Last week we looked at one special type of authorship, joint authorship. This week, we will be examining the other special type of authorship, work for hire. This is one of areas of copyright that I see misused or misstated quite often.
What is a Work For Hire?
Section 101 of the Copyright Act provides two ways that a work can be a work for hire (or work made for hire in the Act’s terminology):
A “work made for hire” is—
(1) a work prepared by an employee within the scope of his or her employment; or
(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.
An Employee Within the Scope of His or Her Employment
Let’s consider the first means – a work created by “an employee within the scope of his or her employment.” For many years, courts developed their own tests specifically for this area of copyright. They focused on whether the hiring party had the right to control or actually controlled aspects of the creation of the work. However, the Supreme Court swept these aside in our primary case for today’s class, CCNV v. Reid (oral arguments).
The Community for Creative Non-Violence, an organization devoted to combatting homelessness, made the decision to commission a sculpture:
Snyder and fellow CCNV members conceived the idea for the nature of the display: a sculpture of a modern Nativity scene in which, in lieu of the traditional Holy Family, the two adult figures and the infant would appear as contemporary homeless people huddled on a streetside steam grate. The family was to be black (most of the homeless in Washington being black); the figures were to be life-sized, and the steam grate would be positioned atop a platform “pedestal,” or base, within which special effects equipment would be enclosed to emit simulated “steam” through the grid to swirl about the figures. They also settled upon a title for the work — “Third World America” — and a legend for the pedestal: “and still there is no room at the inn.”
Snyder, on behalf of CCNV, began to negotiate with a Baltimore-based sculptor, James Earl Reid.
In the course of two telephone calls, Reid agreed to sculpt the three human figures. CCNV agreed to make the steam grate and pedestal for the statue. Reid proposed that the work be cast in bronze, at a total cost of approximately $100,000 and taking six to eight months to complete. Snyder rejected that proposal because CCNV did not have sufficient funds, and because the statue had to be completed by December 12 to be included in the pageant. Reid then suggested, and Snyder agreed, that the sculpture would be made of a material known as “Design Cast 62,” a synthetic substance that could meet CCNV’s monetary and time constraints, could be tinted to resemble bronze, and could withstand the elements. The parties agreed that the project would cost no more than $15,000, not including Reid’s services, which he offered to donate. The parties did not sign a written agreement. Neither party mentioned copyright.
After Reid received an advance of $3,000, he made several sketches of figures in various poses. At Snyder’s request, Reid sent CCNV a sketch of a proposed sculpture showing the family in a creche-like setting: the mother seated, cradling a baby in her lap; the father standing behind her, bending over her shoulder to touch the baby’s foot. Reid testified that Snyder asked for the sketch to use in raising funds for the sculpture. Snyder testified that it was also for his approval. Reid sought a black family to serve as a model for the sculpture. Upon Snyder’s suggestion, Reid visited a family living at CCNV’s Washington shelter, but decided that only their newly born child was a suitable model. While Reid was in Washington, Snyder took him to see homeless people living on the streets. Snyder pointed out that they tended to recline on steam grates, rather than sit or stand, in order to warm their bodies. From that time on, Reid’s sketches contained only reclining figures.
Throughout November and the first two weeks of December, 1985, Reid worked exclusively on the statue, assisted at various times by a dozen different people who were paid with funds provided in installments by CCNV. On a number of occasions, CCNV members visited Reid to check on his progress and to coordinate CCNV’s construction of the base. CCNV rejected Reid’s proposal to use suitcases or shopping bags to hold the family’s personal belongings, insisting instead on a shopping cart. Reid and CCNV members did not discuss copyright ownership on any of these visits.
On December 24, 1985, 12 days after the agreed-upon date, Reid delivered the completed statue to Washington. There it was joined to the steam grate and pedestal prepared by CCNV, and placed on display near the site of the pageant. Snyder paid Reid the final installment of the $15,000. The statue remained on display for a month.
The statue was then returned to the sculptor for minor repairs. At that point, the relationship between the two parties began to sour. CCNV asked for the sculpture to be returned to them so that they could take it on a multi-city tour. Reid refused, claiming that the sculpture had not been made to withstand such a tour. The eventual result was the litigation between the parties that made its way all the way to the Supreme Court.
Reid argued that he owned the copyright in the statue. He sculpted it after all. CCNV argued that they owned the copyright because the sculpture was a work for hire. CCNV could not argue that it was a work for hire under the second definition in 101 because there was no contract and because a sculpture was not one of the specific types of works listed in the second definition that could be converted into a work for hire by a contract. So instead, they argued that Reid had created the sculpture as an employee acting within the scope of his employment.
