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The Real Meaning of Work for Hire
by Dan Rogers on 08/09/13 10:54:00 am   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutraís community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

If you’ve worked in the videogame industry for any length of time, you’ve undoubtedly come across legal language similar to this: 

The Game and all other Intellectual Property that the Developer creates in connection with the services provided under this Agreement shall be considered work made for hire, and shall therefore be the sole and exclusive property of Publisher from the time of creation.


But Few Understand What Work Made for Hire Means.

In a videogame contract, Work Made for Hire is a means of clarifying the intellectual property ownership of whatever creative work is being developed between the parties.  In the context of a videogame publisher-developer relationship, it is used to ensure that the publisher owns developer-created assets and game content.  As a developer, when you see Work Made For Hire in your contract, you should be thinking, “What intellectual property rights did I just give up?” And the answer, most of the time, is that you’ve given up all your intellectual property rights.

In a videogame developer-independent contractor relationship—a 3D artist working on subcomponents of a game, for example—the same principle applies. If Work Made for Hire appears in your developer-contractor agreement, then the developer is expressing a desire to own and exclusively control the work that an independent artist is creating.

So What Happens When There Isn’t a Work Made for Hire Contract or Provision?

Technically, Work Made for Hire is a contractual clarification of the relationship between the parties. If you’re an artist, musician, programmer, or designer, but not an employee, and you’re either a) working without a written agreement altogether, or b) there isn’t a Work Made for Hire provision in your agreement, then its likely that you’ve retained your intellectual property rights, despite being paid to create them.

How can this be true?

Under U.S. Copyright law, artistic creations—whether art, music, programming code, or game designs—vest to the creator, unless a work made for hire arrangement has been agreed. 

What surprises many is that the act of paying for a creative work doesn’t automatically give the payor the intellectual property rights of the creator.

This idea is codified in Section 101 of Title 17 of the United States Code:

A “work made for hire” is— 

 (1)  a work prepared by an employee within the scope of his or her employment; or

 (2)  a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or 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.

Understanding Category 1 – Work Created by an Employee.

In unraveling the language in Number 1 above, it’s clear that work created by an employee is work made for hire. As such, the employer owns the underlying intellectual property rights. But the trick is in figuring out whether a binding employer-employee relationship exists. And that’s where things get more complicated.

Under copyright law, the term employee is broader than what most people assume. 

As an example, let’s assume that you’re the employer, and you’ve hired someone to create 3D art for your new game. 

To determine whether they are an employee under copyright law, we have to examine the nature of the relationship as codified in a U.S. Supreme Court case, Community for Creative Non-Violence v. Reid: [1]

1)   Do you, the employer, have control over the work? Do you determine how the work is done? Is the work done at you location or does the artist create their work offsite? Do you provide equipment or other means for the artist to create their work?

In our example, the artist works from home, but comes in your office once a week to pick up their check and show you their progress. Theyuse their home computer and their own personal copy of Maya (graphics software). You only provide general direction over their work. 

Not withstanding other considerations, the artist probably owns the art they create, and your rights are limited either to a non-exclusive license to use it, or a claim that it’s a jointly owned work, giving both parties equal intellectual property rights.

2)   Do you control the artist’s schedule? Can you assign other tasks to them?

In our example, the artist works on a schedule they alone determine (provided they hit their milestones), and they have the right to refuse additional work from you.  

As was true in the prior illustration, not withstanding other considerations, the artist probably owns the art they create, and your rights are limited either to a non-exclusive license to use it, or a claim that it’s a jointly owned work, giving both parties equal intellectual property rights.

3)   Do you provide the artist with health insurance and other benefits? Do you withhold tax?

 In our example, you pay the artist a set fee, and you don't deduct taxes or provide health or retirement benefits.  

Just as it was true in the prior two illustrations,  not withstanding other considerations, the artist probably owns the art they create, and your rights are limited either to a non-exclusive license to use it, or a claim that it’s a jointly owned work, giving both parties equal intellectual property rights.

Note that the factors above (called the Reid factors after the precedent case) are not conclusive or exhaustive in determining whether an employer-employee relationship, but they are indicative of whether you’re treading dangerous water. 

