At some point during the life of your business, there’s a good chance you’ll hire an outside worker, or an independent contractor. When you do, it’s best to have a well-drafted independent contractor services agreement that details the scope of services, wages, and other important details about the project. In addition, you’ll want to protect one of the most important aspects of your business, your intellectual property. Today’s post details the copyright issues related to a work “made for hire"—i.e. projects completed by an independent contractor. Understanding these key issues may protect you and your business from costly litigation over intellectual property ownership and interest disputes.
The 1976 Copyright Act Under the Copyright Act, a work is protected by copyright automatically at the time it is created in a fixed form. For example, when your favorite artist paints a picture, the copyright immediately becomes the property of the artist. Only the artist (and those who the artist transfers rights to) can claim the copyright.
This is the general rule. As is the case with every general rule, there is an exception.
Works Made For Hire Copyright law defines a category of works that are considered “works made for hire." If a work falls into this category, the employer—not the employee who created the work—is considered the author. To understand some of the complexities of this exception, it’s important to understand the statutory definitions and the case law interpretations.
Statutory Definition “Works made for hire" is defined under Section 101 of the Copyright Act as (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.
To elaborate further,a “supplementary work" is a work prepared for a publication as a secondary addition to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes; and an “instructional text" is a literary, pictorial, or graphic work prepared for publication and intended to be used in systematic instructional activities.
How To Determine Whether Your Work was Made for Hire? Typically, whether or not your work is made for hire is determined by the relationship of the parties. This determination is often very difficult since the statutory definition is complex and not always easily applied—as is the case with many statutory definitions.
In 1989, the Supreme Court decided Community for Creative Non-Violence v. Reid, and clarified that the first step in determining whether a work is made for hire is to determine whether the work was prepared by (a) an employee or (b) an independent contractor. If the work is created by an employee, then the part 1 of the statutory definition applies, and (in general) the work is considered a work made for hire. If a work is created by an independent contractor, then the work is a specially ordered or commissioned work, and part 2 of the statutory definition applies.
Under part 2 of the definition, a work will be made for hire only if two conditions are met. First, the work comes within one of the nine categories of works listed in part 2 of the definition. Second, there is a written agreement between the employer and the independent contractor that specifies that the work is made for hire.
Employee v. Independent Contractor For the purposes of defining an employee for Section 101 of the Copyright Act, you’ll need to look to the general common law of agency. In the same Supreme Court case (CCNV v. Reid), the court identified the following factors to determine whether an employer-employee relationship existed:
· Control by the employer over the work;
· Control by employer over the employee;
Generally, the closer the employment relationship comes to a regular, salaried employment, the more likely the work was created within the scope of employment and, therefore, considered a work made for hire.
Who’s the Author of a Work Made for Hire? If a work is made for hire, the employer is the author. On an application for copyright registration, the employer should be named the author of the work.
Who Owns the Copyright in a Work Made for Hire? Again, if a work is made for hire, the employer is the owner of the copyright unless there is a written agreement to the contrary, signed by both parties.
How Long Does Your Copyright Last? Copyright for a work made for hire is 95 years from the date of publication or 120 years from the date of creation, whichever expires first. This is an important distinction from a work that is not made for hire, since the copyright protection for works not made for hire is generally for the life of the author plus 70 years.