I am often confronted with business people -- and artists -- who are not fully aware of the implications of using, or creating, copyrighted works.

Copyright arises upon the creation of an artistic, dramatic, literary or musical work.

So, photographs and paintings are protected by copyright, as are plays or television shows, books or poems, and songs.

As a general rule, copyright in a work is owned by the author/creator. The main exception is for copyright works that are made in the course of employment. All such works are owned by the employer who has absolute rights to deal with the work as it wishes.

The troubling area for most people involves work -- a photograph, a computer programme or a business report -- that is contracted for.

The bottom line is this: To own a work created by a contractor, there must be a written assignment of copyright. A verbal contract is not sufficient.

Many contractors will not sell ownership of the work created, but instead will grant the user a licence. The benefit of licensing a copyright work is that the owner still retains control whilst granting the user very limited rights.

Any further use by the user will require an additional payment.

A typical example of this is a professional photographer's license to use a photograph (although not one that has been commissioned) in, for example, a corporate brochure.

Such a license will generally be limited for use in that brochure alone and any other use, say in a marketing campaign, will require further permission and a fee payable.

If drafted correctly the license to use the photograph in the brochure will be limited to the type of reproduction i.e. hard copy or electronic.

Whilst most brochures are still produced in hard-copy format there are signs that this will change due to the Internet, where a number of copies can be easily and almost instantaneously be made.

With hard copies it is easy to know how many copies will be produced, and therefore what price is reasonable. But if you cannot say how many copies may be made a different basis of calculation must be used and a higher price (generally) will be payable.

These issues are similar to those faced by authors of articles used by magazines. Whilst many authors are not in a position to argue with the publishers the terms and conditions of their contracts, for those who can the ability to differentiate between markets can be used to leverage the price. Is the magazine allowed to publish the article more than once? Can it publish it in a sister magazine or a magazine with a different audience? An author of a scientific article on the effects of explosives might be concerned to find that the publisher has sub-licensed the article to 'Soldier of Fortune' magazine.

Can the article be published in the Internet version of the magazine? Many publishers have quickly realised that their industry sector is better placed than most to take advantage of the business opportunities that the Internet offers. As a result some authors have found that the publishers of their articles have included such articles in their databases.

There are now a number of cases where objections are being raised on the grounds that this was a use that was not originally either envisaged or granted by the author. As a business owner, then, you must attempt to identify all the uses that you plan to make of the copyrighted work. If you make a sensible attempt at doing so when obtaining your licence at least you can be said to have properly discharged your duty.

If you do not, you may face two future problems.

One, your rights will not be clear and this could lead to indecision at a later date when you would like to use the work but are not sure whether you are able to.

Any request for clarification sent to an author will inevitably be returned with an offer of a further licence upon payment of another fee.

A second problem may arise if the material is used in a way the author considers to be outside the terms of the licence -- an injunction could be issued against you.

A question of copyright This would be disastrous if it occurred in the middle of a marketing campaign.

Users must also ask whether the rights granted to them will be exclusive, or whether the owner may licence them to others as well. After determining the rights there is then the question of payment, which could be a lump sum or a recurring fee calculated upon the use made by the user of the work, or a combination of both.

Where extensions to the licence are likely to be required, such extensions can be agreed in advance together with a predetermined fee.

This provides the user with a level of comfort concerning possible future business dealings whilst simplifying the whole process for the owner.

The more important the work is, the greater the effort that should be made to ensure the details of the agreement that you are entering into. In doing so both parties can save themselves a great deal of time and effort.

*** Attorney Graham Wood is a member of the Information Technology and Intellectual Property team at Appleby Spurling & Kempe. Copies of Mr. Wood's columns can be obtained on the Appleby Spurling & Kempe web site at www.ask.bm.

*** This column should not be used as a substitute for professional legal advice.

Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.