Intellectual Property Newsletter
Copyright Ownership in Works Made for Hire
Ownership of a copyright gives the owner exclusive rights in the copyrighted work, such as the rights to reproduce, distribute, perform and display the work. According to Section 201 of the federal Copyright Act (the Act), copyright ownership initially vests in the author of a work (i.e., the person who actually creates the work).
However, the Act carves out an exception to the general ownership rule in the case of a “work made for hire.” In general terms, the “work made for hire” doctrine holds an employer or other person for whom a work is prepared as the author and copyright owner of the work. For example, under this doctrine, a book publisher is considered the owner of copyright in a book created by an employee.
The Work Made for Hire Doctrine
The Act provides a two-pronged definition for whether a work is “made for hire.” Specifically, a work will be “for hire” if it falls within one of the following two categories:
- The work is prepared by an employee within the scope of his or her employment; or
- The work is specially ordered or commissioned to be made by an independent contractor, and the parties expressly agree in a signed writing that the work shall be considered a work made for hire.
For purposes of the second provision, the Act enumerates nine categories for which a work made for hire may be specially ordered or commissioned:
- Contribution to a collective work
- Part of a motion picture or other audiovisual work
- Supplementary work (i.e., a secondary adjunct to a work by another author)
- Instructional text
- Answer material for a test
Further, given the writing requirement in the second provision, the determination of copyright ownership in the absence of a clear written contract ultimately depends on whether the party hired to create the resulting work is better classified as an “employee” or as an “independent contractor.”
“Employee” Versus “Independent Contractor”
In 1989, the U.S. Supreme Court established a multi-factor test to determine whether a hired party is an “employee” or an “independent contractor” in Community for Creative Non-Violence v. Reid. In the Reid case, a nonprofit association dedicated to eliminating homelessness in America hired an artist to create a sculpture of a modern Nativity scene. As the parties did not have a written agreement and the sculpture did not fall into any of the nine enumerated categories for commissioned work (discussed above), the Court’s main inquiry in determining copyright ownership in the sculpture was whether the artist was an employee. Emphasizing that a determination of employee status turns on an inquiry into “the hiring party’s right to control the manner and means by which the product is accomplished,” the Court weighed the following factors to conclude that the artist owned the copyright in the sculpture:
- Skill required
- Source of the materials and tools
- Where the work was performed
- Length of relationship between the parties
- Whether the hiring party could assign additional projects to the hired party
- Extent of hired party’s discretion over when and how long to work
- Method of payment
- Hired party’s role in hiring and paying assistants
- Whether the work was part of the hiring party’s regular business
- Whether the hiring party is in business
- Whether the hiring party paid employee benefits
- Tax treatment of the hired party
In the 1992 case of Aymes v. Bonelli, the Court of Appeals for the Second Circuit applied the last two Reid factors to determine whether a “part-time” graduate student who developed a computer program for a swimming pools and supplies business without an employment agreement regarding ownership of copyright was an “employee.” Ultimately, the court held that the part-time graduate student was not an employee under the work made for hire doctrine, meaning that the computer program was not a work made for hire and that copyright belonged to the student. The court reasoned that the last two Reid factors (i.e., employee benefits and tax treatment) were determinative of the copyright status of the computer program.
Duration of Copyright in Works Made for Hire
The duration of copyright in a work depends on which category of work the copyrightable material falls into. The Act creates a single copyright term for works originally created on or after January 1, 1978. According to the terms of the Act, a copyrightable work that is created on or after January 1, 1978 is automatically protected from the moment of its creation. This means that the author is not required to publish or register the work in order to be eligible for copyright protection. For works made for hire, copyright protection endures for the shorter of 95 years from first publication or 120 years from creation.
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