Tuesday, October 4, 2016

Work Made For Hire Consequences And Considerations

Although the idea of “work for hire” has been around since the mid-nineteenth century, it was first adopted as a doctrine in the Copyright Act of 1909, and is officially titled “work made for hire”. Only two possible obligations can constitute work made for hire. First, if the work was produced for an employer while the creator was under employment. And second, if a written, signed, work made for hire contract, is agreed to by the commissioning party and the commissioned party, i.e., the client and illustrator for work specially ordered or commissioned, and the work meets one of nine possible conditions. Without a written signed agreement, the creator would retain the copyright ownership for work produced, for our purposes, the illustrator.

© 2012 Don Arday.

Employee Condition

Work made for hire is almost universally a condition of any exclusive, full-time employment arrangement. The employer retains all rights to copy and dispose of as they wish, any creative output produced by an employee. This would include all work from idea development, thumbnails, sketches, comps, to finished art.

Non-Employee Condition

The non-employee provision for work made for hire, egregiously and unfortunately, began to flourish in the 1970’s among companies that commission creative works for mass media. In 1976, to protect the rights of the creator, an amendment to the work made for hire doctrine was made to restrict the ability of companies to take advantage of a commission arrangement. The doctrine now states: All three of the following distinct conditions must exist in order for a work made for hire contract to be legal.

1) The work must be specially ordered or commissioned.

So, use of a prior work of art would immediately not qualify as work made for hire, nor would use of a derivative creation based on a prior work of art.

2) The work must meet one of the following nine definitions:

• A contribution to a collective work
• A part of a motion picture or other audiovisual work
• A translation
• A supplementary work (to another author’s work, such as a foreword, chart, or table)
• A compilation
• An instructional text
• A test
• Answer material for a test
• An atlas

Of the nine definitions, two in particular involve illustration more than any of the others, and they are a contribution to a collective work” and “a supplementary work”. Almost all editorial work produced by an illustrator can be considered supplementary or contributing to a collective work. Magazine illustration is contributing to a collective work. And in most cases, book illustration is supplementing the work of an author. The definitions in both instances can be stretched to include just about any publication or broadcast illustration commission, such as those for advertisements, corporate brochures, web pages, etc. Nearly every commission could conceivably be a work made for hire, but only if agreed upon by the illustrator and the commissioning party.

A work made for hire agreement stating the terms of the arrangement must be in the form of a written contact signed by both involved parties.

Verbal word of mouth arrangements are not considered legally binding. Since a work for hire contract deals with the ownership and disposition of personal property, like purchasing or selling a car or a house, it must be in writing.

Consequences

It is vitally important to consider the following: If a work is "made for hire", the employer, not the illustrator or artist, is considered the legal author and owner of the copyright for the work. Many publishing houses and magazine conglomerates are adopting and enforcing “work made for hire” contracts. This may sound absurd, but bound by one of these “work made for hire” contracts, the original illustrator has no right to; control usage of the image; receive any payments or royalties generated by reuse or resale of the image; produce any derivative works based on the image; or use the image for any purpose without permission. Under a work made for hire contract an illustrator would even have to get permission from the contractor to use a copy of the illustration they produced in their own portfolio, web page, or in a gallery exhibition. For illustrators who work traditionally, producing a physical painting, drawing or sculpture, not only the image, but the object itself, becomes the property of the contractor.

Considerations

There are some types of illustration commissions where a work made for hire agreement may seem to be appropriate. Illustrated logos and trademarks are two examples where the client would need to have complete ownership of image copyright. Still, there are alternative types of agreements that may serve the illustrator better for this sort of work than a work made for hire contract. A "transfer of copyright" agreement may be preferable to work made for hire, and transfers can be exclusive or non-exclusive. In other words, limited by certain conditions made by the illustrator, or unlimited. More information is available at http://www.copyright.gov/circs/circ01.pdf.

Not all work made for hire contracts are alike, so it is very important to read the contract over very carefully. There is no such thing as a standard contract, even though the client may say that the contract is a standard one.

Factors that influence the appropriateness and legitimacy of a work made for hire contract center around how closely, in the course of producing the commissioned illustration, an illustrator conducted himself or herself similarly to a full employee.

The validity of a work made for hire contract is weakened by the following factors:

• If the illustrator worked in their own studio.
• If the illustrator used their own materials and bought supplies themselves.
• If the arrangement is short lived.
• If the illustrator determined their own working hours.
• If the illustrator was paid a flat fee and not by the hour.
• If the illustrator was not on the client’s payroll.
• If the client did not pay the illustrator’s taxes or social security.

There are also other individual factors that would indicate that a work made for hire agreement would be inappropriate, but the bottom line is whether the opportunity merits the sacrifice. There may be a work for hire offer that is extremely lucrative, or of such high profile, that through negotiation of certain conditions, it is worth relinquishing some ownership rights. And, the thought of having to challenge the arrangement in court may never become a reality.

Working With Contracts

There are two very important things to note, when presented with a contract. And they apply whether it is a work made for hire contract or any another type of contract. First, as was mentioned earlier, there is no standard for contracts. Second, an illustrator has the right to amend any contract they are presented with, and it can be as simple as crossing out any terms or conditions that are not agreeable, or editing the wording in the contract, or adding additional provisions to it.

Here’s one way to look at it. When a client presents a contract to an illustrator they wish to hire, think of it as an "offer" from the client. Whether it’s a work made for hire contract or not, it’s perfectly reasonable for the illustrator to present the client with a "counter offer" for their consideration by way of amending the original offer. A negotiation of terms can continue from that point. It is rare for a client to flat out refuse all changes the illustrator requested, but it does occur. When it does, increasing the cost of services may be in order. Be sure any contractual agreement made with a client for control of illustrations will be worth it.

For more information on contracts and agreements see theinformedillustrator.com posts, Illustrators Agreements & Contracts 1: Components, and “Illustrators Agreements & Contracts 2: Restrictions”.