The Supreme Court rejected CCNV’s claim and in the course of doing so also established the legal rule for making a determination under the first work for hire definition. Previously, lower courts had developed special tests (right to control, actual control) for figuring out when a work was created by “an employee within the scope of his or her employment.” The Supreme Court rejected those tests, holding instead that the determination was made by “using principles of the general common law of agency, [to ascertain] whether the work was prepared by an employee or an independent contractor.”
The Court identified a number of factors a court should consider in making that determination:
In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party’s right to control the manner and means by which the product is accomplished. 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.
The list is non-exhaustive and no single factor is determinative. A court evaluates each factor under the given facts of a particular case and then makes an overall determination of whether the creator is an employee or an independent contractor. (The Restatement cited by the Court actually uses the terminology of “Master” and “Servant” rather than “Employer” and “Employee.” Those are just very old terms, not a reference to a Depeche Mode song.)
After examine each of these factors, the Court determined that Reid was an independent contractor, and that therefore, the sculpture was not a work for hire.*
Because they did not find him to be an employee, the Court did not have to go on to discuss the second half of the definition. If the creator of the work is an employee, the work still has to have been created within the scope of the creator’s employment in order to be considered a work for hire. Consider this, if you work a full-time job unrelated to writing, you are an employee, right? Would you consider everything you write at night and on weekends while employed as a work for hire just because you are an employee? No, you wouldn’t. While you are an employee, you are not writing those works of authorship within the scope of your employment.
The determination under the second half of the first definition (“within the scope of his or her employment”) is also based on general principles of agency law. A work is created within the scope of the employees work if “(a) [the act of creation] is of the kind he is employed to perform; (b) it occurs substantially within the authorized time and space limits; [and] (c) it is actuated, at least in part, by a purpose to serve the [employer].” (Restatement (Second) of Agency, Section 228)
Specially Commissioned Works
Here’s the second way in which a work can be a work for hire (just so you don’t have to scroll ALL the way back up there to re-read it):
(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.
The definition also requires a signed contract, but that signed written instrument can actually come later as long as the initial agreement was for a work for hire arrangement. It also can only be used to create work for hire status for certain specified types of works.
We should immediately notice that merely saying a work will be a work for hire in a contract only works for very limited types of works enumerated in (2). That is contrary to my impression of the common belief among writers and other creatives that a contract can always make something a work for hire. I believe, though it is difficult for me to verify, that this may also be contrary to common practices in the publishing industry. I suspect that there are a lot of contracts out there that specify that a book is a work for hire and that most everyone involved believes those books are works for hire.
But they are probably are not.
Can you imagine a novel written under conditions that would meet the first definition (“employee within scope of his or her employment”)? Almost everyone of the factors would go in favor of the writer being an independent contractor. And novels do not appear to fall under any of enumerated categories of works that fall under the second definition that allows work for hire status to be created by contract.
Now even if that is the case, it does not make a huge difference. I’m also pretty sure a court looking at those contracts would interpret them as a complete transfer of the copyright even though it was an unsuccessful attempt to make the book a work for hire. There is so much built up understanding in the publishing industry about what comes with work for hire status, that a court might be willing to interpret the contract in light of that common understanding.
Additionally, many contracts contain a savings clause that says just that – that in the event a court finds the work not to be a work made for hire, then the contract will act as a complete transfer. The notable difference between a work for hire and a complete transfer is termination rights (see below).
The Result of a Work Being a Work For Hire
Section 201 of the Copyright Act details who owns a copyright. Generally, as provided in 201(a), copyright vests in the author of the work. However, 201(b) specifies that if the work is a work for hire, then the hiring party is considered the author, and thus the copyright vests in the hiring party initially. In other words, a work for hire is not a transfer of copyright rights. Instead, it defines who the author is for copyright purposes.
To understand what that means, let’s compare a book written as a work for hire with a non-work for hire book in which the entire copyright has been transferred away. Any transfer of copyright, including a transfer on the entire copyright for its entire duration, can be terminated unilaterally by the author after a specified period of time (35 years for works created today). You can get it back. If, however, the work is a work for hire, you as the writer are not considered the author; you have no termination rights.
*As an aside, note that this conclusion reached by the Supreme Court did not appear to resolve the dispute. It looks like the parties were arguing about the wrong set of rights the entire time – all the way to the Supreme Court! Recall that what CCNV wanted was to take the physical embodiment of the work of authorship, i.e. the sculpture itself, on tour. That’s not a copyright issue. Who owns the sculpture itself is matter of personal property law. Maybe there was more to the situation not made apparent in the litigation, but if not, it’s a potentially a bit embarrassing for the lawyers involved.
Writer-in-Law 