What Is the Stance of US Law on Works Made For Hire?

Who Owns Creators’ Works?

Spiderman, Ironman, Thor etc. are household names and the comics and movies are still a huge part of our lives. But while the studio names associated with these characters (Marvel, DC or Disney) are famous, the original creators of these works are relatively less known to us and in many cases did not get the due recognition they deserve.

Jack Kirby, Stan Lee, Steve Ditko are major innovators and most influential creators in the comic book medium. In the early days of comic books, the relationship between creators and publishers was often exploitative. The people responsible for creating the heroes that would make publishers millions. Meanwhile freelancers, working from home, never made a regular salary outside of their normal page rates and often struggled to get back their due credit. The doctrine of ‘Work for Hire’ used in the Copyright Act 1976 in US has been inconsistent and very diverse and was one of the main contentions in the case of Kirby v Marvel.

What Do We Mean By Work for Hire?

Copyright law assumes that the author of a work is the copyright owner. A “work made for hire” is a copyrighted work in which the employer or another person for whom the work was prepared is considered the author for purposes of the Copyright Act. Unless the parties have expressly agreed to do otherwise in a written instrument signed by them, this employer owns all of the rights comprised in the copyright. If a copyrighted work is a work for hire, then the initial ownership vests in the employer and the employee or contractor enjoys none of the legal or beneficial attributes of authorship.  

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.”

The word “employee” is not defined in the 1976 Act and caused some confusion. Judicial interpretations ranged from ‘formal, salaried employees’, which is pro-artist stance, to commissioned works by hired artist while having the right to supervise, which is a pro-employer stance. The federal court system developed four distinct doctrines defining a work made for hire:

Development of the Doctrine

In common law, it was well established that the employer held the right to copyright for the works of their salaried employee. In case of commissioned works, the creator received accompanying copyright, unless the parties had expressed otherwise and the burden of expressing it in the contract was upon the creator. If there was no contractual provision specifying otherwise, copyright ownership passed to the party who paid for or commissioned the work. Owing to the definitional deficiency of the term ‘work for hire’, four judicial definitions developed in the federal courts.

The 1909 Act codified the common law principle that if there is no contractual provision implied, the copyright belongs to the commissioning party along with the product.  The words ‘work made for hire’ were used in the 1909 Act, which made the employer the ‘author’ and copyright holder of the commissioned work, but was not defined under the act.  

In the case of Scherr v. Universal Match Corp. a copyright infringement action was brought by Scherr and Goodman against a commercial matchbook manufacturing company and the United States government. During their service in army, Scherr and Goodman created a clay model of an infantryman and the extra cost was borne by the army. The Universal Match Company secured consent from the Army to distribute matchbooks with the image of the statue reproduced thereon. When Scherr and Goodman sued the matchbook company, the government intervened as a defendant, denying the plaintiffs’ copyright and alternatively counter-claiming for copyright in case the creators already owned one. The court held that the army owned the copyrights as it was the statutory owner of the work made for hire as it was created at the expense of the Army and they were employees there. In reaching its conclusion, the court stated that:

“The essential factor in determining whether an employee created his work of art within the scope of his employment as part of his employment duties is whether the employer possessed the right to direct and to supervise the manner in which the work was being performed and under whose insistence, expense, time and facilities the work was created.”

In 1976 Act, the Congress tried to describe 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. The subsection (2) of the definition enumerated nine categories under which the commissioned works would be considered as work for hire.

In Aldon Accessories Ltd. v. Spiegel, Inc. Aldon designed and marketed figurines and Ginsberg, who was an employee at Aldon, worked with the artist giving minute instructions and inspecting the work. . Spiegel, after requesting samples from Aldon at a trade show, began selling similar brass figurines. Aldon sued Spiegel for copyright infringement and won a jury verdict at the district court level. The court followed the ‘Actual Control’ test for determining who is an ‘employee’ for purposes of the work made for hire provision; the question being if the artist is independent or controlled and supervised in the creation of the particular work by the employing party.

In Easter Seal Society for Crippled Children and Adults, Inc. v. Playboy Enterprises, a representative of the Easter Seal Society worked with WYES to prepare a videotape and musical jam sessions footage, which was edited and used on multiple occasions later on. There was no mention of copyright ownership in any of the communications. As the film crew did not have the requisite nexus with the Easter Seal Society to be considered its servants or employees under the law of agency, the court determined that the film footage was not a work made for hire, and that the Easter Seal Society had no rights to the footage.

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. Easter Sealis a pivotal case because of its break with the pre-1976 Act decisions, and The Restatement of Agency approach which has some definitional consistency. Parties should not be considered “employees” under copyright law when they are not so considered under tort law

In 1989, in Community for Creative Non-Violence v. Reid, it was held that an independent contractor should never be an employee under copyright law. The Supreme Court identified certain factors that characterize an “employer-employee” relationship as defined by agency law:

However, the aspired level of certainty can be achieved only if the agency law is replaced with the ‘formal, salaried employee’ test which was proposed by the Copyright office and adopted in Dumas v. Gommerman.

The Way Forward

The ambiguities associated with the term ‘work made for hire’ still exist. In order to align with intentions of the congress in the amendments of 1976 Act, commissioned works should be excluded from the definition of work made for hire. Joint authorship must be the solution when both the parties were equally invested and involved in the work, and all transfers should be made in writing. In general, all intended uses, transfers, assignments, or licenses should be expressly mentioned in the contract to prevent both uncertainty and the need for post-creation litigation to determine ownership.

Author: Kochurani James, Legal Intern at PA Legal.

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