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Who Owns the Copyright in a Work Made for Hire? Part 2

work for hire in copyright

In part, I discussed the ownership of copyright for those artistic creators that were employees at the time of their creation.  But what if you are an independent contractor hired for a particular creative endeavor?  This is where the rules get a little messy and are often in favor of the artist, leaving the purchaser with the idea that they are the owner of a work simply because they purchased it.  This is not always the case.

 The second provision of the Copyright Act states that a creation by a non-employee / independent contractor is considered a work made for hire only if:

 . . . a work is 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. § 101)

 What does this mean in laymen’s terms?  Lets look at the individual pieces.

  1. First, the work must be specially ordered or commissioned.  That one is pretty easy.  Someone asks you to create something for a specific purpose; from a company logo to street art, then it specially ordered or commissioned
  2. The work must be part of the nine categories listed.  Only collective works, motion pictures and audiovisual works, and compilations are defined in the statute (see 17 U.S.C. § 101).  For the others, just use their common usage.  If the creative work is not in one of these categories, then it is not a work made for hire.
  3. Finally, there must be a written document, signed by both parties that specifically states that the work is a work made for hire.

One final point that is often the cause of considerable legal troubles:  is the person who creates a commissioned work really an independent contractor?  The question is not as simple as whether the person receives a salary or not. In fact, the Supreme Court in CCNV, specifically rejected the idea that employee refers only to formal, salaried employee. To help with this analysis, the Court laid out three broad guidelines to consider:

  1. Control by the employer over the work. For example, the employer determines how the work is done, has the work done at the employer’s location, and provides equipment or other means to create the work.
  2. Control by employer over the employee. For example, the employer controls the employee’s schedule in creating the work, has the right to have the employee perform other assignments, determines the method of payment, or has the right to hire the employee’s assistants.
  3. Status and conduct of employer. For example, the employer is in business to produce such works, provides the employee with benefits, or withholds tax from the employee’s payment.

You may have noticed that these terms are a bit vague. There is a lot of wiggle room here which can make the decision very difficult and when the stakes are high, the courts are often the only viable way to decide. Take this example:

Imagine that you are an animator and a Character Films hires you to create animated characters that will be part of an ongoing series of educational film shorts.  These characters will change for each installment. Character Films gives you a monthly fee to create up to three characters per month; a fee they pay through the same auto-pay system they use for their hired employees.  The company does not withhold taxes.  You have creative control but the characters you are provided guidelines and company has final approval. To speed up the process, the company provides you with one of their high-end computers to help speed up the rendering process, which they deliver to your home. You work at home and there is no schedule for your work hours, but there are often deadlines. Character Films also allows you use certain employees as assistants, when things get backed up.  The company doesn’t keep you from working on other assignments, but they do require that Character’s work take priority.  There is no  work for hire agreement.

Are you an employee or are you an independent contractor? An argument could be made for both. The implications are serious though.  If you are an employee, the right to the use of the characters is that of the company.  If Character Films wants to spin the characters off into a major motion picture, you have no say in that decision. But as an independent contractor, without a specific written agreement as a work-for-hire, you retain the rights to the works and could gain significant revenue from the licensing of those characters in any spin-off. You can also make derivatives of the characters for other works.

As a photographer and a lawyer, I have seen companies fall into this trap. Last year, a startup clothing company hired a photographer friend to shoot for a clothing line. The ad was not supposed to have great reach in the marketplace. The company then decided to use that shot for their corporate identity, placing the shot on catalog covers, in national ads and on billboards. Apparently, not having used an intellectual property attorney, only their corporate counsel who was not well versed in copyright law, the company believed that they were owners of the photograph an could do with whatever they wanted with it.  Only after they launched the identity campaign did they find out they were infringing on the photographer’s copyright.

The easiest way to resolve these issues is to make sure all the parties are aware of the expectations of the use of the work and put it in writing. Have an IP lawyer involved if possible.  Over the next couple of weeks, we at the Art Law Journal will begin posting some forms that may help make this process easier.  Just check our Forms area, and take a look at the work made for hire Guide from the Copyright Office in our Guides section.  Also, sign up for our newsletter, which will alert our readers to any new-posted materials

About the author

Steve Schlackman

As a photographer and Patent Attorney with a background in marketing, Steve has a unique perspective on art and law. Should you have any questions on Intellectual Property contact him at [email protected] His photography can be seen online at Fotofilosophy.com or on display at the Emmanuel Fremin Gallery in New York City.

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