Expert Commentary

The Question of Work for Hire: "I Paid for It. Why Isn’t It Mine?"

The "work for hire" doctrine is one of the most confusing subjects facing many employers. It is very important that employers clear up copyright issues at the outset—before the work is performed. Assignments, copyrights, and independent contractors all have to be handled delicately, and in writing.


Intellectual Property
March 2003

One of the most commonly misunderstood subjects that confuses my clients on a regular basis involves copyright law, and in particular the “work for hire” doctrine. Imagine yourself as an executive of a company who hires an independent contractor to perform some work for your company. The independent contractor can be anyone:

  • An architect who is preparing architectural plans for a new restaurant or building for your company
  • A software engineer hired to create software for your company or to do programming for maintenance of your company’s existing software
  • An artist who is commissioned to create a painting for display in the atrium of the company offices

In all of those instances you, the company owner or executive, will pay for the work performed by the independent contractor. Now it would be logical to assume that since you paid for it, you own the work and, therefore, could do anything you like with it, i.e., modify it, copy it, build multiple buildings from it or anything else that you would like. Unfortunately, that is not the law.

Copyright of Derivative Works

The copyright statute, 17 U.S.C. § 101 et seq., is very clear that it is the author of the work who owns all the copyrights in it. As such, the author has the sole ability to make copies, modifications, and changes to the work. These latter works are commonly referred to as derivative works under the copyright statute. For example, if you hire an architect to design a two-story, three-bedroom, two-bath house and then you decide that you would like to change the elevations and the floor plan, the architect (or copyright author) is the only one who can do so, because he owns the copyright in the original work and, thus, owns the right to make all of the derivative works.

A similar analogy is that of the author of a book. The book itself is one work. The screenplay for a movie based on that book is a derivative work of the book. The movie made from the screenplay is yet another derivative work. And, importantly, it is the original book author who has the sole and exclusive right to prepare all of these derivative works.

Assigning Copyright

So what the company purchased is the one and only one copy of that original work unless the company has an agreement in writing with the independent contractor that assigns all of the copyrights to that particular work to the company. Note that calling something a “work for hire” may not necessarily provide you all the protection you need. Only certain kinds of work actually qualify as a “work for hire” under the copyright statute. For example, it is a common misconception that software qualifies as a work for hire. It is not, however, one of the enumerated categories of works that qualifies as a work for hire in the copyright statute.

Handling Independent Contractors

How does a company protect itself in the case of an independent contractor? It is very simple. Any independent contractor agreement should state (1) that it is a “work for hire” and (2) also have an assignment of the copyrights in the work to the company.

Note that this type of agreement must be in writing. While there are some limited exceptions in which an oral agreement for a work for hire has been held to be enforceable by a court, these are rare and very fact-specific. Thus, as with many things in the legal profession, it’s always safer to have it in writing.

The good news for employers, however, is that any work performed by an employee of a company automatically qualifies as a work for hire. Thus, if the author of your software program or the architect who designed your buildings is an employee of your company, then the copyrights in those works belong to the company.

Getting Assignments after Work Completion

The next question I frequently get asked by my clients is, “Well, I’ve already had this work done and I didn’t get a work for hire agreement signed or an assignment of the copyrights. What can I do?” The answer is very straightforward. Go back to the independent contractor and have him/her execute a “work for hire” and assignment agreement with you. It has been my experience that under the circumstances where there is an ongoing relationship between the independent contractor and the company, most people will sign such agreements.

On the other hand, if there is no ongoing relationship, or if there has been a termination of that relationship, then your task becomes much more daunting and difficult. Unless you can prove under the circumstances that the work was always intended to be a work for hire and the independent contractor is willing to agree with you, you will have no rights to the underlying copyrights in those works and thus will have to try and design around the underlying copyrights or find some other means of accomplishing your goal.

Conclusion

So if the old adage in real estate is “location, location, location,” then the adage under a “work for hire” is “get it in writing, in writing, in writing.”


Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

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