Intellectual Property: Work For Hire

By Attorney Yan Zong

We are living in a world of information abundance, surplus and access. Businesses have started to, and will continue to, provide resources and tools on their websites to share with customers or potential clients for free. Staff of these businesses will write articles to be posted, just like what I am doing right now. However, TEIL continues to receive questions that are in the back of employers and employees minds “, who owns the right of the work?” The work could be an article, but could also be a picture or a quote.  

There are different ways that the work is viewed, but it is made at work, it may and probably does fall under “made for hire.” An employer is considered the author of a made for hire work although an employee creates the work. Section 101 of the Copyright Act defines a “work made for hire” as (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 within nine categories of works listed and if the parties expressly agree in a written agreement that the work shall be considered a work made for hire. See 17 U.S. Code § 101. 

The U.S. Supreme Court in Community for Creative Non-Violence v. Reed further clarified the definition. 490 U.S. 730, 741 (1989). If an employer-employee relationship is found, the work will be considered a work for hire generally. Id. But if an independent contractor creates the work, and the employer wants to claim the rights, the work must meet the second part of the definition, i.e. it falls within one of the nine categories AND there is a written agreement expressly indicating the work is made for hire. Id. Thus, the dispute would come up as if there is an employer-employee relationship. The Court looked at the general common law of agency for defining an “employer-employee” relationship and considered factors for mainly three categories: (1) control by the employer over the work; (2) control by the employer over the employee; (3) status and conduct of employer. Id. But the supervision or control over creation of the work alone is not controlling. Id. 

Illinois courts also listed the factors in determining whether an individual is an employee or an independent contractor. In City of Bridgeport v. Illinois Worker's Comp. Comm'n, the court opined that for purposes of workers' compensation benefits, it would consider (1) “whether the employer may control the manner in which the person performs the work;”(2) “whether the employer dictates the person's schedule;” (3) “whether the employer pays the person hourly;” (4) “whether the employer withholds income and social security taxes from the person's compensation;” (5) “whether the employer may discharge the person at will;” (6) “whether the employer supplies the person with material and equipment;” (7) “whether the employer's general business encompasses the person's work;” and (8) “what skill the work requires.” 2015 IL App (5th) 140532WC, 44 N.E.3d 652. The court emphasized the decision should rest on the totality of circumstances. In other words, all the evidences should be considered. Yet, the court also pointed out that “the single most important factor to consider in determining whether a person is an employee under the Workers' Compensation Act is whether the purported employer has a right to control the person's actions.” Id. Furthermore, in Byung Moo Soh v. Target Mktg. Sys., Inc.,  a court found that a former president was an employer, even though the defendants argued that the president had “some degree of control and direction over the performance of his work” and that the agreement governing the relationship defined the president’s job title and duties as “Executive shall have such powers and perform such duties as may be designated by the Board of Directors of the Company from time to time, such duties not to vary significantly from his duties as Vice President of the Company existing on the date hereof, unless agreed to by Executive.” 353 Ill. App. 3d 126, 129, 817 N.E.2d 1105, 1108 (2004).    

Since no precise standard set for determining if a work is made for hire, we recommend that the Business owner have at least a written agreement specifying the ownership over the work to be signed over no matter how you define the relationship as “employer-employee” or “independent contractor.” If you need an agreement drawn up or even reviewed call TEIL Firms (708) 531-1740 or reach us on the web at www.TEILfirms.com.