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Work Made for Hire

Introduction

Under the 1976 Copyright Act (as amended), works created and put into some kind of fixed tangible form are protected by copyright law. In other words, the author who creates the work automatically gains a copyright to the created work. The owner of a copyrighted work is generally the author of the work, i.e. the individual or individuals who created the work. However, there is an exception to this general rule know as a "work made for hire" or "work for hire."

If a work is "made for hire" under copyright law, the actual individual or individuals who created the work are not the owners – the employer is the owner. The employer can be an individual, company, or organization of nearly any kind.

A "work made for hire" comes up in 2 situations with (i) employees and (ii) independent contractors. In order for the employer to own the work of an employee or independent contractor, certain requirements must be met. Otherwise, the employer may learn that it does not own the rights to the copyrighted work, which can lead to all kinds of legal problems for the employer.

In this article, we’ll go over how a "work made for hire" can be properly created under copyright law with employees and independent contractors, the differences between employees and independent contractors under copyright law, when it may be better to use a copyright assignment, as well as some other considerations.

Next, we’ll explore the 2 situations in which a work made for hire can arise.

Two Situations Where Work Made for Hire Applies

There are only two situations in which a "work for made for hire" can exist. They are works created:

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

(2) by an independent contractor in 1 of the 9 following situations:

as a part of a motion picture
as a part of 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.

Many questions arise under "works made for hire," including whether an individual meets the definition of an "employee" or "independent contractor," or whether other works besides the 9 listed can ever be considered a "work made for hire" by independent contractors. For example, could an employer and an independent contractor agree that the independent contractor write a novel for the employer as a "work made for hire?" Answer: No. Why? Because a novel does not fall into 1 of the 9 categories listed above. So, how could an employer own the copyright of a novel created by an independent contractor? We’ll discuss this in the following sections.

Next, we’ll go over how a work is made for hire by an employee for his or her employer.

Work Made for Hire by Employee

So, who is considered to be an "employee" for purposes of copyright law? This probably seems like a pretty straightforward question. We all know (or at least think we know) the definition of an employee, right? Well, it turns out that this question went all the way to the United States Supreme Court in the case Community for Creative Non-Violence v. Reid, 490 U.S. 730, (1989). This is because it’s not always clear as to who is an "employee" for purposes of copyright law.

In short, the key to whether an individual is an employee or not rests in how much control an employer has over an individual. The more control that the employer has over the individual the more likely that the individual is an employee. This “control” includes such things as the employer’s control over the individual’s work, schedule, assignments, pay, and many other aspects. In particular, the court listed numerous factors to take into consideration, including but not limited to:

the extent of the individual’s discretion over how to work
the duration of the relationship between the parties - temporary vs. long-term
whether the individual has the right to assign additional projects to others or must get the employer’s approval
the individual’s role in hiring and paying assistants
whether the work is part of the regular business of the employer
whether the employer is in business
whether any employee benefits are granted by the employer to the individual
the tax treatment of the individual
the location of the work
the skills required
the tools used
Etc.

See, Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730 (1989). As you can see, whether an individual is an "employee" is fact specific – it depends on the nature of the relationship between the employer and individual. So, where does this leave the regular, salaried individual on a 9-5 daily work schedule? Well, it’s most likely that this individual would be characterized as "employee" under the "work made for hire" concept. That’s because the employer likely controls most of the individual’s work, and meets many of the other factors which indicate the person is an "employee."

If a person is considered to be an "employee" for copyright purposes, what does this mean? It means that any work created by that employee within the scope of his or her employment is automatically owned by the employer! So, this is a 2 step analysis, in which you must first ask (i) whether the individual is an employee, and (ii) if the individual is an employee, was the work created within the scope of his or her employment. If both of these answers are "yes," then the employer will own the copyright to the work without having to do anything else! Let’s go over an example to illustrate how this works.

Work Made for Hire Example - Tom the Writer

Assume that Tom works as a writer for the Lincoln Herald News. Tom works 9 – 5 Monday through Friday and he drives to the office each day for work. Tom’s employer, the Lincoln Herald News, asks Tom to write featured articles for the newspaper. The articles that Tom writes while in the office on behalf of the newspaper will be owned by the Lincoln Herald News. However, if Tom decides to write articles on his own (perhaps on weekday nights or weekends), Tom will own the copyright to those articles. Ok, so this should seem simple enough. But what if Tom decides to write a spin-off of an article for himself that was an article he originally wrote for the newspaper? Who owns that copyright? In short, it depends. At this point, it may be beneficial to seek the advice of a copyright lawyer.

