Unfortunately, in the world of publishing and the acquisition of rights, it is not as easy to simply say, “Well, we’ll just sign a work made for hire agreement and that’s that.” This form of agreement is not always legally appropriate.
In this article, I use the term “publisher” to refer to any party seeking to acquire rights from a creator. The term is not limited however to any particular kind of publisher.
The Copyright law places rather stringent restrictions on when such an agreement is usable and the publisher that attempts to circumvent those restrictions may find that its rights are subject to being declared invalid.
The statute states:
Under (1) above, the creator must be an actual employee at the time the work was created. Attempting to superimpose upon an independent contractor the category of employee for the purposes of this doctrine runs the risk of invalidating the transfer of rights. Furthermore, the work must have been created within the course and scope of the employment, meaning that it was part of the job duties of the creator to create the work. Merely because an actual employee creates a work that is then acquired by the employer is not sufficient.“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.”
Under (2), a person who is not an employee but an independent contractor can still fall within the work made for hire concept but only within the express examples above, only if it has been specially ordered or commissioned and only if the parties have executed a written agreement declaring a work made for hire contract,. (But see “Playboy and the Work Made for Hire Agreement”)
As indicated, the work must have been “specially ordered or commissioned” by the publisher. This is quite important because it prevents the use of the work made for hire contract to acquire an existing work.
However, because the person signing a work made for hire agreement would end up giving up all rights to his or her work to the acquiring party, this may not be the kind of agreement the creator may wish to execute. There are other choices that may be more beneficial to the creator’s position and less beneficial to the position of the publisher. Since that which makes up a copyright is essentially a bundle of rights, these other agreements involve the creator licensing various rights to the work but retaining all other rights. In other words, if the creator is not an actual employee, the independent contractor status allows for flexibility in what sort of deal is created between the parties. Even if the category of deal technically fits into the (2) section of the work made for hire rules, it does not mean that either party must sign such an agreement. Narrowly constructed licenses to use certain rights in certain media for certain periods of time are also available to those parties. It is an open negotiation and should be approached as such. This issue is an important factor in determining the intention of the parties. (Read “Playboy and the Work Made for Hire Agreement”)
Thus if you intend to use this work made for hire contract you must be careful in its approach.
It is not always an option.
Note: Under California law, a party transferring rights a work made for hire agreement is an employee for purposes of workers compensation and unemployment insurance and thus there are a wide variety of issues related to those said matters including but not limited to the need on the part of the engaging party to have workers compensation insurance covering that party. Failure to have such workers compensation insurance is a crime under California law as well as exposing the engaging party to unlimited liability and substantial fines and penalties. And this is irrespective of whether or not there is any injury. There also may be other situations in which a party transferring rights under a work made for hire agreement is an employee including but not limited to matters related to taxes and other liabilities and whether presented by California laws, federal laws or the laws of other states. However, since this article is only about the intellectual property issues presented by work made for hire agreements, I will not discuss these other issues, situations or matters. It is not clear what the extent of the said California laws are and you may be subject to such laws even if you are not located in California. You should consult with an attorney admitted in California (as I am) about these matters since they can have very serious consequences. Read "The Stupidest Law Ever Enacted."
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