Copyright Ownership and “Works Made for Hire”

Businesses often hire third parties to produce copyrightable works on their behalf. An example is Company A hiring Company B to write a software app for Company A. This type of business contract results in the creation of creative works that are protectable under the copyright laws of the United States, such as source code or photographs.

Understandably, Company A may desire ownership of the copyright in the works created, as ownership will not only give Company A the ability to use the works however it wants, but Company A will also have the freedom to license or sell the copyright and enforce the copyright against third parties. However, Company A will only own the copyright if the work qualifies as a “work made for hire” under the law or if there has been an assignment of the copyright to Company A.

Under U.S. copyright law, “works made for hire” include works prepared by employees within the scope of their employment. See the Copyright Act, at 17 USC § 101. Works produced by non-employees can only be “works made for hire” if they are specially ordered or commissioned for use as a:

1. contribution to a collective work,
2. part of a motion picture or other audiovisual work,
3. translation,
4. supplementary work,
5. compilation,
6. instructional text,
7. test,
8. answer material for a test, or
9. atlas,

and if the parties expressly agree in writing that the work shall be considered a work made for hire.

For those works that qualify as “works made for hire” under the law, ownership automatically vests in the person/company for whom the work was created, as they are considered the author. For those works that do not qualify, written assignment of copyright is necessary in order for ownership to transfer to the person/company for whom the work was created.

Many times creative works such as source code, photographs, and graphic designs that are created by non-employees do not fit into the nine categories above and therefore cannot qualify as “works made for hire” under the law. It is important to recognize that simply calling a creative work a “work made for hire” cannot overcome any failure of a work to qualify as such under the Copyright Act. Accordingly, companies hiring non-employees to create any type of creative work should carefully consider contractual language regarding ownership. It is often advisable to include a written assignment as part of the contract.

If you have questions regarding how to address ownership of copyrightable works produced by a non-employee, an attorney experienced in copyright matters can provide pointed guidance.