Copyright Ownership: The Work Made For Hire Doctrine - Part II
© Copyright 1995 Lloyd L. Rich

Part I discussed the significance to the publisher of the "work made for hire" doctrine with respect to copyright ownership. As a brief review, the Copyright Act defines the "work made for hire" doctrine as (1) a work prepared by the employee within the scope of his or her employment (employee prong) or (2) certain enumerated categories of work that are specially ordered or commissioned by the publisher (independent contractor prong). The publisher, if the work is a "work made for hire", will be the copyright owner of the work. This means the publisher will own all exclusive rights in the work and has the opportunity to commercialize the work to its fullest extent; publishing and distributing the work in print and other formats, creating derivative works, or by licensing or transferring all or some of the rights to third parties. The "work made for hire" doctrine pertains to much more than the just the "written word" as it applies to other types of copyrightable work in the book publishing process including illustrations, cover designs, indexes, appendixes and bibliographies.

The economic significance of copyright ownership for the publisher requires that the publisher fully understands and fulfills the specific "work made for hire" requirements enumerated in the Copyright Act and judicial decisions. The risk for failure to qualify a work as a "work made for hire" could result in the loss of copyright ownership and possibly all or some of the exclusive rights that accompany copyright ownership. The publisher might wind up saying, "What do you mean we don't own the rights?!"


Is the Creator of the Work an Employee or Independent Contractor?

The first question the publisher must ask with respect to the "work made for hire" doctrine is whether the creator of the work falls under the employee prong or independent contractor (freelancer) prong. The significance of this line-drawing is that there are different requirements in the Copyright Act for a work to qualify as a "work made for hire" depending upon whether the creator of the work is an employee or freelancer. If the creator of the work is an employee, the publisher, as the employer of this employee, automatically, without any written employment contract, owns the copyright and all exclusive rights in creative works of employees that are prepared within the scope of their employment. Judicial decisions have established that an "actual" employee is one where the publisher has the right to control the "manner and means" of production. Employee status will generally be found where there is a salaried employment relationship, tax withholding, employee benefits and other indicators of employment as outlined in Part I.

But if the creator of the work is not an employee, but instead a freelancer, than the "work made for hire" requirements of the independent contractor prong must be satisfied. This means that the work must be specially ordered or commissioned by the publisher, the work must fall into one of the nine enumerated categories of work, and there must be a signed writing between the parties where they agree that the work will be considered a "work made for hire."


Will the Publisher Own the Copyright for All Works Created by Employees?

Not necessarily. Even though the great majority of works created by employees will be owned by the publisher there is a possibility that some works might not be owned by the publisher. Although the requirement of "works prepared within the scope of employment" appears straight forward it can become somewhat complicated when employees work off the premises or when they create works on their spare time. If the work is to qualify as a "work made for hire" under the employee prong the employee must create the work within the normal scope of their job. The reason for this is that "no one sells or mortgages all the products of his brain to his employer by the mere fact of employment." Even if there is no question that the creator of the work is an employee, if the work is created outside the scope of the employee's normal job activities, it will cast doubt on the publisher's claim to the copyright. Therefore the "wise" publisher will reduce to writing the rights of the employee and publisher with respect to employment-related works and other works.


Will the Publisher Own the Copyright for All Works Created by Freelancers?

Not necessarily. Although the independent contractor prong requirements for a work to qualify as a "work made for hire" also appear to be straight forward, publishers often fail to satisfy the specific requirements. If the work fails to qualify as a "work made for hire" there is a great likelihood that the publisher will not own the work that he has paid for.

A freelancer's creative work in order to qualify as a "work made for hire" must satisfy the exact requirements of the Copyright Act. (1) The work must have been specially ordered or commissioned by the publisher. (2) The work must "fit" into one of nine narrow statutorily enumerated categories of work: (i) contribution to a collective work, (ii) part of a motion picture or other audiovisual work, (iii) translation, (iv) supplementary work (i.e., prepared for publication as a secondary adjunct to another author's work such as an index or forward), (v) compilation, (vi) instructional text, (vii) test, (viii) answer material for a test, or (ix) atlas. (3) The parties must agree in a written and signed document that the work shall be considered a "work made for hire." In addition, although it is not stated in the Copyright Act, the "work made for hire" document must be signed by both parties prior to the commencement of the work. If the publisher fails to satisfy any of these requirements the work will not qualify as a "work made for hire" and the publisher could lose copyright ownership of the work.

Where do publishers go wrong when freelancers create works that the publisher wants to qualify as "works made for hire"? The specially ordered or commissioned requirement is usually never a problem. The nature of work frequently creates problems for the publisher. The reason for this is that the nine enumerated categories of works are not all inclusive and many significant categories of works cannot be considered a "work made for hire" under the independent contractor prong of the Copyright Act. Therefore if a work does not fall into one of the nine categories, even if it was specially ordered or commissioned, it will not qualify as a "work made for hire." From my experience, the written document requirement presents the greatest difficulty for publishers. Some publishers have only oral agreements with their freelancers; as may be expected the work created under an oral agreement will not qualify as a "work made for hire". Other publishers prepare the written "work made for hire" document, however, for a variety of reasons the document is not signed by both parties until after the freelancer has started or even completed creation of the work. If this situation occurs the work will not qualify as a "work made for hire"; this is because the written document was not executed by both parties prior to the creation of the work.


Publisher Guidelines for a "Work Made For Hire"

The following guidelines should help you obtain and retain copyright ownership of creative works that are intended to qualify as a "work made for hire."

1. Reduce to writing the rights of the employee and publisher with respect to employment-related works and other works.
   
2. Have a written "work made for hire" agreement with all freelancers and independent contractors who create works that you want to qualify as a "work made for hire." Merely stating that this is a "work made for hire" agreement does not make it one; all the requirements of the independent contractor prong must be satisfied.
   
3. Make sure the written "work made for hire" agreement is signed by both parties before the creation of the work.
   
4. Include an appropriate "assignment" clause in the "work made for hire" agreement that will serve as a back-up if the work does not qualify as a "work made for hire".

Sign up for our FREE PubLaw Update Newsletter and receive new articles sent to your email address as they are published.

Lloyd L. Rich is an attorney practicing publishing and intellectual property law. He can be reached at 1163 Vine Street, Denver, CO 80206. Phone: (303) 388-0291; FAX: (303) 388-0477; E-Mail: rich@publishingattorney.com; Web Site:http://www.publishingattorney.com.