Lots of creative professionals have clients who ask them to sign “work for hire” agreements that presumably transfer all rights under copyright law to the client. This request does seem to provoke anxiety, and I imagine that much of the anxiety comes because it is not always clear what a work for hire agreement is and does. I hope to clarify things by looking more closely at the purpose and value of a work for hire agreement.
Author’s note: This was originally written as one long article, so that is why it will be introduced in three parts. Hopefully that aids in understanding the idea of work for hire and when and how it would be relevant to a working designer.
Authorship forms the core of copyright law and there are a few different kinds of authors (an “author” is a legal term of art under copyright law – it means anyone who creates something protectable under the copyright law). There is the sole author working away alone on a masterpiece. And there is the group of people who get together to make something new or a group of people who get together in a corporation to make something bigger, perhaps. Authors, all of these.
However, only one of these authors needs a special way to become an author. Flesh-and-blood legal entities – in other words, people – can pretty much always be authors. When you write something, draw something or sculpt something, you typically legally become the author as soon as you put it down. Do it with a group of people and everyone who contributed is a joint author. But with corporations, the situation was different. Corporations could not physically hold a pencil nor compose a symphony, yet for various reasons the law wishes to extend to them the benefits of authorship.
The US Copyright Act defines a “work made for hire” as roughly one of two things: (1) a work made by an employee in the course of his or her employment; or (2) certain types of specially commissioned works made by non-employees. Those are the only two things that can be a work made for hire. And if something is a work made for hire, then the “author” of that work would be the person or entity making the hire.
The first kind of work made for hire can be understood relatively easily. If a company or agency hires someone as an employee, then the company wants to be sure it owns everything done on company time. It would be an administrative headache to keep track of who owns what part of what project over a period of hopefully many years. It would be hard to avoid disputes and messy disentanglements if the ownership of every contribution could be brought into question. Making the corporation the author takes some of this away.
But in reality, not all creative work happens in-house at a company or as part of an agency. Much of it takes place through a network of independent contractors and subcontractors who are all authors of the pieces that they are creating independently. As soon as they make something, they have rights under the copyright laws. So how to get all of those rights into one place?
Intellectual property behaves much like non-intellectual property in that it can be sold to another person. You and I could sign a contract together that would give you all of my rights in this article under copyright law. That’s an assignment. I could also sign over some of my rights or certain rights under certain conditions using various forms of licensing. So a company could get an assignment of all of the different rights of all the different authors and pretty much be in the clear.
But actually, that would not be enough in some situations. There are some situations where just being assigned the rights would cause a problem years down the road. That’s because under the current US Copyright Act, authors – the actual authors and not the person that they may have assigned or licensed their rights to – can terminate any license or agreement relating to their copyrighted works. The author just needs to send a certain type of letter to the person who now has the rights and the rights revert back to them. But the author has to wait 35 years to do that.
So essentially, that is what is at stake under the work for hire part of the copyright law: the option to take back your rights after 35 years. You can assign every right to your copyrighted works to someone else, except for that one. The reason for this exception was that Congress agreed to a compromise that recognized that corporations and deep-pocketed individuals tended to have an advantage in bargaining power over a new artist and could use that advantage to get the new artist to sign over everything for relatively small sums. The termination right allows the creator to get their rights back if they made a bad deal, long ago.
Continue to Part II of my three-part series on work for hire agreements.
Read Part III of this article, for the exciting conclusion!
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None of the above is meant to be legal advice, nor is it an offer to become your attorney. If you have a real legal issue, find and engage a lawyer in your jurisdiction.
