Determining Whether a Work Is Made for Hire

Determining Whether a Work Is Made for Hire

Whether or not a particular work is made for hire is determined by the relationship between the parties. This determination may be difficult, because the statutory definition of a work made for hire is complex and not always easily applied. That definition was the focus of a 1989 Supreme Court decision (Community for Creative Non-Violence v. Reid, 490 U.S. 730 [1989]). The court held that to determine whether a work is made for hire, one must first ascertain whether the work was prepared by (1) an employee or (2) an independent contractor. If a work is created by an employee, part 1 of the statutory definition applies, and generally the work would be considered a work made for hire. Important: The term “employee” here is not really the same as the common understanding

of the term; for copyright purposes, it means an employee under the general common law of agency. This is explained in further detail below. Please read about this at “Employer- Employee Relationship Under Agency Law.” If a work is created by an independent contractor (that is, someone who is not an employee under the general common law of agency), then the work is a specially ordered or commissioned work, and part 2 of the statutory definition applies. Such a work can be a work made for hire only if both of the following conditions are met: (1) it comes within one of the nine categories of works listed in part 2 of the definition and (2) there is a written agreement between the parties

specifying that the work is a work made for hire.

Employer–Employee Relationship under Agency Law

If a work is created by an employee, part 1 of the copyright code’s definition of a work made for hire applies. To help determine who is an employee, the Supreme Court in CCNV v. Reid identified certain factors that characterize an “employer-employee” relationship as defined by agency law: 1 Control by the employer over the work (e.g., the employer may determine how the work is done, has the work done at the employer’s location, and provides equipment or other means to create work) 2 Control by employer over the employee (e.g., the employer controls the employee’s schedule in creating work, has the right to have the employee perform other assignments, determines the method of payment, and/or has the right to hire the employee’s assistants) 3 Status and conduct of employer (e.g., the employer is in business to produce such works, provides the employee with benefits, and/or withholds tax from the employee’s payment). These factors are not exhaustive. The court left unclear which of these factors must be present to establish the employment relationship under the work for hire definition, but held that supervision or control over creation of the work alone is not controlling. All or most of these factors characterize a regular, salaried employment relationship, and it is clear that a work created within the scope of such employment is a work made for hire (unless the parties involved agree otherwise). Examples of works for hire created in an employment

relationship are:

• A software program created within the scope of his or her duties by a staff programmer for Creative Computer Corporation

• A newspaper article written by a staff journalist for publication in the newspaper that employs him

• A musical arrangement written for XYZ Music Company by a salaried arranger on its staff

• A sound recording created by the salaried staff engineers of ABC Record Company

The closer an employment relationship comes to regular, salaried employment, the more likely it is that a work created within the scope of that employment would be a work made for hire. However, since there is no precise standard for determining whether or not a work is made for hire under the first part of the definition, consultation with an attorney for legal advice may be advisable.

Who Is the Author of a Work Made for Hire?

If a work is a work made for hire, the employer or other person for whom the work was prepared is the author and should be named as the author in Space 2 of the application for copyright registration. The box marked “work-made-forhire” should be checked “yes.”

Who Is the Owner of the Copyright in a Work Made for Hire?

If a work is a work made for hire, the employer or other person for whom the work was prepared is the initial owner of the copyright unless there has been a written agreement to the contrary signed by both parties.

Effect on Term of Copyright Protection

The term of copyright protection of a work made for hire is 95 years from the date of publication or 120 years from the date of creation, whichever expires first. (A work not made for hire is ordinarily protected by copyright for the life of the author plus 70 years.) For additional information concerning

the terms of copyright protection, request Circular 15a, Duration of Copyright.

Effect on Termination Rights

The copyright code provides that certain grants of the rights in a work that were made by the author may be terminated 35 to 40 years after the grant was made or after publication, depending on the circumstances. The termination provisions of the law do not apply to works made for hire.

