united-states, intellectual-property, copyright, contracts, work-for-hireI run a small business that focuses on software development, and I occasionally hire outside graphic designers to do contract work for me. When I do that, I’m sure to include a work-for-hire clause so that I own the work and they can’t use it for other purposes or contracts for other people (in essence, I want to retain the copyright).
Is that a sufficient form of legal protection to make sure that the work they do for me remains solely mine and they can’t use it elsewhere?
I’m actually pulling the “share your knowledge, Q&A-style” card here.
No, as it turns out, the copyright law in the United States calls on only a specific set of situations that actually allow work-for-hire copyright claims.
Many freelance workers, and more relevantly here, people who hire freelance workers think–as I did, until relatively recently–that work-for-hire clauses covered most materials produced. For instance, as a company that frequently works for contracts, I was under the impression that the copyright on any code I wrote was transferred over to the hiring party, because I specified that I was doing the work for them.
Just to be complete, this is what a pretty typical work-for-hire clause might look like:
The FREELANCER and HIRING COMPANY intend for this to be a contract for services and each considers the products and results of the services to be rendered by the FREELANCER to be a work made for hire.
As it turns out, calling something a “work for hire” only helps in certain cases. It does apply to employer/employee relationships, so that isn’t affected by anything I’m saying here, but contract work is.
In general–and I’ve included the full quote below for specifics–it seems that most if not all work that I would ever have contracted out is not covered by this wording. The copyright ownership is only transferred in a select few cases, which focus mostly on when a contract worker does something that is a part of something bigger. For example, and again this is detailed nicely in what I’ve quoted below, it applies to freelancers who help with part of a motion picture. There are some fairly obscure and specific cases that it actually works for, but it wouldn’t work, say, if someone designed a logo for you, or did software development.
This is taken directly from the relevant law. As you’ll see, there are definitely cases where work-for-hire clauses are quite effective, but they are but a small subset of all cases people use them in.
A “work made for hire” is—
(1) a work prepared by an employee within the scope of his or her employment; or
(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.
Because the copyright stays with the creator in these cases, you could find a competitor (or even an unrelated business) who uses the same designer and ends up with the same logo. It’s unlikely, but it’s a risk.
Imagine, for example, if I contracted a developer to build a library to parse PDF files for me, and print the contents to plain-text files. I might expect, after paying $x per hour for that work to be done, that the developer would give me the source code and complete control over the work done, and that would be that. But in reality, it turns out that the same developer could actually then go and sell the very same source code for the very same library to another company without even informing me, effectively making me pay for someone else’s work.
Fortunately, the biggest issue here is simply in awareness. It’s easy enough to add on a clause that specifies that the ownership of the copyright is to be transferred to me, the hiring party.
I’ve taken this example from Columbia University’s “Keep Your Copyrights/Columbia Law School”, but this is a good example of a clause that would cover other cases.
If for any reason the Work would not be considered a work made for hire under applicable law, the AUTHOR does hereby sell, assign, and transfer to [distributor] its successors and assigns, the entire right, title and interest in and to the copyright in the Work and any registrations and copyright applications relating thereto and any renewals and extensions thereof, and in and to all works based upon, derived from, or incorporating the Work, . . . throughout the world.
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