Works Made for Hire: Federal Framework and California Alternatives

Introduction

The works made for hire doctrine represents one of the most significant exceptions to the general principle that copyright ownership vests initially in the author of a creative work. Under federal copyright law, when a work qualifies as a “work made for hire,” the employer or commissioning party is considered the legal author and owns all rights in the copyright from the moment of creation. This doctrine has profound implications for creators, employers, and commissioning parties, particularly in California where state employment classification laws add additional complexity to the analysis.

Understanding when the works made for hire doctrine applies, when it fails, and what alternatives exist is crucial for anyone involved in creative industries, from software development to entertainment to publishing. This article examines the federal framework governing works made for hire, identifies common scenarios where the doctrine fails to apply, and explores the alternatives available under California law.

Federal Works Made for Hire Framework

Basic Legal Principle

Under the Copyright Act of 1976, copyright ownership ordinarily vests initially in the author or authors of a work. However, the works made for hire doctrine creates a significant exception to this general rule. When a work qualifies as a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of federal copyright law 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 works made for hire concept first arose in controversies over copyright ownership involving works produced by persons whom all parties agreed were employees. The doctrine has since evolved to encompass two distinct categories of works, each with specific requirements that must be satisfied. 

Two Categories of Works Made for Hire

Federal copyright law recognizes exactly two ways a work can qualify as a work made for hire. These categories are mutually exclusive, meaning a work cannot qualify under both categories simultaneously.

Category One: Employee Works

The first category covers works prepared by an employee within the scope of his or her employment. This category requires satisfaction of two elements: (1) the creator must be an employee of the party claiming ownership, and (2) the work must be created within the scope of that employment relationship.

Category Two: Specially Commissioned Works

The second category applies to works that are specially ordered or commissioned for use in one of nine specified categories, provided there is a written agreement that the work is considered for hire. The nine enumerated categories are:

1. Contributions to collective works. Example: A freelance journalist writes an article for a magazine. The magazine is a collective work (a compilation of separate articles), and the individual article is a contribution to that collective work;
2. Parts of motion pictures or other audiovisual works.  Example: A composer creates a musical score specifically for a movie, or a graphic designer creates animated sequences for a documentary film;
3. Translations. Example: A publisher hires a freelance translator to translate a novel from Spanish to English.
4. Supplementary works. This includes works like forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, bibliographies, appendixes, and indexes that support another author’s primary work. Example: A freelance illustrator creates diagrams for a textbook, or someone writes an index for a published book.
5. Compilations. Example: A company hires someone to create a directory of local businesses, organizing and arranging the information in a specific way.
6. Instructional texts. This refers to literary, pictorial, or graphic works prepared for use in systematic instructional activities. Example: A freelance writer creates a workbook for a math curriculum, or an artist creates educational posters for a language learning program.
7. Tests. Example: An educational testing company hires a freelance educator to write questions for a standardized exam.
8. Answer materials for tests. Example: Creating answer keys, scoring guides, or explanatory materials that accompany a test.
9. Atlases. Example: A cartographer is commissioned to create a collection of maps for a geographical atlas.

What’s NOT Included

Importantly, many common types of commissioned works are not included in these nine categories. For example:

• Sculptures or standalone artwork: A nonprofit organization commissioning a sculptor to create a statue cannot claim it as work made for hire because sculpture is not one of the nine categories
• Standalone photographs: Unless they’re part of a collective work or instructional material
• Software programs: Unless they fall into one of the specific categories
• Logos or graphic designs: Unless they’re part of a larger qualifying work

Employee vs. Independent Contractor Analysis

The Reid Decision Framework

The determination of whether a hired party is an employee for purposes of the Copyright Act is a question of fact resolved by consideration of the usual factors distinguishing employees from independent contractors. These factors include the skill required, source of tools, location of work, method of payment, and other traditional agency law considerations.

Importantly, courts have rejected a simple “right to control” test for determining employee status in the copyright context. A work is not automatically considered for hire simply because the hiring party retains the right to control the product or has actually wielded control with respect to the creation of the work. Such a control test would be inconsistent with the language, structure, and legislative history of the work for hire provisions.

Mutual Exclusivity of Categories

The two categories of works made for hire are mutually exclusive. Because the second category creates a distinct provision for specially commissioned works, there is no statutory support for an additional dichotomy between commissioned works that are actually controlled and supervised by the hiring party and those that are not. This mutual exclusivity is crucial because it means that if someone is determined to be an independent contractor, the work can only qualify as work made for hire under the second category’s strict requirements.

When Works Made for Hire Fails

Independent Contractor Scenarios

The works made for hire doctrine frequently fails when the creator is classified as an independent contractor rather than an employee. If the hired party is an independent contractor, the work made for hire doctrine does not apply unless the work falls within one of the nine enumerated categories and the parties have executed a written agreement stating that the work shall be considered a work made for hire.

Missing Written Agreements

Even when a work falls within one of the nine enumerated categories for specially commissioned works, the absence of a written agreement signed by both parties prevents the work from qualifying as a work made for hire. This requirement is strict and cannot be satisfied by oral agreements or implied understandings.

Works Outside Enumerated Categories

Many types of creative works fall outside the nine categories specified for specially commissioned works made for hire. For example, standalone photographs, individual musical compositions, novels, and many other creative works cannot qualify as specially commissioned works made for hire regardless of the parties’ intentions or contractual arrangements.

