Advice

What's a 'Work for Hire' and Why Should You Care?

The rule of copyright says that you own what you create; here is the exception

opensource.com / Creative Commons

December 03, 2014

A provost learns to his dismay that the university shares copyright ownership of a popular MOOC with the professor who created it. A professor finds to her surprise that students who helped produce an animation to illustrate a lecture are co-owners of the copyright. Yet another professor, who wrote and put together a video for his course, is shocked to learn that the university that employs him and the company that produced the video share copyright ownership of it—without him.

Those scenarios answer the second part of the question posed in this essay’s title: Why should you care? Now to explain the first half: What’s a "work for hire"?

The rule of copyright says that you own what you create. Work for hire is a lonely exception to that rule. If you create a work for hire, your employer owns the copyright for that work from the moment it comes into being.

That’s significant if you—as an individual, a university, or a business entity—create something you want to own or at least co-own and it turns out that you don’t. Less obvious is the effect of copyright law when you’re the originator of a concept—such as for a video or a textbook—that someone else (or a team) helps you develop or produce, and you expect to own the finished product. Then, unless the product is a work for hire for you, you may have unwanted co-owners. You may even have no copyright interest at all.

Knowing when you’re creating a work for hire (for which your employer will own the copyright) or having one made for you (for which you will own all or part of the copyright) is something every employer and creative professional working with or on behalf of others should care about. Under copyright law, works for hire come about in one of two ways: either they’re prepared by "regular" employees within the scope of their employment or they are created by independent contractors if a pair of conditions are met.

Who’s a regular employee? The law considers about a dozen mostly predictable factors to distinguish a regular employment relationship from that of an independent contractor. Those factors include: whether employee benefits are provided to the employee; whether the hiring party controls the "manner and means" of the hired party’s work; whether a specialized skill by the employee is required; whether the work is performed on the employer’s premises using its equipment; the duration of the relationship; whether the employer can assign additional projects; the extent of the employee’s discretion over when and how long he works; whether the hired party hires and pays his own assistants; and whether the work is part of the employer’s business.

For example, a full-time professor—who teaches in her university’s classrooms, submits her courses for approval, sees Social Security and Medicare payment deductions on her paycheck stubs, and receives health benefits—is undoubtedly an employee for copyright purposes. Her institution holds the copyright to works she has prepared within the scope of her job, and that scope could include everything she creates on the campus and potentially what she creates beyond regular working hours, too.

No written agreement is required for the creative work of a regular employee to be deemed a work for hire in which the employer owns the copyright. Nevertheless, having a written agreement usually makes sense for both sides.

From the employee’s perspective, the "scope of employment" can be defined so that whatever the employee creates on her own time outside that scope clearly belongs to her.

From an employer’s perspective, there’s another good reason for a written agreement: The line between a regular employee and an independent contractor is not a bright one, and the creative work of an independent contractor gets very different treatment under copyright law. Moreover, independent-contractor status is the fallback: It applies to everyone who does not meet the criteria to be a regular employee. That distinction can get fuzzy when the variables don’t line up all on one side. For example, what’s the status of someone with a specialized skill who works part time on the employer’s premises, and doesn’t get benefits? At the very least, the answer isn’t obvious.

When does an independent contractor’s effort get work-for-hire treatment—meaning the copyright goes not to the creator but to the employer?

Unlike the work of regular employees, two conditions must be met for the employer to control the copyright. First, an independent contractor’s work must fall into one of nine categories specified in the Copyright Act. (Those categories include not only audiovisual works but also contributions to collective works, like many textbooks; translations; and compilations.) Second, there must be a written agreement signed by both parties that makes the independent contractor’s efforts a work made for hire. If both conditions are not met, the creation is not a work for hire and the copyright belongs to the creator, not the employer.

The upshot of all this: If you’re an institutional employer, or if you’re a professor hiring someone to do work for you, and you want to be sure to own the copyright of a work made for hire, you must have a contract. The contract should be signed by both parties and acknowledge the work-for-hire status. The agreement should also provide, as a fallback, that if the creator’s work for any reason turns out not to be a work for hire, then the copyright is still assigned to you, the employer. That fallback provision is particularly important when the work doesn’t clearly fall into one of those nine categories.

And if you’re an employee of the regular sort, be aware that everything you create within the scope of your employment (however that’s defined) won’t belong to you in the absence of an agreement that gives you a copyright interest. In the absence of a written contract, you won’t be a sole owner or a co-owner of your work; you’ll own no part of it.

And if you’re an independent contractor, you’ll own everything copyrightable that you create, and perhaps co-own the combined product of your work and others’ work—unless your contribution falls into one of those nine categories and you and your employer sign a work-for-hire agreement. That assumes, however, that you don’t assign your rights to your employer in writing, in which case your employer will own the copyright anyway.

Many institutions have policies on intellectual property that allow faculty members to own the copyright of their articles, books, and syllabi, even when that work is created within the scope of a professor’s employment. But policies that apply to texts don’t necessarily apply to video. Professors can usually write a book or article on their own but they can’t produce a MOOC or even a video supplementing a course by themselves. That complicates the ownership issue, not only in the sense of "who is the author (or authors) after all?," but also in the likely expectations of a university that invests equipment, facilities, and cash, not to mention employee time, and may well intend to brand the product with the university’s name, offer it exclusively, and continue offering it long after any particular professor has moved on.

Returning to those opening scenarios: A university that intends to own a MOOC produced by a professor is best advised to enter into a contract making the MOOC a work for hire for the university because if the professor is not acting within the scope of his employment, he could own part or all of the finished product. A professor who intends to own the copyright in an animation made with students’ help should have a work-for-hire agreement with them, or else face the possibility that ownership will be shared with the students. A professor who writes and puts together a course video and intends to own it should have an agreement with both the university that employs him and the company that produces the video, assigning him the copyright.

Although copyright law dictates when works for hire come into being, a contract can have the last word about who owns what.

Neil J. Rosini is a partner at the law firm of Franklin, Weinrib, Rudell & Vassallo, in New York. His practice focuses on copyright and other forms of intellectual property.