COPYRIGHT: WORKS FOR HIRE

As we’ve discussed, generally, if you create a work and it's fixed in a tangible form, you are entitled to copyright protection. But what if you’ve created something as an employee of a company? Or what if you were commissioned to make something for someone else? Who owns the copyright? It gets a little more complicated, especially if you work in the creation of software. Let's learn more about Works Made for Hire, shall we?

There are two different types of Works Made for Hire:

1. Works prepared by employees within the scope of their employment, and
2. Certain works prepared by non-employees that are specially ordered or commissioned
   
   

So for the first type, this doctrine says that if you create something for an employer under the scope of your employment, that work belongs to your employer, not you. Basically, you get the compensation the hiring party gives you, such as a salary, and they get the copyright.

So the first thing the court will need to decide in the event of a dispute is whether or not you're an employee of the company. To do this they will weigh a bunch of different factors like:

• Does the "employer" have the power to control the means under which your work is created?
  
• Do they provide the tools required to complete the work?
• How are you classified in your employment contract?

If they decide you are an employee of the company, they will then have to determine whether the work you did was within the scope of your employment. Again, they'll look to different factors to decide:

• Is the work of the kind the employee was employed to perform?
• Does it occur primarily within work hours and at the workplace?
• Is it performed, at least in part, to serve the employer?

After weighing these factors, if you're found to be an employee of the company AND the work you created was within the scope of your employment, it was indeed a work for hire and you do not own the copyright to that work.

Now let’s look at the second situation, where you’re commissioned to create a work for someone. In this case, the work can ONLY be a work for hire if:

1. Both parties sign a work for hire agreement, and
2. The work is one of the 9 types of work specified:

• Contribution to a collective work like a magazine,
• Part of a motion picture or audio visual work
• A translation
• Supplementary works like forewords, maps, charts, etc.
• A compilation
• An instructional text
• A test
• Answer material for a test
• An atlas

Notice that the list of categories does not include “literary works”. This is important because under copyright law, computer software is generally considered a literary work, which is entitled to copyright protection.

So here's a potential problem. If someone is developing software for you, you could end up in a situation where you pay them to create that software but since it's not one of the 9 listed categories, it could be found not to be a work for hire after all, in which case they could end up owning the copyright, not you!

Why is this bad? Let’s say the software creator ends up holding the copyright. That means they can do whatever they want with those rights, including licensing or selling them. And that doesn’t exclude licensing or selling to one of your director competitors! 

So it’s especially crucial in a software creation situation that you have any independent contractors sign a contract stating that they will assign the rights to any works they produce during their service and the copyrights related thereto. In practice, you’ll generally see a provision like this in any Independent Contractor contract because employers want to cover their bases no matter what ends up happening.

This post touches upon some important distinctions between employees and independent contractors. We have some upcoming posts that will dive deeper into considerations for independent contractors, so be sure to stay tuned for that!