Work made for hire

A work made for hire (sometimes abbreviated as work for hire and WFH) is an exception to the general rule that the person who actually creates a work is the legally-recognized author of that work. According to copyright law in the United States and certain other copyright jurisdictions, if a work is "made for hire", the employer—not the employee—is considered the legal author. In some countries, this is known as corporate authorship. The incorporated entity serving as an employer may be a corporation, an organization, or an individual.

The actual creator may or may not be publicly credited for the work, and this credit does not affect its legal status. For example, Microsoft hired many programmers to develop the Windowsoperating system, which is credited simply to Microsoft Corporation. By contrast, Adobe Systems lists many of the developers of Photoshop in its credits. In both cases, the software is the property of the employing company. Similarly, newspapers routinely credit news articles written by their staff, and publishers credit the writers and illustrators who produce comics featuring characters such as Batman or Spider-Man, but the publishers claim legal authorship of the work.

States that are party to the Berne Convention for the Protection of Literary and Artistic Works recognize "moral rights" that include the right of the actual creators to publicly identify themselves as such, and to maintain the integrity of their work.

Under U.S. law, the owner of a copyright in a work is the author. In most cases, this is the individual or group of individuals that creates the work. However, when a work is considered a work made for hire - more commonly called a "work for hire", abbreviated as "WFH" - the author of the work is no longer the individual creator or creators. Instead, the author is considered to be the entity that hired the creator of the work.

The circumstances in which a work is considered a work made for hire is determined by the language of the United StatesCopyright Act of 1976:

Works Made for Hire. -- (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. (17 U.S.C. sec 101)

The first situation applies only when the work's creator is an employee and not an independent contractor. The determination of whether an individual is an employee for the purposes of the work made for hire doctrine is determined under "the common law of agency". Although the distinction between an employee and an independent contractor can be difficult to analyze in some situations, it is clear that a work created within the scope of a regular salaried or hourly employee's job is a work made for hire. Typical examples of works made for hire are a software program created by an employee programmer or ad copy created by a marketing department employee.

If a work is created by an independent contractor or freelancer (that is, someone who is not an employee), the work can be created as a work made for hire, or not. In order for it to be a work made for hire, all of the following conditions are required: i) the work must be specially ordered or commissioned; ii) the work must come within one of the nine categories of works listed in the definition above; and iii) there must be a written agreement in advance between the parties specifying that the work is a work made for hire.

The determination of whether a particular work is a work made for hire can be crucial to the hiring party's ability to utilize the created work. If a work is considered a work made for hire, the author and owner of the work is the hiring party. If the work is not a work made for hire, the hiring party has no copyright ownership in the work, and its ability to use the work would therefore depend either on the specific terms of its agreement with the author, or upon the concept of an implied license to use the work. If forced to rely on an implied license, the hiring party may find that it has only limited rights to alter, update, or transform the work for which it paid. For example, a motion picture feature may employ dozens of creators of copyrightable works (e.g. music scores, costumes, scripts, sets, sound effects), any one of which could limit use of the entire film by denying permission to copy their contribution; the producers avoid this scenario by hiring the creators as employees or as work-for-hire contractors.

Even when a work is not a work made for hire, the parties can agree to assign copyright rights from the author to the party paying for the creation of the work. Under certain circumstances, the creator may retain some rights to the material following this assignment, either through provisions of a contract surrounding the assignment or through statute. For example, the Copyright Act of 1976 and the Sonny Bono Copyright Term Extension Act of 1998 extended U.S. copyright terms and allowed creators of pre-existing work to reclaim the copyright when the previous shorter term would have expired.

Copyright duration

In the United States a "work for hire" (published after 1978) attracts a special copyright duration: the shorter of 95 years from publication, or 120 years from creation; rather than the usual life of the author plus 70 years.

In the European Union, even if a Member State provides for the possibility of a legal person to be the original right holder (such as is possible in the UK), then the duration of protection is in general the same as the copyright term for a personal copyright: i.e., for a literary or artistic work, 70 years from the death of the human author, or in the case of works of joint authorship, 70 years from the death of the last surviving author. If the natural author or authors are not identified, nor become known subsequently, then the copyright term is the same as that for an anonymous or pseudonymous work, i.e. 70 years from publication for a literary or artistic work; or, if the work has not been published in that time, 70 years from creation. (Copyright durations for works created before 1993 may be subject to transitional arrangements).

