Authored By: James A. Blomquist Attorney View Biography

Do you need a written contract? A story on the front page of the April 9, 2008 Wall Street Journal pointed out the embarrassing problem Wal-Mart faces with a video production company selling video clips from its archive of 30 years of corporate events. Wal-Mart had hired the company, Flagler Productions, Inc., on a “handshake basis” in the 1970s. After more than 25 years of work the Flagler company’s services were terminated abruptly. The company then began selling access to its video library of various Wal-Mart corporate activities.

The WSJ story quotes a Wal-Mart executive saying: “It’s difficult to understand how the company [Flagler] could now sell to third parties the material we paid it to produce on our behalf”. But it seems equally hard to understand how Wal-Mart could be so careless in relying on a verbal contract and ignoring copyright issues.

The key to the above story is hiring the videographer on a “handshake basis”. Copyright law gives the author of a copyrightable work the exclusive right to make and distribute copies, create derivative works and display the work. When hiring a contractor to produce copyrightable work for your company it is essential that you have a written contract. The contract should specify that the contractor is creating a “work-for-hire”, and clearly provide for the contractor to assign copyright in the work to the hiring company.

If you have any questions, please contact Jim Blomquist at (612) 373-8559 or jblomquist@felhaber.com.