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Copyright Ownership: The Work Made For Hire Doctrine I

This article, Copyright Ownership: The Work Made For Hire Doctrine, will be in two parts: Part I briefly explains the importance of copyright ownership, and the scope and importance of the "work made for hire" doctrine while Part II will provide you with practical guidelines to help ensure that you satisfactorily meet all the requirements of the "work made for hire" doctrine.

A book publishing organization's most valuable assets are the books it publishes and the rights it acquires for each specific title. Copyright ownership is the most important of these rights because it provides the publisher with the full bundle of "exclusive rights" that are enumerated in the Copyright Act. These exclusive rights are the right to (1) reproduce the work, (2) prepare derivative works, (3) distribute the work, (4) perform the work, and (5) display the work.

Copyright "vests initially in the author or authors of the book." This means that if the book is created by an individual that the individual is the author of the book and the copyright owner. This, however, does not always mean that the author owns the copyright in the book. If an individual is an employee of a publishing company working within the scope of their employment or is a commissioned author then the publisher could be the copyright owner of the book. Copyright ownership can also shift from the author to the publisher because the copyright is treated as property under the law and like other types of property items it may be transferred by the author to other parties; such as through the publishing contract between the author and publisher.

The Copyright Act's "work made for hire" doctrine is the major exception to the fundamental principle that copyright ownership vests initially in the individual who creates the work. If the work is a "work made for hire" the publisher under copyright law will be considered both the author and copyright owner of the work. The significance of copyright ownership is that, as the copyright owner of the work, the publisher will own all exclusive rights in the work and therefore is able to commercialize the book publishing property to its fullest extent; publishing and distributing the work in print and other formats, creating derivative works, or by licensing or transferring the rights owned by the publisher to third parties. The publisher should also remember that the "work made for hire" doctrine pertains to much more than the just the "written word." This doctrine also applies to any other type of copyrightable work in the book publishing process including illustrations, photographs, and book cover designs.

The Copyright Act's "work made for hire" definition is two-pronged and provides that a work will be "for hire" if it falls within one of the following two categories. (1) The work will be a "work made for hire" if it is prepared by an employee of an employer (publisher) working within the scope of their employment. If this situation exists, copyright ownership belongs to the publisher unless an employment contract stipulates that the creation of copyrightable material is not within the scope of employment. If the creation of the work falls outside the scope of employment the employee, and not the publisher, would have copyright ownership of the work. (2) It is also a "work made for hire" if a freelancer (independent contractor) and the publisher (employer) agree in writing that the work to be created shall be considered a "work made for hire" and if the work was specially ordered or commissioned for use as one of nine categories of work enumerated in the Copyright Act: contribution to a collective work, translation, supplementary work, compilation, instructional text, test, answer material for a test, atlas, or part of a motion picture or audiovisual work. In this situation the publisher would own the copyright. If, however, the requirements are not strictly followed, the freelancer, and not the publisher, would have copyright ownership of the work.

For many years the question of whether a specific work was a "work made for hire" was a source of great confusion to the courts as judicial decisions generally focused upon the "manner and means" by which the hired party developed the creative work. In 1989 the United States Supreme Court resolved much of the confusion surrounding the issue of who was an "employee" and who was an "independent contractor." The Court concluded that "common law agency principles" must be used to determine whether the work was prepared by an employee or an independent contractor. The Court enumerated the following factors that are instrumental in determining whether a hired party qualifies as an employee or is instead an independent contractor: (1) the hiring party's right to control how the work was accomplished, (2) the skill required, (3) who provided the materials and tools, (4) where the work was performed, (5) length of relationship between the parties, (6) whether or not the hiring party could assign additional projects to the hired party, (7) extent of hired party's discretion over when and how long to work, (8) method of payment, (9) who hired and paid assistants for the project, (10) whether the work was part of the hired party's regular business, (11) whether the hiring party is in business, (12) did the hiring party pay employee benefits, and (13) the tax treatment of the hired party. Although the Court went on to say that these factors were not an exhaustive list they also noted that no single factor was determinative of whether or not a hired party would be considered an employee under the first prong of the "work made for hire" definition. The significance of this Supreme Court decision was its conclusion that the two prongs of the "work made for hire doctrine" were mutually exclusive. Furthermore this decision restricted the "work made for hire" doctrine under the first prong to "actual" employees while the second prong was held to be only applicable to independent contractors.

Because of the importance of copyright ownership, this Supreme Court decision and subsequent judicial decisions regarding the "work made for hire" doctrine requires publishers to always ask themselves the following questions with respect to the "work made for hire" doctrine before commencing upon a publishing project.

1. Is the hired party an "employee" under the first prong or an "independent contractor"?

2. If the hired party is an "employee" will the publisher own the copyrights for all copyrightable works created by the employee?

3. If the hired party is an "independent contractor" has the publisher met all the requirements of the second prong to ensure that the publisher will have copyright ownership of the work?

In Part II of this article I will explore the above questions and provide publishers with some examples and guidelines that should help to ensure that you will have copyright ownership of those works that are meant to be "works made for hire."

This article is not legal advice. You should consult an attorney if you have legal questions that relate to specific publishing issues and projects.

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