Understanding Category 2 – Work Created in One of Nine Enumerated Categories.

In addition to the employer-employee test discussed in Category 1, copyright law specifies that if a work is included in one of nine categories (a collective work; a part of a motion picture or other audiovisual work; a translation; a supplementary work; a compilation; an instructional text; a test; answer material for a test; or an atlas) then a written instrument signed by both parties is required for that to be considered a work made for hire.

For simplicity sake, I’ll narrow our discussion to two common problems in the videogame industry.

1.     A videogame, as a whole, is considered an audio-visual work under copyright law. [2] As such, it is included in the nine categories (audio-visual), and unless there is a work made for hire agreement, signed by both parties, then the work still belongs to the creator.

2.     The computer code underlying the videogame is considered a literary work under copyright law. [3] As such, it is not in included in the nine categories, and without an agreement in place, it falls outside the statute. In other words, the programmer owns the work. 

There are other ways of proving ownership—a common law argument, as given in the Reid case—but enforcing these arguments is costly and risky. As such, it’s always better to clarify the relationship before the work begins.

Conclusion.

So the bottom line is this:

If you’re an independent artist, programmer, musician, or designer, pay attention to the work made for hire provision in your agreement. You may be giving up more than you intended.

If you’re a publisher or a developer hiring independent artists and programmers, and you want to own the intellectual property they create, then you need a work made for hire provision in your agreement. Without one, you probably own less than what you think. 

Best, Dan
Follow me on Twitter: @rogersdanlee


[1] In a precedent U.S. Supreme Court case, Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989), the Court concluded that “In the past, when Congress has used the term "employee" without defining it, we have concluded that Congress intended to describe the conventional master-servant relationship as understood by common law agency doctrine.”
[2] Stern Elecs., Inc. v. Kaufman, 669 F.2d 852 (2d Cir. 1982).
[3] Williams Elecs., Inc. v. Artic Int'l, Inc., 685 F.2d 870 (3d Cir. 1982).

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Comments


J Michael Monahan
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While this post captures the work-for-hire concept, it would benefit from the the other piece of the copyright puzzle -- namely, work-for-hire versus an assignment. Absent an extremely informal arrangement, no game creator should expect to provide content without one of these two relationships. In a work-for-hire relationship, the recipient of the content (e.g., the publisher) is the author of that work. The actual creator (employee, or contractor) serves as an instrumentality of the recipient. To satisfy the work-for-hire rules, the source of the work must either (a) create the work as an employee in the course and scope of his/her employment; or (b) create the work under a pre-existing work-for-hire relationship. While the work-for-hire contract might be papered after production, the work must result from the recipient's prior request and/or instruction. So if I employ you to make game assets, I am the author of the assets you make on the job. If I contract with you to make game assets, and we have a work-for-hire relationship, then I am the author of the assets you create under that contract. If you had pre-existing assets, however, I can only obtain those through an assignment.

If you think of it as a timeline, the work-for-hire rules make sense. If you create something because it's your job, then your employer is the legal source of that work. Similarly, if you create something because I ask you to make it for me, then I am the author (so long as we have the proper contract). In both cases, the work would not exist absent the employment or contractual request.

The OP's call for caution is important, though. If you are creating content at the behest of another person, both parties need to focus on who owns that work. The creator should understand what he/she may retain after the job (portfolio copies, tools for use in other projects, etc.) and the recipient needs to know what it gets out of the project. Since development work often includes a mix of new content and pre-existing content (the creator may have a library or older art or code to incorporate into his/her work), even a basic agreement will include both work-for-hire and assignment concepts, as well as some residual license provisions to cover the permitted use of works that do not otherwise transfer.

Finally, the ability to terminate an author's transfer presents an important distinction between a work-for-hire and an assignment. If the original, individual author assigns a work, then he/she retains a revocation right after 35 years. Where that work is made "for hire," there is no reversion right.

Dan Rogers
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Thanks for the input, Michael. And you're right that assignment is an important aspect of the copyright ownership puzzle.

Gil Salvado
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Thank you, this is going to help a lot.


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