The Doctrine of Work for Hire is Often Misunderstood
The Doctrine of Work for Hire in Copyright Law
Hello everyone!
Today, we’re going to talk about the doctrine of work for hire in copyright law. Often, there can be situations where you think you own a copyright because the work was made for hire for you or your production company. But, in fact, contrary to what the contract states, you might own nothing. Let’s explore the caveats and ways to solve this problem. Many think that just because they have a contract with artists and have paid for the work, they own the copyrights.
Let’s say you own a film production company and you’ve hired a screenwriter to write a screenplay. Who will own the copyright for the finished work?
The doctrine of work for hire is a fundamental concept in copyright law, particularly relevant in the realms of business, creative industries, and academia. Understanding this doctrine is crucial for both creators and those who commission creative work, as it dictates who holds the copyright under different circumstances.
If your work is commissioned in California, check the California AB-5 Law, as it will affect work-for-hire arrangements made in the state.
Under AB-5, there is a presumption that all workers are employees unless the employer can satisfy the criteria outlined in the ABC Test. This test emphasizes the degree of control exerted by the hiring entity, the nature of the work performed, and the worker’s autonomy in their trade or profession.
Initially, AB-5 was anticipated to reclassify approximately 2,500,000 workers, previously deemed independent contractors, as employees. This aimed to rectify widespread misclassification practices. While the legislation initially targeted prominent gig economy players like Uber and Lyft, the passage of Proposition 22—a ballot measure—exempted certain app-based transportation and delivery companies from AB-5’s scope.
We have created a separate blog post about how this California AB-5 law affects the entertainment industry.
Understanding Work for Hire
The doctrine of work for hire is often misunderstood. Essentially, this doctrine states that if a work is created by an employee as part of his or her job, or if specific types of works are commissioned under a written agreement, the employer or commissioner is considered the legal author. Consequently, the copyright of the work belongs to the employer or commissioner, not the individual who actually created it. But there is a caveat.
There are two primary scenarios where the work for hire doctrine applies:
- Employee Creations: When an employee creates a work within the scope of their employment, the employer is considered the copyright holder.
- Commissioned Works: For certain types of works (such as contributions to collective works, parts of a movie or other audiovisual work, translations, and others as specified by law), if they are specially ordered or commissioned and there is a written agreement stating that the work is considered a work for hire, the commissioner owns the copyright.
This doctrine is particularly relevant in creative fields like film production, music recording, software development, and publishing, where a large number of works are created collaboratively.
Work for Hire Doctrine Requirements
The concept of a “work made for hire” under the United States Copyright Act of 1976 can be determined in one of two ways:
- Employee-Created Works: This applies when a work is prepared by an employee as part of their employment duties.
- Commissioned Works: This refers to works that are specially ordered or commissioned for certain uses, such as a contribution to a collective work, a part of a motion picture, a translation, a supplementary work, a compilation, an instructional text, a test, answer material for a test, or an atlas. Crucially, this requires a written agreement signed by both parties stating that the work is intended as a work made for hire (17 U.S.C. § 101).
In the case of employee-created works, the distinction between an employee and an independent contractor is crucial. This determination relies on common law principles of agency.
To properly establish a “work for hire” arrangement under U.S. copyright law, certain requirements must be met. These requirements differ slightly depending on whether the creator is an employee or an independent contractor.
Requirements For Employee-Created Works:
- Employment Relationship: The creator of the work must be an employee, not an independent contractor.
- Scope of Employment: The work must be created within the scope of the employee’s job responsibilities.
- Intent of Parties: It should be clear that both parties intend the work to be considered a work for hire.
- Employer’s Role as Author: Under this arrangement, the employer is considered the legal author of the work.
The Supreme Court provided factors to consider when determining whether an employee-employer relationship exists. In Community for Creative Non-Violence v. Reid, the Court said that the common law of agency principles should apply to determine whether a creator of a work is an employee for purposes of the works made for hire doctrine.
The new California AB-5 law automatically classifies all independent contractors as employees by default. Check out also our post about the new California AB-5 law, which alters the classification of employees versus contractors in California..
Requirements For Works Created by Independent Contractors:
- Specific Categories: The work must fall into one of nine specific categories as outlined in the Copyright Act:
- A contribution to a collective work.
- A part of a motion picture or other audiovisual work.
- A translation.
- A supplementary work (like a foreword, afterword, bibliography, appendix, or index).
- A compilation.
- An instructional text.
- A test.
- Answer material for a test.
- An atlas.
- Written Agreement: There must be a written agreement between the parties specifying that the work is made for hire, signed before the work begins.
