Law Offices of Vance R. Koven | Latest Blog

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Law Offices of Vance R. Koven | Latest Blog

Copyright: I Paid For It, So Why Don't I Own It?

Tuesday, February 25, 2014

One of the most frequently encountered blunders business people make when farming out the production of copyrightable material--website copy and design, marketing and sales literature and catalogs, software, speeches, you name it--is that they don't do what is necessary to ensure that once the material is created and paid for, they actually own the copyright in it. Indeed, many consultants and contractors who produce this material are happy to put "you own it" into the contract for their services; but strange as it may seem, that language is more often than not ineffective. The contractor may even know this perfectly well, and then feel free to re-use this material for other purposes, even for creating material for the original business's competitors.

It may come as a shock to learn that the Copyright Act has some specific and rather fussy requirements for conveying copyright when the person creating the copyrighted material was not an actual employee of the business for which it was created. Basically, the law says that when the author is not an employee acting within the scope of employment, only nine specific types of work product can be designated in a contract as "work made for hire" (WMFH), the category most business owners would most like to see apply (why? because the copyright in WMFH is automatically owned by the business, which is then treated as the author for copyright purposes, and can't be clawed back--see below). The nine categories (taken from the definition of WMFH in section 101 of the Copyright Act) are: (1)  a contribution to a collective work, (2) as a part of a motion picture or other audiovisual work, (3) as a translation, (4) as a supplementary work [forewords, introductions, etc.], (5) as a compilation, (6) as an instructional text, (7) as a test, (8) as answer material for a test, or (9) 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.

Even if a work falls within one of those categories, there must be an explicit written agreement with the author saying that the work will be considered WMFH. Otherwise, the author owns it and the best the person commissioning the work can do is to have a written (it must be written) agreement transferring ownership of the copyright. Even then, the law provides that the author can terminate the transfer after 35 years (not a problem for most commercially useful but ancillary material, but a big problem if, for example, you're a publisher or a filmmaker and expect the work to be an earner for you over the long haul). Failing that, all the commissioner can get is a nonexclusive license to use the copyrighted work for the purpose for which it was commissioned, and the author retains the copyright and can use it however he or she pleases. This is probably not what most people have in mind when they hire someone to produce material for their business.

An illustration of how this plays out in the real world came even as I was writing up this entry, in the form of the Ninth Circuit Court of Appeals decision in Garcia v. Google, Inc., although the fact situation there was quite unusual: one of the actors in the film that became the notorious "The Innocence of Muslims" sued Google (which displayed it on its YouTube site) and the producer/director for copyright infringement on the grounds that her performance in the film was copyrighted, and that the producer altered it by overdubbing her words from the innocuous film she thought she was making to the words used in the film as released, which resulted in her getting death threats, presumably from offended Muslims. The Ninth Circuit, reversing the District Court, held that the actress did have a copyright in her recorded performance, and that because she had not signed a copyright assignment the producer/director had no right to alter it or use it to make a different movie from the one originally intended (by the actress, at any rate). In most professional film-making, the producer or studio gets every actor and other contributor to sign such a document, but this one was an amateur and didn't. Google was forced to take the film down from YouTube.

The Garcia case is full of complexities of copyright analysis, but this isn't the time to go into them. Suffice it for now to realize that if your business relies on copyrightable material prepared by non-employees, you need to have a properly worded transfer of rights. As in so much else in the business world, get it in writing!