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Works Made for Hire: Who owns the creation?

Works Made for Hire Columbus, OH

The bundle of rights associated with the concept of “copyright” exists from the moment a work is created in a fixed form. However, those rights generally belong to the creator or author of the work. So what happens when that author is someone you are paying to create the work for you, your business, or non-profit?

​Enter the concept of “works made for hire.” If a work meets the legal requirements to be considered a work made for hire, then the employer will be considered the author of the work, even if an individual employee was actually the original creator. 

“Just because you call it a ‘work made for hire’ doesn’t make it so.”

What are the legal requirements for works made for hire?
Works Made by Employees

A work prepared by an employee within the scope of his or her employment is a work made for hire. However, determining who is or is not an employee is not as simple as it sounds (mostly because we attorneys like to complicate the matters). For the purposes of copyright law, to determine whether a worker is an employee, the courts ask whether or not the worker is an agent of the employer. More specifically, the courts look at three broad factors in considering whether the worker is an agent, and therefore, an employee:

  1. Control over the work: Do you, as the employer, have control over the work? In other words, do you control how and where the work gets done? Do you provide the equipment necessary to create the work?
  2. Control over the employee: Do you, as the employer, have control over the employee? Do you set the schedule for creating the work? Do you assign work to the employee? Do you have the right to hire the people who work under the employee?
  3. Status and conduct of the employer: Do you conduct yourself as an employer? Do you provide employee benefits? Do you withhold taxes from the employee’s paycheck? Are you in the business of creating the types of work in question?

How these factors play out will vary from one situation to the next, but the case law is clear that just having one of these factors is not enough to make someone an employee for copyright purposes. Nevertheless, the closer the relationship comes to traditional, full-time employment and the more that creating works of the type in question is part of the employee’s typical job responsibilities, then the more likely the person will be considered an employee and their work treated as a work made for hire. 

Bottom Line: You don’t want an employee to create valuable work for your business or non-profit and then, because of the valuable nature of the work, find yourself in a legal fight because the employee tries to claim ownership of the work.

Works Made by Independent Contractors

But what if you are like many small businesses and non-profits who hired an independent contractor to create something? Certain types of works that are specially ordered or commissioned will be a work made for hire if there is an express written agreement signed by the parties that designates the work as a work made for hire. The types of works that can be designated as works made for hire are limited to:

  • Contributions to a collective work,
  • Parts of motion pictures or other audiovisual works,
  • Translations,
  • Supplementary works[1]
  • Compilations, 
  • Instructional texts (specifically, works intended to be used in systematic instructional activities),
  • Tests,
  • Answer materials for a test, or
  • Atlases. 

Outside of these specific types of work, just because you call it a “work made for hire” does not make it so. Instead, your contract with the independent contractor should assign all of their rights in the work to your business or non-profit. And this isn’t just some trivial distinction. If the work is made for hire, then the copyright never belonged to the worker who created it, but instead to the organization that paid for the creation of the work. But if, on the other hand, the copyright was assigned to the organization, there is a provision in copyright law that allows the original author to terminate the assignment after 35 years. (There are lots of legal requirements the author would have to fulfill before doing so, and we’ll cover the termination of copyright assignments in a future post.)

Because of the current trend towards cracking down on employers who mis-classify their workers as independent contractors, you should be especially careful about using work for hire clauses in your independent contractor agreements with individuals. For example, California law creates a presumption that if the contract with an individual designates their work as a work made for hire, then that individual is really an employee. This can create all sorts of problems if you are hiring an independent contractor from another state like California. It can potentially create liability for that person’s workers’ compensation and unemployment insurance, plus the associated back taxes, penalties, and interest, along with any other employment law claims that worker might try to bring against your business or non-profit. 

If you hire others to create works for your business or non-profit, then you need the right legal documents to protect your organization’s ownership interest in those works. 

If you are a freelancer who creates valuable works for others, you need to know what rights you are giving up before you sign the contract.

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