Copyrights, Works Made For Hire & Employees

I’ll be honest.  I hate the work made for hire doctrine in the Copyright Act.  It’s a confusing mess to understand and it tends to give some companies a false sense of security about intellectual property ownership.

In some cases, like for regular, salaried employees, the doctrine is somewhat straight forward. But for independent contractors, the doctrine is complex and confusing and more of a problem than a help in many situations.

So today, I’ll start with the simple part and address how the work made for hire doctrine applies to regular, real employees.

First, what is the work made for hire and why should I care?

Usually, pursuant to the Copyright Act, when an original work of authorship is created and fixed in tangible form, like typed into a computer program or written on a piece of paper, copyright protection arises and the copyright automatically becomes the intellectual property of the author who created it.

The Copyright Act created an exception to that rule.  Under the work made for hire doctrine, if an original work is a “work made for hire” then the Copyright Act defines the employer as the author and copyright owner and not the employee.

The first part of Section 101 of the Copyright Act states:

A “work made for hire” is —

(1) a work prepared by an employee within the scope of his or her employment; or . . .  .

This exception can help companies retain copyright rights when they fail to have their regular employees sign a written copyright assignment.

But of course the definition of “employee” isn’t the standard, everyday definition that companies actually use.

Rather, “employee” means employee as determined by the general common law of agency.

Agency Law.  There are several factors that determine whether an “employee” is really an “employee” under agency law including but not limited to the following:

1.  The employer’s control of the work

• Does the employer tell the employee how to do the work?
• Is the work done at the employer’s location?
• Is the work done with the employer’s equipment?

2.  The employer’s control over the employee

• Does the employer control the employee’s schedule?
• Does the employer tell the employee what to do?
• Does the employer determine how to pay the employee?

3.  Employer’s status and conduct

• Does the employer withhold taxes?
• Does the employer pay benefits?
• Is the employer in the business of selling the work?

Although the courts have not been clear about which factors must be present to establish an employment relationship in this context, if most of the answers to these questions are “yes,” it is more likely that the person would be an employee.

In that case, the copyrightable work created by the employee within the scope of her employment is owned by the employer.

Of course, the work must be created “within the scope of his or her employment” to be a work made for hire.  Again what exactly is within the scope of employment is open for argument.

But for the most part, if the employee is doing what they were hired to do and paid to do, then the work is more likely to be considered a work made for hire and the employer would automatically own any copyrights to the work.

But I think it is very, very fool hardy to rely on this doctrine to transfer copyright rights.  I consider it to be more of a save your but in a bad situation doctrine.

I believe that a company should always have its employees who are creating valuable work  sign a broad intellectual property assignment agreement that covers more than copyrights and directly transfers rights to the company.

My next post will discuss the nightmare of how the work made for hire doctrine applies to independent contractors.  At least I’ll try.