01 / 30 / 2014

The New Type of Copyright Owners

Our colleges and universities are producing more English, philosophy, and journalist majors in this decade than ever before. The number of recent graduates who desire to be self-published writers is dwindling, because most newly minted graduates are burdened with the ever increasing price of student loan debt. These proficient writers are entering the workforce as employees or contract labors; ultimately changing the face of copyrights.

Generally the author/creator of a work owns the copyright in that work. However, the Copyright Act allows the owner of the copyright to pass to another person under the “work made for hire” doctrine.  The “work made for hire” doctrine allows the ownership of the copyright to pass not to the author/creator of the work but to the employer or benefactor of the author/creator.  Therefore, business owners and writers need to be aware of the “work made for hire” doctrine and how it affects copyright ownership.

The Supreme Court, in Community for Creative Non-Violence v. Reid, has expressed that the ownership of a copyright can vest in someone other than the creator/author in two instances when the work is created: 1) by an employee within the scope of his or her employment and; 2) for a specially ordered commissions in which the parties expressly agree in a written instrument stating that the work is a “work made for hire.” In both instances the copyright ownership passes to the person paying for the work. Therefore, in order to determine if a work is “made for hire” it must be created by either an employee or an independent contractor.

In determining whether an employer/employee relationship exists for purposes of a "work made for hire," courts turn to general principles of agency law.  In order to determine if there exists employer/employee relationship between the writer and business owner there has to be some sort of control the hiring party exerts over the hired party.  This control can be manifested through: the ownership of the tools and instruments used to create the work; hiring party dictating the length of time spent working; hiring party dictating vacation days; hiring party dictating methods of payment; type of hired party’s benefits; and the tax treatment of the hired party.  Therefore, if the hiring party exerts control that is typical to that employer over its employee, an employer/employee relationship will likely be created.

Not only must an employee/employer relationship exist, the work that is created must fall within the scope of the employee’s job description in order for the work to be a “work made for hire.” In order to determine if the work that is created falls within the employment scope courts look at whether: the work is part of regular business of the employer; the employer directs the work that is created; and if the employer has the right to assign additional projects.   If the employer does create that type of work in its regular business and the employer has control over the work that is being created then the work will likely be created within the scope of the employment.  Therefore, if the work falls within the scope of employment the employer will own the copyright in that work.

However, if there is not an employer/employee relationship, then the author/creator is typically an independent contractor. If the author/creator is an independent contract the ownership of the copyright can still vest in the hiring party. In order for the hiring party to own the copyright the work must be one of nine types of works and the parties expressly agree, in a written instrument, that the work shall be a “work made for hire.” The nine types of work that are permissible to be a “work made for hire” are: 1) contribution to a collective work; 2) part of a motion picture or other audiovisual work; 3) translation; 4) supplementary work; 5) compilation; 6) instructional text; 7) test; 8) answers material for a test and; 9) an atlas. In addition, the hiring party and the hired party must execute a contract that explicitly states that the work be a “work made for hire."

As business owners and writers enter into joint ventures that have the possibility of creating works that are copyrightable. They need to be mindful of the agreements that they enter into. Those agreements will ultimately affect the ownership of the copyrights.

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