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Is it important to detail an employee's obligations for copyright purposes?

Posted by Giselle Ayala Mateus | Sep 29, 2021 | 0 Comments

When it comes to copyright there are only two options, the creator is the copyright owner, or someone else is. Copyright is a type of intellectual property privilege that protects the rights over original works of authorship as soon as an author fixes the work in a tangible and durable form of expression. Under copyright law creator's original work may be paintings, photographs, illustrations, musical compositions, sound recordings, computer programs, books, poems, blog posts, movies, architectural works, plays, and so much more!

Copyright law protects a work from the time it is created in a fixed form. Only the author or those deriving rights from the author can rightfully claim copyright. There is, however, an exception to this principle: “works made for hire.” If a work is made for hire, an employer is considered the author even if an employee actually created the work. The employer can be a firm, an organization, or an individual.

The general rule is that the creator of a work is the copyright owner. The exception, the "work for hire", arises out of an employment relationship or a specific agreement in a contract. The importance of knowing whether creation is a "work for hire" is that the creator of a "work for hire" will never have rights in the work. In other words, unless the employer or company grants the creator a license, the creator will not be able to exercise any of the exclusive rights associated with the copyright, such as reproducing or distributing the work. Additionally, for works made for hire, the employer/company is deemed the "author" of the work from its inception, and the creator, therefore, cannot regain any rights in the work.

The concept of “employment” in Copyright

When it comes to copyright and the concept of work for hire, understanding the concept of an employment relationship is fundamental because all creation and works produced by an employee within the scope of his employment are the employer's exclusive property. If the creation of work falls under the scope of general job responsibilities of the employee, an express "work for hire" agreement is not necessary. Here, the time and place of creation of the work are important. A general rule of thumb is that if an employee creates a work during his or her own time, copyright rights belong to the employee not to the employer. For example, an employee who spends his or her work hours focusing on creating and writing a newsletter for the employer or taking pictures for the employer does not retain copyright rights to the work.

Additionally, a "work for hire" exists when the creator of the work is an employee and not an independent contractor. In Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) the Supreme Court explained that the definition of an employer-employee relationship is determined by the use of agency law principles. 

Under the general common law of agency--which determines whether a person is an "employee" for purposes of the "work for hire" copyright ownership provisions of the Copyright Act of 1976 (17 USCS 101201(b))--with respect to a sculpture on homelessness, which sculpture was commissioned by a nonprofit unincorporated association dedicated to eliminating homelessness, the sculptor is not an employee of the association but an independent contractor, even though association members directed enough of the sculptor's work to insure that he produced a sculpture that met their specifications, because the extent of the control that the hiring party exercises over the details of the product is not dispositive, and because all the other circumstances weigh heavily against a finding of an employment relationship, where (1) sculpting is a skilled occupation; (2) the sculptor supplied his own tools; (3) the sculptor worked in his own studio in Baltimore, Maryland, making the association's daily supervision of his activities from Washington, D. C., practically impossible; (3) the sculptor was retained for less than 2 months, a relatively short period of time; (4) during and after this time, the association had no right to assign additional projects to the sculptor; (5) apart from the deadline for completing the sculpture, the sculptor had absolute freedom to decide when and how long to work; (6) the association paid the sculptor $ 15,000, a sum which was dependent upon completion of the specific job, and thus used a method by which independent contractors are often compensated; (7) the sculptor had total discretion in hiring and paying assistants; (8) creating sculptures was not a regular business for the association, which was not a business at all; and (9) the association did not pay payroll or Social Security taxes, provide employee benefits, or contribute to unemployment insurance or workers' compensation funds.

As the court explained many factors are considered to determine if a person is an employee or an independent contractor. The following factors are some of the most important:

  • The skill required to create the work. 
  • The source of the instrumentalities and tools required to create the work. 
  • The location where work will be created.
  • The duration of the relationship between the parties, employer-employee.
  • Whether the hiring party has the right to assign additional projects to the hired party.
  • The extent of the hired party's discretion over when and how long to work.
  • The method of payment.
  • The hired party's role in hiring and paying assistants.
  • Whether the work is part of the regular business of the hiring party.
  • Whether the hiring party is in business.
  • The provision of employee benefits, and
  • The tax treatment of the hired party.

Is it enough to have an employment agreement well defined?

In general, terms, when a work is created within the scope of an employment relationship there is no need for additional agreement or even an express contractual provision stating that anything created by the employee is a "work for hire". However, it is a good practice to include a provision that states that all work created by the employee will be deemed work for hire and that the employee agrees to assign all right into the work to the employer, as a preventive measure, if at any point in litigation a court determines that there was no employment relationship. 

So... Is it important to detail an employee's obligations for copyright purposes?

In fact, it is very important. From the beginning of a business or contractual relation, it should be properly stated the relation of the parties and the scope of such a relation. This is a good practice and can save the parties money and time if there is a conflict.

Additionally, if there are other reasons for entering into an independent contractor relationship with a creator, then a written agreement should be clear regarding the "work for hire" character of any work made by the independent contractor. It would be also important to consider the fact that, only the nine categories of works listed in the Copyright Act are considered works for hire. For all other works, the parties must sign an assignment agreement.  

Works created by independent contractors that do not fall within one of the nine statutory categories will not be considered works made for hire, even if the parties have entered into an agreement expressing their intent that the work should be considered as such. The nine categories cover the following types of works:

  1. Works created as a contribution to a collective work.
  2. Works that are part of a motion picture or other audiovisual work.
  3. A translation.
  4. A supplementary work.
  5. A compilation.
  6. An instructional text.
  7. A test.
  8. Answer material for a test.
  9. An atlas. 

About the Author

Giselle Ayala Mateus

Giselle Ayala Mateus is a NY attorney with comprehensive experience in transactional law, creative agreements, business formation, and immigration law. She is also the founder of FOCUS a not-for-profit project focused on supporting entrepreneurs and artists.

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