Most people believe that when they hire someone to create an artistic work, that the work is fully owned by them for their unlimited use. It makes sense; you contracted for that work, paid for it, so you own it and can do whatever you want with it. However, this is not always the case. The concept of who own the copyright and the rights that comes along with that ownership is often misunderstood by the public. Very often, it isn’t until that work is used in a context outside of the original intent that the creator asserts their claim and sues for infringement. So it is important to understand at least the basic legal tenets of work-for-hire.
As a general rule, the person that creates the work is the “author” and the author is the one that holds the rights to the work. The Copyright Act says that:
the person who translates an idea into a fixed, tangible form of expression and as a matter of law, copyright ownership “vests initially in the author or authors of the work”. 17 U.S.C. § 201(a).
So whoever creates the work is the owner automatically, without having to do anything, including register the copyright. (There are other reasons for registering as I have written about previously here). There is one rather large exception to this rule: Work-for-Hire, where the creator of a work does not retain the rights to that work.
There are two distinct provisions in the Copyright Statute on Work-for-Hire. In the first instance, the author is an employee, not an independent contractor. Here, the employer, which can be a person or a corporate entity, owns all the works a person creates. 17 U.S.C. § 201(b). However, the definition of employee is not always clear-cut. To decide whether a person is an employee, the Supreme Court has said that one must look to the common law of agency and the master-servant relationship. There are a multitude of factors in the work-for-hire decision process:
In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party’s right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party. See Restatement § 220(2).
To put this in layman’s terms, if you are a staff employee or contracted for a prolonged period, you are probably considered an employee. But don’t just assume you are an employee or as an employer, that you are the rights holder. It is best to consult an attorney and develop contracts that will eliminate any doubt as to the ownership. It is far better to take this small step than fight over it later in court.
The second instance is often the more problematic and severe. This situation involves a work or works are specially commissioned or ordered from an independent contractor, not an employee. Most purchasers of specially ordered works believe that they are the owner, purely by virtue that they asked for it and paid for it, but more often that not, the creator of the work retains the rights. Very specific criteria need to be followed for ownership of an ordered work to move from the creator, to the purchaser. That will be the topic of Part 2. (for more info, see the copyright pamphlet in our guides section)