Work for Hire and US Copyright Law

The term “Work for Hire” is a often a misunderstood one. Most clients (and some freelancers) think that Work for Hire means that if someone is pays another person for a design, photograph, or website they “own” the rights to it. According to US Copyright Law, the reality of ownership is a little more complicated.

Disclaimer: I’m not a lawyer. Seek a qualified legal counsel before doing anything in this article.

Imagine the following scenario: you hire a photographer to take a few pictures at your wedding. You give the photographer money, they take the shots on the big day, then a month later you get amazing photos of your special day. Months later you’re driving down the freeway and happen to glance at a billboard, on display for the entire rush hour commute is you and your beloved at the wedding sharing a passionate kiss!

 

Furiously you meet your photographer and yell, “What gives you the right to display our private photos!?” The photographer simply states: “US Copyright Law” He might be a jerk, but he’s absolutely within his rights. US Copyright Law gives the author of the work ownership rights to use the work in whatever they choose. Just because you gave him $500 to shoot your wedding doesn’t give you ownership of the photos. Unless stated otherwise, you are granted a license by the author (the photographer) to use the prints or digital files.

Under the copyright law, the creator of the original expression in a work is its author. The author is also the owner of copyright unless there is a written agreement by which the author assigns the copyright to another person or entity, such as a publisher.

It’s not just writers and photographers, US Copyright Law by default grants ownership rights to work created by designers and software developers. Even if they’re paid for that work. In order to transfer ownership, more is needed. That’s were a Work for Hire comes in. If you’ve worked as a designer or developer as an employee, you might have seen this term “Work for Hire.” It isn’t just a random saying, but a legal definition.

Although the general rule is that the person who creates the work is its author, there is an exception to that principle. The exception is a work made for hire, which is a work prepared by an employee within the scope of his or her employment or a work specially ordered or commissioned in certain specified circumstances. When a work qualifies as a work made for hire, the employer, or commissioning party, is considered to be the author. – See Circular 9, Work-Made-For-Hire Under the 1976 Copyright Act.

In order for work to be classified as “Work for Hire” it must meet the below conditions:

a. a work prepared by an employee within the scope of his or her employment or b. a work specially ordered or commissioned for use 1. as a contribution to a collective work, 2. as a part of a motion picture or other audiovisual work, 3. as a translation, 4. as a supplementary work, 5. as a compilation, 6. as an instructional text, 7. as a test, 8. as answer material for a test, or 9. 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.

The written part is important, especially if you deal with contractors.

A work created by an independent contractor can be a work made for hire only if (a) it falls within one of the nine categories of works listed in part 2 above and (b) there is a written agreement between parties specifying that the work is a work made for hire

For startups, this is a critical point. If you work with contractors YOU MUST secure the ownership of their work for your company either through a specific Work for Hire agreement or what’s called a Copyright Assignment agreement. Otherwise you’re going to face some very uncomfortable questions when your investors ask who really owns the intellectual property at the core of your business.

If you’re a consultant or freelancer you should define in your contract who maintains ownership of the work. While US Copyright law is on your side if you don’t spell out the ownership, practically it’s best for all parties involved to resolve those issues at the beginning of the project rather than months later in court.

Finally, watch out for over-reaching Work for Hire agreements and modify any documents your client sends you (with the help of a qualified attorney) to protect any core libraries or code you may use from project to project.

Proper knowledge and understanding of copyright law and work for hire is an important skill in business. A qualified business attorney that you trust can help you draft a contract that works in your best interests while meeting the client’s goals and expectations.

Disclaimer: I’m not an attorney and not qualified to give legal advice. This is an opinion piece from a lay-person. Please do not take anything in this article as legal advice and seek proper legal console for your particular situation.