A volunteer who is the author of the material is the first owner of the copyright and where, there is more than one author, there will be joint owners of the copyright. The same would apply to a non-employee who was paid to produce the material.
The trustees had failed to take steps to protect the key materials of the charity. We would recommend that a charity in this situation should carry out its own audit, using external expertise if required, and check that all its key literature and electronic materials are either owned by, or licensed by a third party to, the charity. Where there is a licence, the charity must understand the scope of the permitted use. In addition, to avoid the barrier experienced in this scenario, trustees should initiate a system whereby all volunteer authors sign a standard form of assignment in which they transfer ownership of the copyright in specified materials to the charity which should also cover future copyright they might create in those materials. In some cases, where it was agreed the author could use the material elsewhere, the charity might have to rely on a licence from the author but the charity should seek a licence which is perpetual, free of royalties and wide enough to cover all the charity’s planned uses.
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