Copyright Basics and Works Made for Hire
Copyright law protects a work once it is created and placed in a fixed form. The general rule is that the author who created the work owns the copyright. However, there are two primary exceptions to this rule. The first is the circumstance involving an employer and employee. If the employer assigns an employee the task of creating a work during the course of employment, the employer is considered the author and the owner of the copyrighted work. The other situation is more complicated and involves an individual, organization or a firm that hires a freelance worker to create a "work for hire" pursuant to a written agreement.
If it is determined that the work is legally a "work for hire", the employer will own the copyright. The legal definition of a work for hire is (a) a work prepared by an employee within the scope of the employment; or (b) a work ordered or commissioned for use (1) as part of a collective work, (2) as part of a motion picture or other audiovisual work, (3) as a translation, (4) as a supplementary work, (5) as a compilation, (6) as an instructional text, (7) as a test, (8) as answer material for a test, or (9) as an atlas, if the parties agree in writing and execute the agreement with the express intention that the work shall be considered a work made for hire. Assessing whether a work is made for hire can be a difficult task.
Guidance can be found in the Supreme Court case of Community for Creative Non-Violence v. Reid, 490 U.S. 730, 109 S. Ct. 2166, 10 U.S.P.Q.2d 1985 (1989). The first step in the analysis is to determine if the person who prepared the work is an employee or an independent contractor. For copyright purposes, we look to the definition of an "employee" under the general common law of agency. The Supreme Court has assisted with the evaluation by instructing us to focus on three factors:
(1) Does the employer have control over the work being conducted?
(2) Does the employer have control over the employee in regard to the employee's schedule, authority to assign the employee additional work, and authority to hire assistants for the employee? and
(3) Does the employer provide benefits to the employee and withhold tax from the employer's compensation?
If the person who created the work is defined as an employee, then no written agreement is necessary and it is irrelevant as to what kind of work is involved.
However, if the person who prepared the work is not an employee, then a written agreement is required and the work must fall into one of the nine categories set forth in paragraph two of this page. The scope of the categories is unclear and sometimes it is difficult to determine if the work will fit into one of the categories. Often, it will depend on whether there is a narrow or broad interpretation of the respective categories. If the requirements are satisfied, then the party ordering the work or hiring the independent contractor is the copyright owner.
The categories of contributions to a collective work, translations, supplementary works, and compilations need clarification. A collective work is one that consists of multiple contributions. An example of a collective work is a magazine. Translations could include works that will be translated from one language to another language or perhaps it could include computer code being translated from one programming language to another. A supplementary work is a work prepared as a secondary source by one author, to go along with another work prepared by a different author, to introduce, conclude, explain or revise the work. An example is a foreword to a book. Lastly, a compilation is a work consisting of a collection of pre-existing materials that is uniquely arranged or selected to comprise an original work.
Consider this scenario. If an independent contractor creates the work, and it does not fall into one of the nine categories, the hiring party could still own the copyright to the work, if it is assigned to him or her by a written agreement transferring the copyright. If our client is the hiring party, we recommend using language in the Work For Hire Agreement that will alternatively assign the copyrights to the hiring party, if the work doesn't legally qualify as a work for hire. This can be accomplished with simple language that states, "If the copyrightable work legally qualifies as a work for hire, authorship vests with the hiring party. However, should the work fail to qualify as a work for hire, then independent contractor assigns all right, title and interest to the hiring party..."
If you need assistance registering your copyright or preparing a Work For Hire Agreement, kindly contact our office for a courtesy consultation.