Who Owns Your Intellectual Property: “Work Made For Hire” Explained
Did you know that the independent contractor you hired to create intellectual property on your behalf might be the owner of the intellectual property you paid them to create? Under the United States Copyright Law, the creator of a copyrightable work is automatically deemed to be the author and owner of its copyright. The sole exception is when a work qualifies as “work made for hire.” In this case, the party that hired the creator (that’s you) is deemed to be the author and owner of the copyright instead.
As you can imagine, whether a work qualifies as work made for hire has important and long-lasting implications, including your ability to monetize and license the copyright, enforce or sue for a copyright infringement, and how long the copyright protections last. In this blog, we’ll focus on how work made for hire applies to your independent contractors.
What can be classified as work made for hire?
A work prepared by an independent contractor can only be a work made for hire if these three requirements are met:
Requirement #1: The hiring party specifically ordered or commissioned the work.
When determining whether the hiring party specifically ordered or commissioned the work, we’ll look at whether the creator prepared the work at the hiring party’s “instance” and “expense.”
Work at the Hiring Party’s Instance
When assessing if a creator created work at a hiring party’s instance, the court will look at whether the hiring party induced or motivated the creation of the work or participated in or had a right to participate in the creation of the work. Rest assured that complete control of the work’s creation is unnecessary to satisfy this requirement, but the court will assess whether the hiring party had some degree of supervisory power and control during the creative process.
Work at the Hiring Party’s Expense
When it comes to the hiring party’s expense, there are a few considerations, which are mainly driven by the compensation structure. If the creator paid hourly or based on a flat fee, there would be a strong argument in favor of classifying the work as work made for hire.
However, if the compensation structure is based on royalty payments, it would weigh against a clarification of work made for hire, because instead, it looks as though the creator actually licensed the work.
Another item that’s worth consideration is which party provided the tools, workspace, and other resources used to create the work. If this one makes you nervous because your independent contractors work in their own space and use their own resources, rest assured—while asking who paid for the expenses during the creation process can support the evaluation, it’s really the compensation structure that’s the big one.
Requirement #2: The parties agreed in writing that the work is work made for hire.
The commissioning party (or hiring party) and the creator must sign a WRITTEN agreement stating that the work is work made for hire. Now, there isn’t a specific language that needs to be included. But most of these agreements would expressly include the phrase “work made for hire.” This agreement should also specify who is intended to be the owner of the work.
If you’re wondering if there’s a requirement of when you should have this in writing, know that it can go both ways. Some courts have held that the writing must be executed before the work, but others have also said that it can be executed after the creation of the work. I will, of course, suggest BEFORE every time. However, if you need to retroactively secure your intellectual property rights after, the writing should confirm that there was an expressed or implied agreement before the work was created, meaning the intentions didn’t change, but you were just delaying in formalizing these intentions.
Requirement #3: The work falls into one of the nine specific categories of work.
To qualify as a work made for hire, the work must fall into one of the following categories of work:
Now, if you’re wondering whether your work falls into one of these categories, know that these categories can be a little bit confusing. At times, people have used the written agreement to force the work to fit into one of these categories—and that doesn’t work.
Instead, what you need to include in your written agreement is language stating that “if the work is deemed to not be a work made for hire, the creator of the work agrees to assign the business all of the rights to the protected work.” This assignment provision or “catch-all” is essential to ensure that just because the work doesn’t fall into one of the nine specific categories of work, you’re left without ownership of your intellectual property as you both originally intended.
Duration of your Copyright Protections
Now that we’ve covered how you qualify intellectual property created by an independent contractor as a work made for hire and the catch-all you need in case your work doesn’t technically qualify as a work made for hire in the eyes of the court, I want to briefly discuss the duration of your copyright protection.
You may ask, “how long do copyright protections last?”
Now, you might also wonder, “what is the effect on the duration of copyright?” Within the copyright duration, the owner has exclusive rights to monetize and enforce the copyright of the work.
Your Independent Contractor’s Portfolio & Credit
I’d like to wrap up this blog by discussing the use of the intellectual property in the independent contractor’s portfolio and your responsibility to provide attribution (or crediting) to the independent contractor when you use the intellectual property (you own). I encourage you to do only what makes sense FOR YOU (and based on the underlying use of the intellectual property).
By this, I mean how did you intend to use the intellectual property.
If YOU plan to use the intellectual property, you might have more leniency in deciding whether to allow the independent contractor to include the intellectual property in their portfolio or if it’s practical (or desirable) for you to credit the independent contractor when you use the intellectual property.
Alternatively, if you had the independent contractor create intellectual property on behalf of YOUR CLIENT, it would be inappropriate to flow down the requirement that your client should provide attribution or credit to the independent contractor for their use of their intellectual property, especially if the intellectual property will be combined with other elements to create the final deliverable to the client. Similarly, the client may not be happy to see their intellectual property included in an independent contractor’s portfolio.
When in doubt, say that you “may” provide credit as you see fit and that they can only publish your intellectual property with prior written consent. This gives you the ability to decide on a case by case basis—essentially, this is a “maybe” but not a flat out “no.”
Remember, you can only give away the rights that you’ve secured. So, ensure there’s not too much encumbering those rights when putting together a written agreement with your independent contractors. I hope this blog has inspired you to advocate and understand the ownership of your intellectual property.