Work Made for Hire and Intellectual Property

Protecting a small business’s intellectual property.

Protecting a business’s intellectual property fundamentally requires the imposition on employees and contractors of some level of restrictions on their ability both to disclose proprietary information to third parties and to claim that innovations in technology and know-how, or creative works, for which they are responsible, belong to them.

Among the remedies provided by the law to help employers in this respect is the Work Made for Hire Doctrine (referred to in this article as WMHD). WMHD derives from a provision of the U.S. Copyright Act, which provides that if a “work” is made pursuant to an employment or contractor relationship, that the employer, and not the employee, is the “author” of the work.

It is important to understand what the WMHD is not: It does not invest in the employer ownership rights in trade secrets and patentable technology produced by employees and contractors, where copyright law does not have application.

To protect its  rights in patentable technology and trade secrets, an employer should consider including in its hiring contracts a specific clause that requires the employee or contractor to acknowledge the employer’s ownership rights in the innovations and to relinquish whatever rights the employee could possibly assert with respect to them, and to agree to convey such rights, if any, to the employer.

As explained in the U.S. Copyright Act, copyright law protects a work from the time it is created in fixed form. Such “works” can include anything in written form, like books and articles, but also designs, photographs, paintings, software source code, etc.

Different from patents, which are intended to protect a novel idea, copyright law protects the expression of the creative thought; not the thought itself.

For example, plagiarizing a creative work of another author can be a violation of the copyright laws, but employing the idea of another author to produce a different work would not be considered a copyright violation.

In this respect, it is important to understand that WMHD provides an employer only limited protection as against the misappropriation of its creative assets.

WMHD has two parts:

First, a “work” prepared by an employee

A “work” prepared by an employee “within the scope of his or her employment” is owned by the employer who shall be considered the “author” of the work.

Second: A work specially ordered or commissioned

A work specially ordered or commissioned for use through an independent contractor can be considered.

A Work Made for Hire if the prospective work falls into one of the following categories:

• As a contribution to a collective work,
• As a part of a motion picture or other audio-visual work,
• As a translation;
• As a supplementary work, (defined as a work prepared as a “secondary adjunct” to a principal work such as a forwards, afterwards, illustrations, pictorials, maps, charts, tables, editorial notes, indexes, bibliographies, appendixes, etc.)
• As a compilation,
• As an instructional text,
• As a test,
• As answer material for a test, or
• As an atlas.

and the parties “expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.”

One of the issues

One of the issues that needed to be resolved by the U.S. Supreme Court in the oft-cited case—Community for Creative Non-Violence v. Reed—related to the construction of the term “employee.”

As the Supreme Court explained, for a worker to be considered an “employee” for copyright purposes, the ultimate issue is whether the employer has the “right to control the manner and means by which the product is accomplished.”

Next page: The Supreme Court identified several factors to consider…