Work for Hire Contract

When you hire someone to create work for your company or you work as an independent contractor delivering creative deliverables, it’s vital to know who ultimately owns the rights to the final product. Under copyright law, the actual creator is generally assumed to be the owner of the copyright, even if that creator has been paid to have work done. However, typically, when an employee creates something in the course of his or her job -- or when a freelancer executes a work for hire contract and creates something in the course of fulfilling that work for hire contract -- the copyright belongs to the employer.

Work for hire doctrine is a complex area of law. Whether you are an employer contracting to create something or freelancer working as a creator, it’s important to make sure you understand your intellectual property rights. Speaking with a copyright lawyer can often help clarify copyright ownership and help you determine the proper next steps for you or your business. IP lawyers in the Priori Legal network have extensive experience with work for hire doctrine and can help you think through your copyright needs.

What Is “Work for Hire”?

When you create a work of art, whether you write a novel, code an app or simply snap a photo on your phone, you automatically have the copyright rights for that work. An exception to this default rule is when you create the work for your employer in your capacity as an employee. This exception is known as “work for hire” doctrine. Work for hire doctrine is a part of copyright law that states that the copyright for anything you create as an employee that is done as a part of your job is fully owned by the employer, not you.

When Work for Hire Doctrine Applies

As is inherent in the work for hire doctrine, the copyright to anything you create at your job in the course of your duties is owned by the company you are working for. This only applies in a limited way. If you work on filming a movie in your free time outside the office, you still keep the copyright, not your employer, even if you work for a production agency, so long as the film wasn’t assigned to you in the course of your duties and assuming you use your own equipment and resources. However, there may be other portions of your employment contract that could lead to your employer have a claim to the IP you create outside of your job duties--such as a non-competition clause.

Work for hire principles can apply to non-employees as well, but only in very limited circumstances. Freelancers may not own the copyright to their work in the event that the following three conditions are fulfilled:

  1.  All deliverables are specially ordered or commissioned by the company before work on the creation started.

  2.  There is a written contract between the company and the independent contractor stating that the deliverables are work for hire.

  3.  The final creation falls into one of these limited categories:

    • Contribution to a collective work, such as an anthology, a periodical, or magazine;
    • Part of a motion picture or other audiovisual work (including video games);
    • Translation work;
    • Work that supplements existing work, for example, illustrations for a book, editorial notes or a written foreword;
    • Compilation;
    • Instructional text;
    • Testing materials;
    • Answer materials for a test; or
    • Atlas. 

It’s important to note that all three conditions must be fulfilled, including the type of work completed, in order for the work for hire doctrine to apply vis-a-vis a work created, or any language qualifying the deliverables as work for hire in the contract will most likely be nullified.

Work for Hire in Technology Contracts

Often software and other technology contracts contain language qualifying works created by independent contractors as work for hire. Unfortunately, these provisions are rarely upheld, since much of this work does not fall within the allowable categories. This can lead to difficult and expensive situations where companies are forced to license the work they believe themselves to already own. In most software contracts—and any other independent contractor agreement— it is smart to follow any work for hire doctrine language with provisions assigning the final product to the company in the event that the final product cannot be considered work for hire.

How Copyright Transfers If a Contract Isn’t Work for Hire

Since work for hire doctrine is so limited, there are other ways to transfer the copyright once another person purchases the work. The most common way to do this in situations intended to be work for hire is through assignment. In the purchase agreement or contractor agreement, a clause is included assigning or transferring the copyright upon fulfillment of payment.

Another option is licensing. All IP rights can be licensed to third parties, through an agreement similar to a rental agreement. If the person hiring the creator for work does not secure assignment of the copyright and does not want the creator using the IP for other purposes or licensing its use to competitors, they have the option of paying for an exclusive license of the copyright. This generally must include additional payment beyond what was agreed upon for the creation of the work in the original contract.

Priori Pricing

Depending on your needs, the cost of hiring a copyright lawyer with work for hire experience can vary. Through the Priori network, hourly rates for lawyers with work for hire experience start around $175 per hour and range up to $450 per hour. In order to get a better sense of cost for your particular situation, put in a request to schedule a complimentary consultation and free price quote from one of our lawyers.

FAQ

If I hire a freelancer to create something for me, is the copyright automatically mine under work for hire doctrine?

Probably not. The select categories allowed for work for hire don’t include many types of works that businesses frequently hire independent contractors to create, such as websites, logos, advertisements, photography and custom software. Unless there is significant evidence that the work is for a collective work (such as a blog that many authors contribute to without attribution), the freelancer most likely retains the copyright unless it is assigned to you, even if you paid them to create the content. If you want to ensure that you own the copyright to work , it must be assigned to you.

What’s the difference between copyrights in work made for hire and copyrights that are assigned?

Both work for hire copyrights and assigned copyrights give the copyright owner the exclusive rights to sell, license, reproduce, distribute, publicly perform, publicly display or create derivative works based on the work. Despite this, there are some key differences. Work for hire copyrights are directly owned by the company paying for the work from its inception, while assigned rights must be formally transferred. Also, assigned IP rights have some limitations that work for hire copyrights do not. Finally, work for hire copyrights last for 95 years after first publication or 120 years after creation, not until 70 years after the author’s death like most copyrights.

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