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Wherefore Thou Art #3
Wallowing in the Mire of “Work Made for Hire”

A basic and perplexing legal issue confronting people who create things for money (and companies that pay them to create) is the “work for hire” doctrine, sometimes also called the “work made for hire” doctrine. This doctrine, which is codified in the federal copyright law, attempts to define who owns the copyrights to a creative work in a situation where the creator is paid to make the creation. It’s application is much more limited than most people think; I’d say 90% of the companies that claim “work-for-hire” while attempting to glom some artist’s work are wrong. And I’m going to tell you why.

Typically, copyrights in a creative work arise and vest in the creator as soon as the work is in “tangible” and “fixed” form (in other words, when the thing’s done). Copyrights are a bundle of rights that may be doled out by the copyright owner one at a time. These rights include the rights to duplicate, distribute, display, or publish the work, and the right to make derivatives, or modified new versions, of the work. A painter, for example, owns all copyrights to a painting when it’s finished. She can sell the painting, and with the painting, the purchaser gets the right to display it. But the painter keeps the rights, for example, to make and sell prints of the painting, or to create another work in a different medium based on the images in the painting.

There are a couple of exceptions to the general rule that the creator owns the copyrights in her own work. One involves creations made by an employee in the course of her employment. Under this doctrine, if the creative work is created by an employee as part of her job, the copyrights vest automatically in the employer. This is fairly straightforward – it’s usually fairly clear who’s an employee and who’s not (are taxes deducted form your paycheck? Do you go somewhere to work, are you supervised, and are your materials and tools provided?) And there’s rarely an issue of what the scope of one’s employment is. Problems, however, do arise once in a while. I had an actor-client by a local children’s theater company. While working on a play with the company, he began hearing songs in his head. At night, at home, and on his own time, he started writing a musical version of the play he was rehearsing during the day. He presented this work to the theater directors (and got the blessing of the play’s original author) and the musical ran to unanimously great reviews. My client quit the company to pursue his newly-discovered ability to write cool musicals. The following year his old company announced that it was going to stage his first musical again. He called his old boss and offered an extremely reasonable licensing fee for the play (this was, after all, a local children’s theater company). The old boss blew him off, telling my client that the work was done while he was an employee of the company. Wrong! My client was hired by the theater company to be an actor, not a composer. And he wrote the musical at home, on his own time and his own dime. End of story.

When the artist is not an employee, but an independent contractor, or someone working pursuant to a commission, things can get dicey. If the work results from any relationship other than that of employer-employee, the copyrights stay with the creator except (1) when the work is a collective work, part of a motion picture, a translation, a compilation of other works, a textbook, a test, an atlas, or a supplementary work (for example, illustrations or a foreword for a book), and (2) if the parties expressly agree in a written and signed document (signed by both parties) that the work shall be considered a work made for hire. Only when both of these qualifications are met do the copyrights in a work belong to someone other than the creator.

These are very specific requirements, and they simply don’t apply to most situations. And the Supreme Court has determined that the requirements should be interpreted strictly, to favor the artist. This has lead to situations in which people (or companies) pay substantial amount of money to have something made, and are very surprised, to say the least, to learn that they don’t own the copyrights to the thing they just had made.

I had a sculptor client who was commissioned to make a large human-form sculpture for some doctors. There was no written agreement (of course!). The piece was displayed in the doctors’ waiting room and was very popular with the doctors’ patients. After several months the doctors decided that the image of the sculpture would make a great logo for their medical practice. The sculptor was shocked to see a primitive line drawing of her exquisite work in a newspaper advertisement for medical services; the doctors were equally surprised to get an angry letter from a lawyer (that would be me) telling them they had absolutely no right to use this copyrighted image in such a way. The ads stopped running. The doctors were upset (“We paid for the damn thing! It was a work for hire! We can’t use it?”). The artist was upset (“I told them they couldn’t do this! I feel like I’ve been raped!”). The lawyer advised his client to tone it down a little, even though she was very, very right. The case illustrates perfectly the tensions in the work-for-hire scenario: the purchasers think they own all the copyrights upon buying the artwork, and the artist seeks to protect the integrity and value of her work—a concept that many purchasers of creative works often fail to appreciate or understand.

The work-for-hire statue is meant to protect creators from abuses. Like much of the copyright law, it can be viewed as tilting significantly in the creator’s favor. This bias recognizes the often-ludicrous imbalance of economic power between the artist and the person or thing paying the artist.

In response to the work-for-hire law, companies and institutions that hire artists have increasingly insisted on written agreements with artists and demand written agreements that side-step the work-for-hire question entirely. These agreements provide that independent contractor artists assign all rights (including copyrights) to the purchaser upon completion and delivery of the work. This assignment of copyrights makes it crystal clear to everyone involved who owns what and can prevent big and expensive problems down the road.

From the artists’ perspective, this new demand for an assignment of all rights is just a grab of something of value, and something that typically wasn’t given up before. For this reason, some creators refuse to make any such blanket assignment of their copyrights unless they receive a significant dollar premium for the additional rights. From the purchaser’s perspective the demand for the assignment of all rights is often just buying flexibility in the use of the work bought, and some insurance that nobody (like the artist) is going to show up one day with a lawsuit. The purchaser is often unwilling to fork over a lot of extra money for these things. One compromise would be for the artist to only assign only certain of the copyrights, those that the purchaser really needs, or entering into a license agreement whereby copyrights are licensed to the purchaser (perhaps on a non-exclusive basis) for a limited and defined period of time.

Work for hire issues typically arise where the creator is a freelancer (i.e. not an employee), and the work is a commissioned contribution to a "collective work" (like an article for a magazine or a chapter to a multi-author book), any type of contribution to a film or video, or a prologue, epilogue or annotation to a pre-existing work. Note that works of these types will be considered a work for hire only when there is a written agreement, signed by both parties, formalizing the work for hire relationship.

In any event, whichever side of the transaction you may be on, it’s the same old song: put it in writing. When faced with a transaction involving a creative work, it is always a good idea to put in writing exactly what is being sold and to describe the expectations of the parties with regard to the future use of the work and ancillary rights that go with it.

© 2002 Paul C. Rapp
This article originally appeared in The Artful Mind, and is intended to provide the reader with an awareness of copyright law and not legal advice.