NOTE: If an employer creates an agreement with an individual as a "work for made for hire," that agreement could impose upon the employer obligations relating to issues such as state worker's compensation coverage, unemployment compensation, and other employee-like benefits. In other words, an employer may accidentally trigger employment issues by creating a work made for hire agreement. Therefore, it’s often a good idea to seek the advice of a lawyer for these issues.

Next, we’ll go over works made for hire by independent contractors.

Work Made for Hire by Independent Contractor

If a person is not an "employee" for copyright purposes, then that person is likely an independent contractor. An independent contractor can be either an individual or entity and is not considered to be under the control of an employer. In other words, an employer orders or commissions out work to an independent contractor but does not generally control how that work is created.

So, how can an employer obtain copyright ownership of a work created by an independent contractor under the "work for hire" doctrine? Well, it takes more steps for an employer to obtain copyright ownership from an independent contractor than from an employee. If you recall, an employer will own the copyright to works created by employees within the scope of their employment. There’s nothing else needed with employees – no written agreement or additional payments. However, that’s not the case with independent contractors. An employer can only obtain copyright ownership under a work for hire agreement from an independent contractor if the following 2 requirements are met:

(1) There is a written contract agreement between the parties specifying that the work is a "work made for hire."

This means all the elements of a contract must be satisfied, including consideration, e.g. the employer pays money to the independent contractor for the rights to the copyright.

(2) The work is created in 1 of 9 of the following situations:

as a part of a motion picture
as a part of 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.

Also, the work made for hire agreement between the employer and independent contactor should be made prior to the independent contractor beginning any work. Otherwise, the "work made for hire" agreement may fail. We’ll discuss why in more detail on the next page.

IMPORTANT NOTE: Many small businesses and employers fail to create written agreements with their independent contractors in work for hire situations. So, even if the employer pays money to the independent contractor for the work that does not mean the employer owns the copyright to the work! The employer must actually include the "work made for hire" language in a written agreement, and meet the other listed requirements to own the copyright to the independent contractor’s work.

Next, we’ll go over the differences between a work made for hire and copyright assignment.

Work Made for Hire vs. Copyright Assignments

There is a big difference between a "work made for hire" and a "copyright assignment." As discussed in this article, a work made for hire only deals with 2 situations, including with (i) employees and (ii) independent contractors. And generally, the work made for hire agreement should be created prior to any work being done. Otherwise, there’s a chance that the work made for hire agreement may not be valid, depending on the situation. Let’s go over an example to illustrate this concept.

Website Design Example

If you as the employer contract with an independent contractor to design a website for your company, and the independent contractor begins prior to signing any written agreement with you there’s a chance that a work made for hire agreement would not grant you all the copyrighted work. That’s because a work made for hire written agreement must meet the 3 elements of a contract, including (i) an offer, (ii) acceptance and (iii) consideration. The third element, consideration, means that there must be something given in exchange for the work – which is usually money! Additionally, under contract law, consideration must be for work to be completed, i.e. not past work.

So, if an independent contractor creates your logos, website design, and other company materials, and then you try to have him or her sign a work made for hire agreement, you’ll likely be too late. What do you do in this situation? Well, it’s often a good idea to have the independent contractor assign the work to you, as the employer.

An assignment is also a contract, so it must meet the formal requirements of a contract, including consideration. But an assignment is generally a good way for an employer to obtain copyright ownership in a work that has already been created by an independent contractor. You’ll also want to have certain provisions in the assignment, such as warrants, indemnification, and other clauses to fully protect your interests. You may want to consult an attorney for an assignment so you properly draft the assignment. Otherwise, you could again be faced with the prospect of not owning the full copyrights to the work.

We’ll wrap up this article with some final thoughts to keep in mind.

Conclusion

In this article, we talked about works made for hire by employees and independent contractors, the differences between employees and independent contactors under copyright law, how to properly create a work made for hire agreement, and when to possibly use an assignment instead of a work made for hire agreement. We’ve covered a good bunch of material! Now, you should have a much better understanding of how a "work made for hire" can be created.

With that said, there are no clear cut rules to when an individual may be considered an "employee" or "independent contractor" for copyright law purposes. In situations where it may not be so clear, you may want to consult an attorney for further assistance. Finally, we encourage that you read the supplement to this article, "Work Made for Hire – Top 10 Questions" That article will answer some of the most common questions associated with works made for hire. Also, take a look at the related articles listed below to learn more about this area of the law.