Work Made For Hire

Copyright in a protectible creation vests initially in the author or, in the case of a joint work, authors, of a creation.2 The Copyright Act’s “work made for hire” doctrine is the fundamental exception to the general rule that copyright ownership vests initially in the individual who creates the work.3 The significance of this concept is not inconsequential. With ownership comes control over the exclusive rights in a work and, hence, the ability to commercialize a work to its fullest extent. Section 101 of the Copyright Act of 1976 provides that a work is made for hire if it

falls within one of two overall categories. First, a work will be considered “for hire” if it is prepared by an employee within the scope of his or her employment. Thus, when a software programmer authors new code as part of performing her job, the software company itself is considered the author of the work despite the obvious fact that the individual programmer created the work. The second way in which a work would be considered for hire is if a freelancer or independent contractor creates a work by commission or special order. Two further conditions must be met for such commissioned works: (1) the work falls within one of nine categories enumerated in the statutory definition of work made for hire, and (2) there is a written agreement between the parties specifying that the work is made for hire. While deciding whether a work is

made for hire might seem like a simple question at first blush, the answer is a complex one that takes into account common law principals as well as statutory law. If an “employee” authors a work, part one of the statutory definition is triggered and courts look to the common law of agency to determine whether the creator of a work is an employee for purposes of copyright law. Under the law of agency, courts place emphasis on the “hiring party’s right to control the manner and means by which the work is accomplished.”4 In the seminal case Community for Creative Non Violence v. Reid,

490 U.S. 730 (1989), the United States Supreme Court listed certain factors that are relevant when deciding whether an employee-employer relationship is present:

The skill required in making the work

Whether the hiring party supplied the tools and instrumentalities used in the creation of the work

The place where the work is created

The length of time the two parties will be working with each other

Whether the hiring party can assign additional work

The hired party’s ability to choose when and how long to work for

The method in which the hiring party pays the hired party

Whether the hired party can hire and pay assistants

Whether the hiring party engages in this type of work on a regular basis

“Whether the hiring party is in business”

Whether the hired party receives employee benefits, and

The method of tax treatment given to the hired party.5

Essentially, the more it appears that the hiring party treats the hired party as a

“regular, salaried” employee, the more likely it is that the court will find that an

employee-employer relationship exists.6 On the other hand, the more the hired person

appears to be working under his own control, with his own workspace and using his own

tools, the more likely it is that the court will consider the hired party not an employee, but

rather an independent contractor.7

If the hired party is found to be an employee of the hiring party, then the hired party

must have acted in the scope of employment when creating the work if the creation is to

be considered made for hire.8 The scope of employment encompasses the tasks that the

employee would reasonably be expected to carry out while serving the employer’s

interest.9 An employee taking on a task as a personal endeavor, however, would not be

considered acting within the scope of employment.

Examples that the United States Copyright Office provides of work made for hire in

an employee-employer relationship include:

“A newspaper article written by a staff journalist for publication in a

newspaper that employs him.” 10

“A musical arrangement written for XYZ Music Company by a salaried

arranger on its staff.”11

If the court finds that the hired party is not an employee, but a freelancer or

independent contractor, then the court will both (1) look for a signed written document in

which the two parties agree that the work is made for hire and (2) ensure that the work

created fits into one of the categories listed in § 101.12 These categories limit work made

for hire to creations that include only the following:13

A contribution to a collective work

Part of a motion picture or other audiovisual work

A translation

A supplementary work that comments upon, explains, revises, or assists in the use of another work

A compilation

An instructional text

A test

Answer material for a test, or

An atlas.14

The work must be created for one of the statutorily expressed purposes, otherwise the creation will not be considered a work for hire and the independent contractor will retain authorship and ownership of the work and the privilege to exploit all exclusive rights in the work.15 A stand-alone work created by an independent contractor will most likely not fit into one of the nine statutory categories and will not be considered a work made for hire.