Scope of Employment Issues

Even when dealing with employee-created works, the work made for hire doctrine fails if the work was not created within the scope of employment. Works created by employees on their own time, using their own resources, and outside their job responsibilities typically do not qualify as works made for hire.

California’s Employment Classification Framework

The ABC Test

California has implemented a stringent test for determining whether workers should be classified as employees or independent contractors. Under California Labor Code Section 2775, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all three conditions of the “ABC test” are satisfied.

The ABC test requires that: (1) the person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract and in fact; (2) the person performs work that is outside the usual course of the hiring entity’s business; and (3) the person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

The Borello Standard

Certain occupations are exempt from the ABC test and are instead governed by the California Supreme Court’s decision in (S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 [256 Cal.Rptr. 543, 769 P.2d 399].). The Borello standard emphasizes the primacy of statutory purpose in resolving the employee or independent contractor question. Under Borello, it is possible that a worker may properly be considered an employee with reference to one statute but not another, depending on the different statutory schemes and their purposes.

Impact on Copyright Analysis

California’s employment classification laws can significantly impact the works made for hire analysis. If California law classifies a worker as an employee while federal copyright law would classify the same worker as an independent contractor, this creates a complex legal situation requiring careful analysis of both state and federal requirements.

Alternatives When Work for Hire Doesn’t Apply

Copyright Assignment Agreements

When the works made for hire doctrine does not apply, the most common alternative is a copyright assignment agreement. Under federal copyright law, any of the exclusive rights comprised in a copyright, including any subdivision of those rights, may be transferred and owned separately. The owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner.

Licensing Arrangements

Instead of seeking ownership through assignment, parties may choose licensing arrangements. In the digital context, licensing agreements have become ubiquitous, and license agreements, rather than sales, have become the predominant form of transfer of rights to use copyrighted software material. Licensing arrangements enable companies to restrict initial licensees from selling their licensed copies to downstream users, since the first sale doctrine does not apply to licensees.

Collective Works Provisions

For certain types of creative projects, the collective works provisions of federal copyright law provide an alternative framework. Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of an express transfer of copyright or rights, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.

Joint Ownership Considerations

In some circumstances, joint ownership may be appropriate. The authors of a joint work are co-owners of copyright in the work. However, joint ownership can create complications in terms of licensing, enforcement, and accounting, so it should be carefully considered.

California-Specific Considerations

State Copyright Law

California has its own provisions regarding ownership and transfer of rights in original works of authorship. The owner of any rights in any original works of authorship not fixed in any tangible medium of expression may transfer the ownership therein. Additionally, the owner of any invention or design, or of any representation or expression thereof, may transfer his or her proprietary interest in it.

Fine Art Protections

California provides specific protections for fine art, including definitions of “fine art,” “artist,” and “right of reproduction”. Fine art includes any work of visual art, including but not limited to drawings, paintings, sculptures, mosaics, photographs, works of calligraphy, graphic art, crafts, or mixed media. The right of reproduction encompasses various commercial uses including reproductions used for greeting cards, advertising, television, and other commercial purposes.

Employment Law Compliance

California’s strict employment classification requirements mean that many relationships that might be treated as independent contractor arrangements in other jurisdictions will be classified as employment relationships in California. This classification affects not only copyright ownership but also requirements for paying federal Social Security and payroll taxes, unemployment insurance taxes, state employment taxes, providing worker’s compensation insurance, and complying with numerous state and federal statutes governing wages, hours, and working conditions.

Practical Considerations and Best Practices

Drafting Strategies

When the works made for hire doctrine may not apply, careful contract drafting becomes essential. Agreements should include comprehensive copyright assignment clauses that transfer all rights in the work to the commissioning party. These assignments should be broad enough to cover not only the initial work but also any derivative works, modifications, or enhancements.

Documentation Requirements

Proper documentation is crucial for establishing copyright ownership when works made for hire does not apply. Written agreements should be signed by all parties and should clearly specify the scope of rights being transferred. The agreements should also address issues such as moral rights, attribution, and the right to create derivative works.

Risk Mitigation

Given the complexity of both federal copyright law and California employment law, parties should consider multiple approaches to securing copyright ownership. This might include structuring relationships to qualify for works made for hire treatment while also including backup assignment provisions in case the work for hire analysis fails.

Ongoing Compliance

California’s evolving employment classification requirements mean that arrangements that were compliant in the past may not remain compliant in the future. Regular review of contractor relationships and copyright ownership structures is advisable to ensure ongoing compliance with both state and federal requirements.

Conclusion

The works made for hire doctrine provides a powerful mechanism for employers and commissioning parties to secure copyright ownership, but its application is limited by strict statutory requirements. When the doctrine fails to apply – whether due to independent contractor classification, missing written agreements, or works falling outside enumerated categories – alternative approaches such as copyright assignments and licensing arrangements become necessary.

California’s stringent employment classification requirements add an additional layer of complexity to copyright ownership planning. The state’s ABC test makes it more likely that workers will be classified as employees, potentially bringing more works within the scope of the works made for hire doctrine. However, this same classification creates additional compliance obligations that must be carefully managed.

Successful copyright ownership planning in California requires a thorough understanding of both federal copyright law and state employment law, along with careful attention to contract drafting and ongoing compliance requirements. By understanding when works made for hire applies, when it fails, and what alternatives are available, parties can better structure their relationships to achieve their copyright ownership objectives while complying with applicable legal requirements.