Work For Hire - Law in The United States

Law in The United States

The circumstances in which a work is considered a "work made for hire" is determined by the United States Copyright Act of 1976 as either

(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. (17 U.S.C. § 101)

The first situation applies only when the work's creator is an employee, not an independent contractor. The determination of whether an individual is an employee for the purposes of the work made for hire doctrine is determined under the common law of agency, in which a court looks to a multitude of factors to determine whether an employer-employee relationship exists. In the Supreme Court case affirming that the common law of agency should be used to distinguish employees from independent contractors in the work for hire context, Community for Creative Non-Violence v. Reid, the Court listed some of these factors:

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) (setting forth a non-exhaustive list of factors relevant to determining whether a hired party is an employee)."

On the other hand, if the work is created by an independent contractor or freelancer, the work may be considered a work for hire only if all of the following conditions are met:

• the work must come within one of the nine limited categories of works listed in the definition above, namely (1) a contribution to a collective work, (2) a part of a motion picture or other audiovisual work, (3) a translation, (4) a supplementary work, (5) a compilation, (6) an instructional text, (7) a test, (8) answer material for a test, (9) an atlas;
• the work must be specially ordered or commissioned;
• there must be a written agreement between the parties specifying that the work is a work made for hire.

In other words, mutual agreement that a work is a work for hire is not enough. As a general practice, such commissions specify an exclusivity period, confer publishing rights to the commissioning organization, or exempt the commissioning organization from performance and print royalties. For vocal works such as operas, a common practice is for the author of the text to be compensated as work-for-hire and the composer of the music to assume full rights under the copyright law.

When forced to rely on an implied license, a hiring party often finds that it has only limited rights to alter, update, or transform the work for which it paid. For example, a motion picture feature may hire dozens of creators of copyrightable works (e.g. music scores, scripts, sets, sound effects), any one of which could limit use of the entire film by denying permission to copy their contribution; the producers avoid this scenario by requiring that all contributions by non-employees fulfill the work-for-hire requirements.

An author has the inalienable right to terminate a copyright transfer 35 years after agreeing to permanently relinquish the copyright. However, according to the US Copyright Office, Circular 9 "the termination provisions of the law do not apply to works made for hire." These restrictions, in both the work for hire doctrine and the right of termination, exist out of recognition that artists frequently face unequal bargaining power in their business dealings. Nonetheless, failure to secure a work-for-hire agreement by commissioning organizations can create difficult situations. One such example is the artist Raymond Kaskey's 1985 statue Portlandia, an iconic symbol of the city of Portland, Oregon. Unlike most works of public art, Kaskey has put strong prohibitions on the use of images of the statue, located atop the main entrance to the famous Portland Building. He sued Paramount Pictures for including shots of the statue in the Madonna motion picture Body of Evidence. As a result, it is nearly impossible to film portions of one of downtown Portland's most vibrant neighborhoods, and the city has lost out on the potential to create merchandise and souvenirs from one of its most iconic landmarks.

An author can grant their copyright rights (if any) to the hiring party. However, if not a work made for hire, the author or the author's heirs may exercise their right to terminate the grant. Termination of a grant cannot be effective until 35 years after the execution of the grant or, if the grant covers the right of publication, no earlier than 40 years after the execution of the grant or 35 years after publication under the grant (whichever comes first).

The application of the law to materials such as lectures, textbooks, and academic articles produced by teachers is somewhat unclear. The near-universal practice in education has traditionally been to act on the assumption that they were not work for hire.

Where start-up technology companies are concerned, some courts have considered that the traditional factors for finding that an author is an "employee" can be less important than in more-established companies, for example if the employee works remotely and is not directly supervised, or if the employee is paid entirely in equity without benefits or tax withholding.