business economics

With the help of the Internet, creative people are becoming more entrepreneurial and are serving as their own publicists, marketing teams, record labels, managers, etc. Some are doing this hoping to be discovered by a “major” player in the relevant industry, while others have found that “doing it yourself” is far more lucrative and allows you to retain more of your rights. But, does it really? The reality is, unless you are truly doing it ALL BY YOURSELF, you may not necessarily own the copyright in your works.For example, have you ever hired someone to create a track for, design a website, write an article for your online magazine, or take photographs for your album cover? Or, maybe you’ve done most of the work, but asked someone to write the introduction to the book you plan to self-publish or write the hook to your new song. Sound familiar? This happens all the time. So, here’s the question of the hour: When you hire someone to do creative work for you, do you legally own the work?If you’re like the countless people who have asked me about this issue, you may think that because you paid someone to do the work or because you did most of the work and they only added what you deem to be a trifling portion, that you own the copyright exclusively. But, like George and Ira Gershwin once said, “It Ain’t Necessarily So”. The general rule of copyright is, the person who creates the work, owns the work. But this is not always the case. As with most intellectual property laws, there are exceptions to rules.The Copyright ActThe General Rule
Determining who owns the copyright is very important because it determines who gets to claim ownership of the exclusive rights granted by the Copyright Act of 1976 (“The Act”), and ultimately who will get paid for exploitations of the work.While a detailed discussion of the rights under The Act is beyond the scope of this article, here is quick list of the six exclusive rights that an owner of a copyright has or can authorize another to have under Section 106 of the Act: (1) reproduce the copyrighted work in copies or phonorecords; (2) prepare derivative works based upon the copyrighted work; (3) distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending; (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, perform the copyrighted work publicly; (5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, display the copyrighted work publicly; and (6) in the case of sound recordings, perform the copyrighted work publicly by means of a digital audio transmission.Under The Act, copyright ownership vests initially in the author of the work. In general, the “author” is the person who actually creates the work. Therefore, when a third party such as a web designer, a writer, a producer, or a photographer contribute to your work, under the Act, they may be considered the exclusive copyright owner, or the work may be considered a “joint work,” in which case the third-party might be considered a co-copyright owner and may also have the right to exploit the work.An Exception to the Rule: “Work-Made-for-Hire”Although the general rule is that he who creates the work owns the work, The Act provides certain exceptions, including the “work made for hire” exception (more commonly referred to as a “work for hire”). Under this exception, the employer or the person that hires an independent contractor to create certain works, rather than the employee or the independent contractor himself or herself, is considered the author and owner of the copyright.In order for a work to be deemed a “work for hire” it must meet one of these two criteria: (1) the work must be created by an employee within the scope of employment; or 2) the work must be created by an independent contractor and must fall within one of the nine statutory categories of works. Within these two criteria, there are additional thresholds that must be met in order for the work to be deemed a work for hire.Works Created By An Employee: Work created by an “employee” within the scope of employment is considered a work for hire. While determining who is and who isn’t an “employee” is not always the easiest task, there are certain factors that courts have applied to determine whether an employer-employee relationship exists. These factors include: (1) whether the employer controls how the work is done by the employee; (2) whether the employer controls the employee’s schedule in creating the work; (3) whether the employer is in the business to produce such works; and (4) whether the employer provides the employee with benefits and withholds taxes. If all or some of these factors are met, an employer-employee relationship may exist. Consequently, the employer would be the copyright owner of all the work created by the employee within the scope of employment.Works Created By An Independent Contractor: Work created by an independent contractor who has been hired to create a specially ordered work may also be considered a work for hire. For this category of work to be deemed a work for hire, these conditions must be satisfied: (1) there must be a written agreement between the parties specifying that the work is a work made for hire, and (2) the work must fall within one of the following nine narrow statutory categories: (1) a translation, (2) a contribution to a motion picture or other audiovisual work, (3) a contribution to a collective work (such as a magazine), (4) an atlas, (5) a compilation, (6) an instructional text, (7) a test, (8) answer material for a test, (9) or a supplementary work (i.e., “a secondary adjunct to a work by another author” such as a foreword, afterword, chart, illustration, editorial note, bibliography, appendix and index). If these requirements are met, the person who hired the independent contractor is likely to be deemed the copyright owner.Assigned, Seal, Delivered…It’s Yours Since merely stating that a work is a work for hire in a written agreement may not be enough (e.g., the work may not fall clearly into one of the nine statutory categories), a well-drafted work for hire agreement should also always contain an assignment of the entire copyright by the independent contractor over to the person commissioning the work.
ConclusionIn today’s “do it yourself” environment, it is inevitable that more and more musicians, writers, producers and other content-creators will be spending time and money developing work, often times with the help of third parties. I mean, let’s face it, we can’t do it ALL BY OURSELVES. Just remember that when you bring in other people to help with your work that are not your employees or independent contractors as defined by The Act, they may be considered co-copyright owners or even worse, the exclusive copyright owner. Protect yourself. In order to establish your legal ownership and control of the work, be sure that you have a comprehensive work-for-hire agreement that includes, among other things, an assignment of copyright provision.NOTICE: This article represents copyrighted material and may only be reproduced in whole for personal or classroom use. It may not be edited, altered, or otherwise modified, except with the express permission of the author. This article discusses general legal issues of interest and is not designed to give any specific legal advice pertaining to any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.