"If you are "Contracted by Payment of a Fee" the Person who pays the fee is the "Owner" of the Item Contracted For."
This is no different than someone that is contracted to write the music for a company producing a movie, the writer unless his contract so states has no rights to the music he produces while under payment by their employer.
If however, you charge a "Set-up Fee" this is something that has nothing to do with artwork. If they bring artwork, then they are entitled to the return of the "Original Supplied Artwork" they are not getting the Digitized Work. You can always give them the work in an off the wall file also if you are so inclined, who knows maybe the other embroiderer can convert it.
Honestly though, if your customer wants the artwork and you charged them a fee for doing the artwork then by law they have a right to a copy of it if that is what you charged them for. Personally, if I do a great piece of work for a logo, I do not charge an Artwork Fee or digitizing fee, I will charge a fixed set up fee. If they want the artwork they will be charged a fair rate for Graphics Art Work at a per hour rate and will be given the artwork in an .ai or a .cdr file depending upon the Art/Draw program used in the creation of the work, most will not pay the average hourly rate of $150 to $250 for the principal artist nor will they pay the $50 - $100 for studio staff. Most will have an average of 4 hours minimum charged. If they do want to pay then I'll definately allow them the artwork based on 4 hours minimum at my fee of $225 an hour as principal.
Really, its in how you word it and apply it and WHO the Customer is!
