Marketing/Graphic design: Does my client own my working files or just the final product they hired me to do?

What does your company's contract with your client say? If you don't have a contract, the issue would be governed by copyright law, which in turn goes back to contract principles. Was all this work your company did for this client created as works for hire for this client, so that they're the owner? The client would need something in writing saying so, and if they haven't got anything like that, then your company is the creator and is the copyright owner of the working files of these graphics.

If the past course of conduct over these 7 years has been to only give the client only the finished product and not the working files, that strengthens the claim that these working files belong to your company.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

I agree with Pamela's answer above. We have frequently handled matters like this, both for the marketing company or designer, and also for the business/purchaser. It all hinges on the agreement. If the agreement states its a work for hire, then they own all the materials. If there is no explicit agreement but if there is a purchase order provided by the client, they may have terms and conditions attached to the purchase order that could apply. You should look to all the communications/correspondence with the client.

I may be wrong, but I'm interpreting what you've written not as "they want the draft designs I went through to get to their final designs" but as "they want the working EPS and PSD files with layers, etc intact so they can easily tweak and modify my designs." Usually, the contract just provides for transfer of the final design and not drafts or the native files, but what actually gets into the contract is limited only by the imagination of the drafter.

In the absence of a contract, reread Ms. Koslyn's answer if they want the drafts. If they want the EPS or PSD files so they can manipulate them, you're likely in a very good position to refuse their request. Of course, you should speak with a lawyer to discuss all your options before engaging your ex-client.

This issue should also make you consult with a lawyer about updating the contract you give your clients to sign. It's always best to address potential problems before they become real problems.

I agree with the first two answers that the terms of any contract between a graphic design company and its client would generally prevail. And that where there is no written contract (so instead the designer has been operating under an unwritten agreement, a contract implied in law or a quasi-contract) then the unmodified principles of copyright law would apply.

Where I would analyze the situation differently from my colleagues, however, is that I consider the term "work made for hire" to be limited by the definition in the federal statute rather than implicitly referring to ANY copyrightable work that's done for a client under an explicit agreement that the client would "own" the results of the work. This is because the Supreme Court in 1989 decided so in the case of Community for Creative Nonviolence v. Reid (see web link to the reported decision). Title 17, sec. 101 of the U.S. Code defines "work made for hire" as:

A “work made for hire” is –

(1) a work prepared by an employee within the scope of his or her employment; or

(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.

[I assume that sound recordings aren't pertinent here, as there were some statutory changes in that respect, concerning whether they were to be included in the definition of the kinds of works within the definition.]

The bottom line is that the Supreme Court said that ONLY the kinds of works enumerated in the definition can be a "work made for hire" under the copyright law.

In the case of Ed Marco v. Accent Publishing, the publisher claimed that it owned images made by my client, a professional media photographer. The publisher asserted that the images were works made for hire because Ed should have been deemed to come within the meaning of "employee" as used in the copyright statute. But Ed wasn't on the payroll of the magazine and actually worked as an independent contractor. The Third Circuit Court of Appeals agreed with our analysis in the decision to be found at the cited link.

DISCLAIMER: Of course, the requester should understand that a lawyer who answers a question on this website isn't forming an attorney-client relationship and isn't providing "legal advice" for use in any specific circumstance. Whenever one is in a situation of conflict, the best practice is to seek legal advice from an attorney of the relevant jurisdiction who is confidentially provided with all pertinent facts.

The starting point for me is to get clarity on what you were hired to do and what it was that you created.

I do not know what "products" means in the context of your question.

If "products" means marketing materials of the type that businesses normally use to promote their companies then those materials contain text, graphics, and photographs -- all three of which are copyrightable INDEPENDENT of the finished work (e.g., the folder, the advertisement, the flyer, the nifty marketing gizmo).

As noted previously, the agreement (which could be oral, written, or created by course of conduct) between you and your client determines who owns the work product you created during the time you were working for the client. It is likely that ownership of the copyright in the text, graphics, and photographs that you created during that time vests with your client under the work for hire doctrine.

Assuming you were obligated to assign to your client the copyright in the works that you created during that time, your client owns not only the finished marketing materials but all of the various logos, graphics, text, and photographs created for use within those materials.

If that's true, and I think it is, then I see no reason why you would hesitate to turn over the "working files" you generated while you worked for the client.

At the end of the day, if you object to the request to turn over your "working files" then you need to hire an intellectual property attorney to evaluate the situation in appropriate detail.