Works for Hire and Copyrights
When a person pays someone to create a work, the rights obtained depend upon the relationship of the parties. If the creator of the work is an independent contractor, then he or she retains the copyright and the buyer only gets limited rights to the work. If the relationship is one of a work-made-for-hire, the buyer owns the copyright and all rights to the work.
The type of relationship that exists between a buyer and creator depends upon the terms of the agreement between them. Unfortunately, such agreements are not always put in writing so there is often disagreement as to who owns the rights to a work. Many of these disagreements have gone to court and different courts have given different answers as to who should own the copyright.
In 1989, the United States Supreme Court decided a case that answered many questions.
An artist who created a work and an organization that commissioned and paid for the work both filed claims for a copyright on the work. The court ruled that one should look to common law agency principles to decide if a person is an employee or an independent contractor.
This means that if the person paying for the work controls such things as how the work is created, when the artist works, where the work is done, and other things that employers typically control, then the artist is considered to be an employee and the work is considered to have been done within the scope of their employment. Under such circumstances, the work is considered to be a work for hire and the employer is the initial owner of the copyright. However, if the creator of the work works independently with little supervision or control, then he or she is an independent contractor and the owner of the copyright.
These are the same factors that one looks for in determining if a person is an employee or an independent contractor for tax withholding and Social Security purposes.
If you are the creator of works such as articles or artwork, then it is in your interest to work as an independent contractor. This way you own the copyright and the purchaser only obtains the rights for which he or she purchased the work. For example, if you provided work for a book cover, the publisher paying you would normally only obtain the rights to the artwork for that book cover (unless a written agreement stated otherwise). If the publisher later wanted to use the artwork to make postcards or mugs, it would have to pay you additional for those rights. Also, you would be able to sell the original and copies of the work to others.
Works made-for-hire are a category of copyrighted works in which the person paying for the work obtains all rights under the copyright. If you are purchasing artwork, written works, or other copyrightable materials from creators, it is in your interest to make your relationships with such people work-for-hire relationships. This way you obtain all rights and do not have to pay again for the same work if you want to use it for other purposes. As explained above, if you commission artwork for a book cover, you would not be able to use it on other products unless you pay the artist again for it.
There are nine types of works that are specifically allowed to be works made-for hire even if created by nonemployees. These are:
- contributions to collective works such as newspapers and magazines
- supplementary works such as forewords, illustrations, and indexes
- instructional manuals
- answers for tests
- parts of audiovisual works such as motion pictures
The only way for other types of works to be considered works made-for-hire is if the author or artist is considered an employee. One important consideration in whether a person is an employee is whether the hiring party has the right to control the location, hours, materials, and methods used by the creator of the work. Other factors that have been taken into consideration are whether the person is given employee benefits and whether Social Security or taxes have been withheld.