This article has been written by Shivani Mane, pursuing a Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho.
Authorship is central to the protection of copyright work as it identifies who is allowed to claim the rights granted in relation to that work. Copyright law has laid down that certain works of authorship created for hire belong to the hiring, and not to the creating person (the hired). Presently, the 17 U.S. Code § 201 deals with the ownership of copyright. According to the statute, ownership of works made for hire is considered as follows:
“(b)Works Made for Hire.—
In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.”
Thus, the employer – and not the employee – is considered to be the legal author. This is also known as corporate authorship.
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The emergence of the work for hire doctrine
In the 19th century, the employee authors’ rights garnered significant respect from courts. From the U.S. Supreme Court’s decision in Wheaton v. Peters till 1860, there was a consensus in determining that by default, the owner of the copyright was the employee who produced the work, even in the scope of their employment. The recognition of employer ownership started around 1860.
The default rule in the first decade of the 20th century allowed the employer’s entitlement to their employees’ creative works. This was subject to an express agreement to the contrary mutually made between the employer and the employee. This time witnessed a rise of corporations due to rapid industrialisation. This brought the intellectual output generated by employees under the control of the employer, which in turn allowed for the creation of “author” who in this case, became the corporation employing the person generating the work. The development of the work-for-hire doctrine in the backdrop of this scenario was thus inevitable.
In the cases Boucicault v. Fox and Wheaton v. Peters – neither Boucicault nor Wheaton were servants and hence the facts of these cases made it logically possible to disregard the old master-servant doctrine which placed ownership of a servant’s work in the hands of the master and instead create a rule of employee authorship.
However, in Keene v. Wheatley, the court found it suitable to create a new equitable principle of employer ownership. This was done as copyright rules were not in place during that time period. Congress brought about the 1909 Copyright Act and made the notion of corporate authorship less fictional, more in tune with the prevailing demands of the conditions back then. The rule of “work-made-for-hire” thus, first developed in the courts and was later codified in the 1909 Copyright Act.
In 1976, Congress overhauled the existing statute and modernised the American copyright law. In this act, the author of a work made for hire is deemed to be the employer. Additionally, the Act described a “work made for hire” as “a work prepared by an employee within the scope of his or her employment.” However, it did not define the term “employee”.
It was then left to the reasoning of courts to determine the definition of the term employee and whether an independent contractor would be treated as an employee under the new Act as it was done previously under the 1909 Act. The first circuit to interpret the new work-for-hire provisions was the United States Court of Appeals for the Second Circuit. It held that the 1976 Act changed the doctrine only slightly. It opined that if an independent contractor is under close supervision by the hiring party, then such a person would be termed as an “employee” within the meaning of the new Act.
Interpretation of the term “employee” through various case laws
The interpretation of the term “employee” has seen several different interpretations and emergence of tests for the same::
- The Right to Direct and Control Test – Little significance is attached to whether the creator works as an independent contractor or as a formal employee. It instead gives importance on whether the hiring party had the right to direct and control a work irrespective of actual exercise of the right. If satisfied, the creator qualifies as an “employee” under section 101(1). This test was applied in Town of Clarkstown v. Reeder.
- The Agency Law Test – The Fifth Circuit adopted this test in Easter Seal Socy. for Crippled Children & Adults, Inc. v. Playboy Enters. The test applies principles of agency law to determine if the relationship between the hired and hiring party is that of employment. Courts must consider a list of factors to arrive at some sense of whether the hired party is an agent and therefore a statutory employee of the hiring party.
- The Actual Direct and Control Test – Applying the actual direct and control test, if the commissioning party actually supervises and controls the creation of the work – in contrast to merely retaining the right to direct and control the work – the resulting work is considered a work for hire. The Second Circuit developed this test in Aldon Accessories Ltd v. Speigel, Inc.
- The Formal, Salaried Employee Test – It adopts the narrowest definition of the term “employee”. The traditional sense of the term employee which includes regular payment of wages, withholding of taxes etc was adopted to interpret its meaning. Only the Ninth Circuit endorsed it at the appellate level. In Dumas v. Gommerman, the court used the test to resolve a dispute over copyright ownership in a series of lithographs.
In 1989, in Community for Creative Non-Violence v. Reid, it was held by the United States Court of Appeals for the District of Columbia Circuit that the 1976 Act radically changed the work-for-hire doctrine. It made a literal interpretation that an independent contractor should never be an “employee” under copyright law. The Supreme Court identified certain factors that characterise an “employer-employee” relationship as defined by agency law:
- Control by the employer over the work.
- Control by employer over the employee.
- Status and conduct of employer.
- The work created by an independent contractor/ freelancer is allowed to be considered as a work for hire only if ALL the below conditions are met:
The work must come within the limited categories of works, namely, a contribution to a collective work:
- A part of a motion picture or other audiovisual work,
- A translation,
- A supplementary work,
- A compilation,
- An instructional text,
- A test,
- Answer material for a test,
- An atlas.
- The work must be specially ordered or commissioned.
- There must be a written agreement between the parties specifying that the work is a work made for hire by use of the phrase “work for hire” or “work made for hire”.
Evolution of the doctrine post-Reid case
The cases which have followed Reid, outline additional important factors or provide emphasis to a few “universal” ones. In Marco v. Accent Publishing Company, it was held that a freelance photographer was an independent contractor. The court added important factors to take into consideration, i.e., “hired party’s occupation,” “local custom,” and “actual control over the details of the work.’
The court recognised that Reid did not say considering “actual control” was erroneous, but merely that it was not necessary for the determination of an employment relationship. In 1992, another significant case followed the Reid case and held that the plaintiff who was a computer programmer was indeed an independent contractor. This case was called Aymes v. Bonelli, and held that the Reid case factors must not be simply tallied but careful consideration must be given to their importance based on their significance in the case. It held that the hiring party’s right to control the manner and means of creation, the skill required, the provision of employee benefits, the tax treatment of the hired party and whether the hiring party has the right to assign additional projects to the hired party were important considerations to bear in mind.
The Reid case did resolve some ambiguities of law pertaining to “work made for hire”. However, one also needs to take into consideration the true creative inputs of the creator and the commissioning party and accordingly come up with an amicable solution, which in such situations could be the possibility of joint ownership. The closer an employment relationship comes to regular, salaried employment, the more likely it is that a work created within the scope of that employment will be a work made for hire. If a work is made for hire, the employer or other person for whom the work was prepared is the author and should be named as the author on the application for copyright registration while filing for registration with the US Copyright Office.
In conclusion, all intended transfers, uses, assignments, or licenses should be spelled out expressly in the contract governing the relationship between the creator and the commissioning party in order to prevent uncertainty and post-creation litigation determining ownership.
- US Copyright Office, Circular 9: Work-Made-For-Hire Under the 1976 Copyright Act
- 17 U.S.C. § 101(1) (1988)
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