- Commissioning of the Work: The work must be specially ordered or commissioned.
For works created by independent contractors or freelancers, they can be considered a work for hire only if they fall into one of the nine specific categories listed above, are specially ordered or commissioned, and there is a written agreement stating the work is a work made for hire.
General Considerations for Both Scenarios:
- Rights Assignment: The copyright in a work for hire is automatically assigned to the employer or person who commissioned the work.
- Duration of Copyright: The copyright for a work for hire lasts either 95 years from publication or 120 years from creation, whichever is shorter.
- Creator’s Rights: The creator generally does not retain any rights to the work, including moral rights.
It’s important for both employers and creators to clearly understand and document these arrangements, as misunderstandings can lead to legal disputes over copyright ownership. Legal advice is often recommended to ensure compliance with these requirements.
It is important to note that a mutual agreement alone is insufficient. The agreement must fulfill all the specified criteria to be valid. Furthermore, courts have ruled that such an agreement must be negotiated, though not necessarily signed, before the commencement of the work. Retroactive designation of a work as made for hire is not allowed under the law.
Common Misinterpretations of the Copyright “Work for Hire” Doctrine
1. Misinterpretation: Employee-Created Software and Intellectual Property Ownership
Explanation: The “work for hire” doctrine applies only to copyright, not to all intellectual property rights like patents or trade secrets. An employee creating software doesn’t automatically transfer all intellectual property rights to the employer.
2. Misinterpretation: Ownership of Software Created on Company Equipment
Explanation: Copyright ownership under “work for hire” is contingent on the work being created within the scope of employment. If an employee develops software outside their job responsibilities, with their own resources, or in their personal time, the copyright may belong to them. Employers should use clear written agreements to define ownership of works and related IP rights created by employees.
3. Misinterpretation: Commissioning Software Development Equals Automatic Copyright Ownership
Explanation: For independent contractors, the Copyright Act specifies certain types of “specially ordered or commissioned” works as work for hire. These include contributions to collective works, parts of motion pictures or other audiovisual works, translations, supplementary works, compilations, instructional texts, tests, answer materials for tests, and atlases. For other types of works, including software not falling into these categories, a written copyright assignment is necessary for the commissioning party to own the copyright.
4. Misinterpretation: Software Programs as Automatic “Works for Hire”
Explanation: While a software program might be considered a contribution to a collective work in some instances, this classification is not straightforward and could lead to legal disputes. To avoid ambiguity and potential litigation, it’s prudent to include specific assignment clauses in software development contracts, ensuring clear and agreed-upon copyright transfer.
These clarifications emphasize the importance of understanding the nuances of the “work for hire” doctrine and the necessity of clear, written agreements to ensure copyright ownership aligns with the parties’ intentions.
How to Fix a Failure of Work for Hire: Addressing Non-Qualifying Scenarios
In situations where the creation does not meet the criteria for a work for hire, the copyright initially resides with the creator. This can pose a problem for businesses or individuals who commission works expecting to own the copyright. However, this issue can be resolved contractually.
Implementing a Copyright Assignment Clause
For projects that do not qualify under the work-for-hire criteria, it’s crucial to incorporate a copyright assignment clause in the independent contractor’s agreement. This clause should explicitly state that the independent contractor transfers some or all of their copyright rights to your business. Absent this clause, the independent contractor would maintain all rights to the created work, even if your agreement includes a work-for-hire provision.
Incorporating a copyright assignment clause into the independent contractor’s agreement is a straightforward process. To ensure comprehensive protection, consider adding this clause in conjunction with a work-for-hire provision. This approach covers scenarios where the created work may not be classified as a work for hire. The clause should clearly stipulate that, in cases where the work is not considered a work for hire, the independent contractor assigns all copyright rights to your company.
For example, if a film production company hires a freelance scriptwriter, and the arrangement does not meet the strict criteria for a work for hire, a copyright transfer clause can ensure that the film production company acquires the copyright of the script once it is completed. This clause acts as a safety net, ensuring that the commissioner of the work retains the rights they need for commercial exploitation or modification.
In conclusion, while the doctrine of work for hire automatically assigns copyright ownership in certain situations, it’s crucial for commissioners of creative work to be aware of scenarios where this doctrine does not apply. In such cases, a well-drafted copyright transfer clause is essential to secure the intended rights over the commissioned work. Legal consultation is often recommended when drafting such clauses to ensure they are enforceable and tailored to the specific needs of the commissioning party.
It is advisable to get expert assistance to draft these clauses accurately and effectively. Our team can help you ensure that your agreements are robust and provide the necessary legal protection for your business. Contact us today to set up proper contractual agreements tailored to your needs.
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