Work For Hire Agreements
Work For Hire
Intellectual Property Audit
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.”
What Does the Term “Work For Hire” Mean?
A work for hire generally refers to those works that your business or nonprofit hired someone else to create. However, copyright law has specific requirements that must be met before a work will be treated as a work made for hire. The requirements vary depending on whether the work was made by one of your employees or by an independent contractor.
Work Created by Your Employees
If the work was created by an employee “in the course and scope of their employment,” then the work is a work made for hire. Whether the person is an employee or not for the purposes of copyright law depends on 3 factors:
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 a 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.
Work Created by an Independent Contractor
But what if you are like many small businesses and nonprofits 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:
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.
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 generic 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 nonprofit.