June 23, 2020

How can an employer protect its interest in an original work of authorship – artistic and creative work such as literature, music (including any accompanying lyrics), dramatic works (including any accompanying music), pantomimes and choreography, motion pictures, audiovisual works, sound recordings, architectural works, or other pictorial, graphic or sculptural works [17 U.S.C. § 102(a)] – that was created for the employer by an employee?  The answer: establish that the work falls within what is called a “Work Made for Hire.”

Initial copyright ownership generally belongs to the “author” – the person who creates the work on the person’s own motivation.  [17 U.S.C. § 201(a).]  However, the result is different when the work was made for an employer.

If the work was created by an employee as part of the employee’s job, the employer is legally its author, and is therefore the owner of the copyright for that work unless the employer and employee expressly agree otherwise in a signed written document.  [17 U.S.C. § 201(b).]

Employers should be aware of the following rules:

A.  The employer will be considered the author of an employee-created work, for copyright purposes, only if the work was prepared by an employee within the scope of employment.  The distinction between employees and independent contractors therefore becomes important. In order to maintain ownership of copyrights, employers should always make it clear and make sure that a hired party is an employee rather than an independent contractor.  A good place to emphasize the employee’s status is in an employee handbook.

B. A work created by an independent contractor can be deemed a “Work Made for Hire” only if all three of the following elements are satisfied:

1.  The work is specially ordered or commissioned.

2. The work is to be used as:

(i) a contribution to a collective work;
(ii) part of a motion picture or other audiovisual work;
(iii) a translation;
(iv) a supplementary work;
(v) a compilation;
(vi) an instructional text;
(vii) a test;
(viii) answer material for a test; or
(ix) an atlas.

3.  The independent contractor expressly agrees in a signed writing that the work will be considered a work made for hire.

17 U.S.C. § 101.]

A note of caution: if you have a signed contract with an independent contractor that uses the term “Work Made for Hire,” this alone is enough for California’s Employment Development Department (EDD) to presume an employer-employee relationship exists between you and the contractor.  [See Cal. Lab. Code § 3351.5(c); Cal. Unemp. Ins. Code §§ 686 and 621(d).]  If you want to avoid this presumption, you may wish to consider the alternative of using an assignment (instead of a contract) for this purpose.  Make sure the assignment does not use the term “Work Made for Hire,” and eliminate any reference to “Work Made for Hire” in your contractor agreements.  If you opt for this alternative, note that an assignment can be terminated by the assignor (i.e., the contractor) after 35 years.  [17 U.S.C. § 203(a)(3).] If the assignor regains the copyright after 35 years, it could disrupt the business if the work is highly valuable or is an integral part of your business.

Get Help from an Experienced Attorney.  It is crucial that an employer consult a knowledgeable attorney to protect its ownership of copyrights.  Further, employers are strongly advised in drafting employee handbooks to be sure to make it clear that the employees are assigning their rights in their creative and artistic work to their employer.  If you have an employee handbook, Eskridge Law can update it to include this provision.  If you do not have an employee handbook, Eskridge Law can prepare one for you.

Need more information?
ESKRIDGE LAW may be contacted by phone (310/303-3951), by fax (310/303-3952) or by email (geskridge@eskridgelaw.net).  Please visit our website at eskridge.hv-dev.com.

This article is based on the law as of the date posted at the top of the article.  This article does not constitute the provision of legal advice, and does not by itself create an attorney-client relationship with Eskridge Law.