Many people mistakenly believe that if they hire someone to create something for them, it is automatically considered a “work for hire.” Whether you own a small business and are engaging a graphic designer to develop logos and website content, or a production company seeking a director for a new feature film, understanding work for hire arrangements may be very valuable to your future business and creative endeavors.
What exactly does “work for hire” mean?
Generally, under U.S. Copyright law, the person who actually creates a work is the author (and owner) of it. The author is the one who can benefit from the exclusive rights and privileges of copyright protection. However, there is an exception for works made for hire (or, “WFH”).
Under Section 101 of the Copyright Act a work made for hire is either:
(i) a work prepared by an employee within the scope of employment
(ii) a work specially ordered or commissioned for use as:
- a contribution to a collective work,
- a part of a motion picture or other audiovisual work,
- a translation,
- a supplementary work,
- a compilation,
- an instructional text,
- a test,
- an answer material for a test, or
- an atlas –
if the parties expressly agree in a written instrument signed by them that the work is considered a work made for hire.
In a work for hire scenario, the employer (or the person that commissioned the work) is considered the author (not the actual creator).
Why does it matter?
Many companies, no matter the size or industry, prefer to have WFH arrangements with those engaged to create material for them. If the company is considered the author of an original work, it can exclusively enjoy the privileges of copyright ownership. As legal owner, they would be able to exclusively reproduce and distribute the work, among other things, without seeking permission from the content creator.
Because the Copyright Act defines works for hire in two different ways, it is important to determine whether the work is being created by an employee or an independent contractor. It is essential to determine if ownership is inherent because of the nature of the employee/employer relationship. Otherwise, if a non-employee (independent contractor) is creating the copyrightable work, the agreement must be in writing and the nature of the work must fall under one of the 9 categories above.
Sometimes it can be tricky to determine if the person engaged to create the work is an employee or independent contractor. Although there is no clear-cut rule to resolve the issue, courts often take into consideration the (i) control of the employer over the work, (ii) control by employer over the employee, and (iii) status and conduct of the employer.
What if I’m not sure?
Work for Hire Agreements can contain carefully drafted, protective clauses for ambiguous or confusing situations. The contracts may include assignment language, indicating that if, for any reason, the work is not considered a WFH under the Copyright Act, then the author agrees to assign and transfer all right, title and interest in the work to the person commissioning it. Accordingly, if the situation was in fact, not a work for hire, the commissioner would still be the legal owner of the work.
But beware! An assignment of rights is not, in effect, the same as work for hire. Under copyright law, in certain circumstances, those who assign or transfer their copyrights may have termination rights after a set period of time. This rule does not typically apply to WFH – so it is generally a more favorable arrangement for those commissioning the work.
Defining the parameters of the WFH relationship, ownership and payment in writing before commencing development of a creative project is usually a good idea to protect your interests.
Does your business hire others to develop creative content?
Contributing Editor: Jessica Cox