What is a Work Made For Hire?

by | Mar 2, 2014 | Copyright Law

Understanding the Work Made for Hire Doctrine in Copyright Law

A work made for hire is a creation protected by copyright law, crafted by an author or creator for another individual or corporate entity. Copyright protection rests in the entity who has commissioned work, not the creator of a work.  The nature of this protection is detailed in 17 U.S.C. Section 101, distinguishing two scenarios:

 

Work for Hire

  • Employee Creation:
      • When an employee contributes to a creative work within the scope of their employment, the resulting creation is automatically protected.
  • Written Agreement Requirement:
      • In cases where the work is not a direct result of employment, a written agreement becomes crucial. This agreement explicitly states the intention for the commissioned work to be considered a work made for hire, outlining the rights and responsibilities of both parties.

Any and all copyrightable works can qualify as a work made for hire.  

If you have any questions about copyright law and works made for hire, please call Verna Law, P.C. at 914-908-6757 or send an e-mail to anthony@vernalaw.com.

Determining Employee or Independent Contractor Status: To enhance a business’s ability to protect its works, it must discern whether the creator is an employee or an independent contractor. The U.S. Supreme Court, in Community for Creative Non-Violence v. Reid, outlined key principles to determine this status:

  • Salary and benefits: Does the actual creator receive a salary or solely payment for the work?
  • Work continuation: Does the engagement persist beyond the project at hand?
  • Control: What level of control does the business exert over the creator of the work?

While these factors provide guidance, a written agreement is essential if the creator is not an employee, ensuring that ownership belongs to the entity funding the created work.

How Can a Business Improve its Ability to Protect its Works?

Businesses need to understand if the person making a work protected by copyright law is an employee or independent contractor.  According to Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989), the United States Supreme Court ruled that “to determine whether a work is a ‘work made for hire’ … [a] court should   first apply general common law of agency principles to ascertain whether the work was prepared by an employee or an independent contractor.”  These are simple principles:

  1. Is a salary paid to the author or is the money only for the work?
  2. Are benefits paid?
  3. Does work continue after the work-at-question is finished?
  4. What other kind of control is made on the author of the work?

Obviously, these are guides and not a hard test.  But if the author is not an employee, a business must have a written agreement that the work is a work made for hire and that ownership of the copyright belongs to the entity paying for the original creation of the work.

There are other concerns in the written agreement, such as the author’s moral rights, that must be discussed and agreed to.  But having a written work-for-hire agreement with any independent contractor creating a work for a business will allow the business to be the owner of the copyright and then use the work in its business and profit from it.  It is always a good idea to draft a written agreement to purposefully state the rights in each party.

 

A work made for hire does not​ define the author as the original owner of the copyright – the original owner of the copyright is the entity funding the work from the very beginning.

 

Derivative works can be created by the copyright owner – regardless if the copyright owner is the original author or the entity that commissioned the work.

 

Lessons from Legal Precedent: Horror Inc. v. Victor Miller 

District court rules that copyright to screenplay for the original “Friday the 13th” film reverted to screenwriter in 2018, holding that screenplay was not work for hire and screenwriter validly terminated his original 1979 grant of rights.

A recent case, Horror Inc. v. Victor Miller, underscores the importance of clear agreements. The court ruled in favor of Miller, emphasizing that a work made for hire status must be expressly agreed upon in writing. Miller’s status as an independent contractor, not an employee, was determined by applying the established principles of the CCNV analysis.

In summary, a well-crafted written agreement, addressing work-for-hire status and other considerations like moral rights, is vital. This ensures businesses own the copyright and can leverage the work for their benefit. The Horror Inc. case serves as a cautionary tale, emphasizing the need for clarity in contractual agreements to avoid disputes over copyright ownership.

Background

In 1979, Victor Miller was hired by Manny Co. to write the screenplay for the horror film Friday the 13th. The film’s success led to numerous sequels and significant earnings for Manny Co. and its successor, Horror Inc. In 2016, Miller served a termination notice under Section 203(a) of the Copyright Act to reclaim the rights to his screenplay. Manny and Horror Inc. filed for a declaratory judgment that the screenplay was a work made for hire, thus precluding Miller from reclaiming the rights. Miller prevailed on summary judgment and on appeal to the Second Circuit Court of Appeals.  The screenplay is a part of a motion picture and audiovisual work, and the copyright in the screenplay can be registered separately from the audiovisual work as a literary work.

Why is an assignment or license, as opposed to securing rights as the author initially, different? Because the Copyright Act allows authors and the authors’ heirs to terminate assignments and licenses after a statutory period of time. 17 U.S.C. Section 203(a)(3) (grant issued by the author on or after Jan. 1, 1978, 35 years after the grant), 304(c)(3) (grant issued by author or heirs before Jan. 1, 1978, 56 years from the date copyright was originally secured, or beginning on Jan. 1, 1978, whichever is later). See Horror, Inc. v. Miller, 335 F.Supp.3d (D. Conn. 2018), aff’d 15 F.4th 232 (2nd Cir. 2021) (writer of a popular horror film (“Friday the 13th”) properly terminated assignment of rights, after having been determined to be an independent contractor and not an employee at the time he wrote the screenplay). A termination right does not exist for works made for hire or in the event of a proper transfer by will. 17 U.S.C. Sections 203, 304(c).

