You don’t have to be in the business of creating IP for more than perhaps 20 minutes before you stumble upon the term “work made for hire.” Normally, the copyright in a work is owned by the creator of the work. However, where a work is made for hire, it is not owned by the creator but instead by the hiring party. Despite its ubiquity, the term is often and widely misunderstood and misapplied.
A work made for hire can be either:
(A) a work created by an employee within the scope of the employee’s duties for an employer
(B) a specially ordered or commissioned work created by an independent contractor that falls within the statutory list of eligible works and there is a signed, written agreement that the work is a work made for hire.
If you are an employee and you create a work within the scope of your employment, your employer is the author and therefore owns the copyright in the work (unless there is a written agreement to the contrary signed by both you and your employer). A simple example is that if you are employed by a publisher to create art for comic books, the copyright in the art you create is owned by the publisher. If you are employed by a car dealership to sell cars, the copyright in the art you create for a comic on your own time is owned by you. Sometimes, it is relatively easy to determine if someone is “employed”; they get a regular salary, are on the payroll, have taxes withheld, receive benefits, have the tools of the trade provided to them, the hiring party has the right to control the “manner and means” of production, etc. Other times, there are unique circumstances and the determination of employee status can get factually intensive and subject to legal wrangling.
If you are not an employee, but an independent contractor, your work is a “work made for hire” only if you have a written agreement signed by both parties that explicitly says so. In addition, the work must fit into one of the categories listed in the Copyright Act. One of the categories is a “contribution to a collective work” and the argument that comics qualify as works made for hire have relied on inclusion in this category. Courts have disagreed whether the written, signed agreement must exist prior to the creation of the work or if it can come later to memorialize an earlier oral agreement or understanding. In either case, there must be an agreement first, because otherwise the work could not have been “specially ordered or commissioned.” The best way to avoid a controversy is to have a written, signed agreement in place before work begins.
There are other issues for works made for hire. For example, California labor law requires that a hiring party treat the independent contractor in a work made for hire agreement like an employee, which brings up all sorts of issues regarding taxes, withholding, benefits, etc. (anyone entering into a work made for hire agreement to which California law applies should consult an attorney familiar with California labor law, but that’s beyond the scope of this blog). Another wrinkle is that this entire discussion so far only applies to works created on after January 1, 1978. For works created before then, come back to check out Part 2!