Attorneys’ Fees Motion

Miller moved for attorneys’ fees under Section 505 of the Copyright Act. The district court first determined whether fees could be awarded in a declaratory judgment action under the Copyright Act. Noting that other courts have awarded fees in similar cases, the court concluded that fees are indeed awardable in such actions.

Court’s Analysis of Fee Award

The court applied the multifactor test from Fogerty v. Fantasy (1994) and Kirtsaeng v. John Wiley & Sons (2016) to assess whether to award fees to Miller.

  1. Objective Reasonableness: The court found plaintiffs’ claims were not novel or unsettled but contrary to well-established precedent, making them objectively unreasonable, though not frivolous due to a non-exhaustive agency test under Supreme Court precedent.

  2. Improper Motivation or Bad Faith: The court determined that plaintiffs’ actions aimed to intimidate Miller from exercising his termination rights, reflecting an improper motive, especially given their additional claims for slander of title and violations under the Connecticut Unfair Trade Practices Act.

  3. Compensation and Deterrence: The court found that awarding fees to Miller was consistent with the Copyright Act’s purpose of protecting authors’ termination rights. It would compensate Miller and deter others from making unreasonable claims against authors asserting valid termination rights.

Determination of Award Amount

The court used the lodestar method to determine the reasonable amount of fees, considering the hourly rates for Miller’s attorneys and the time spent on the case. The court found the rates reasonable but reduced the recoverable attorney time by 25% due to excessive hours and non-recoverable work related to an anti-SLAPP motion.

Conclusion

The court awarded Miller $886,564.88 in attorneys’ fees, recognizing the unreasonable nature of plaintiffs’ claims, the improper motivation behind the lawsuit, and the need to uphold the Copyright Act’s purpose.

 

Lessons from Legal Precedent: The Estate of Stanley Kauffmann v. Rochester Institute of Technology

​The case The Estate of Stanley Kauffmann v. Rochester Institute of Technology, 2018 WL 3731445, Docket No. 18-2404 (2d Cir. 2019), dealt with the issue of whether certain works created by Stanley Kauffmann were “works made for hire” under the Copyright Act.

Background

Stanley Kauffmann was a renowned film critic who wrote numerous reviews and articles throughout his career. The Rochester Institute of Technology (RIT) held some of his works and claimed rights over them, arguing that they were created as works made for hire.

Legal Issue

The main legal question was whether Kauffmann’s works were indeed works made for hire, which would grant RIT certain rights over these works. U.S. Copyright Law defines a work made for hire in two scenarios:

  1. A work prepared by an employee within the scope of employment.
  2. A work specially ordered or commissioned for use in certain specified categories, provided there is a written agreement stating it is a work made for hire.

Court’s Analysis

The court analyzed the relationship between Kauffmann and RIT to determine if he was an employee or an independent contractor. The key factors included:

  • The degree of control RIT had over Kauffmann’s work.
  • The nature of Kauffmann’s engagement with RIT.
  • The presence or absence of a written agreement specifying the works as made for hire.

Court’s Decision

The Second Circuit found that Kauffmann was not an employee of RIT but rather had an independent contractor relationship with RIT. The court emphasized that there was no written agreement indicating that Kauffmann’s works were made for hire. Therefore, his works did not qualify as works made for hire under the Copyright Act.

Conclusion

The decision underscored the importance of clear, written agreements in defining the status of works as made for hire. Without such an agreement, the works created by Kauffmann tained their independent copyright status, and his estate retained the rights to those works.

 

Lessons from Legal Precedent: Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989)

Background

The Community for Creative Non-Violence (CCNV), an organization advocating for the homeless, hired artist James Earl Reid to create a sculpture titled “Third World America” to highlight homelessness in the United States. After Reid completed the sculpture, a dispute arose over the copyright ownership. CCNV claimed that the sculpture was a “work made for hire” and thus belonged to them. Reid contended that he retained the copyright as an independent contractor.

Legal Issue

The key legal question was whether Reid’s sculpture was a “work made for hire” under the Copyright Act. Specifically, the court needed to determine whether Reid was an employee of CCNV or an independent contractor when he created the sculpture.

U.S. Supreme Court’s Analysis

The U.S. Supreme Court analyzed the case using common law principles of agency to determine the nature of the work relationship. The Court considered several factors, including:

  • The skill required for the work.
  • The source of the tools and materials.
  • The location of the work.
  • The duration of the relationship between the parties.
  • Whether the hiring party had 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.
  • The provision of employee benefits.
  • The tax treatment of the hired party.

Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; 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. See Restatement [(Second) of Agency] Section 220(2) (setting forth a nonexhaustive list of factors relevant to determining whether a hired party is an employee). No one of these factors is determinative. Reid, 490 U.S. at 751‒52 (footnotes omitted).  Such circumstances determine if the author is an employee or an independent contractor, especially if there is no employment contract.  

Court’s Decision

The U.S. Supreme Court held that Reid was an independent contractor, not an employee of CCNV. The Court found that Reid used his own tools, worked at his own studio, and had control over the manner and means of creating the sculpture. Additionally, there was no written agreement stating that the sculpture was a work made for hire.

Conclusion

The Supreme Court ruled that the sculpture was not a work made for hire and that Reid retained the copyright. This decision clarified the definition of “work made for hire” and established guidelines for determining whether a creator is an employee or an independent contractor under the Copyright Act. The case set an important precedent for copyright ownership and the interpretation of work made for hire.

If you have any questions about copyright law and works made for hire, please call Verna Law, P.C. at 914-908-6757 or send an e-mail to anthony@vernalaw.com.