But first, in digesting this somewhat geeky post, it is useful to know that, as explained here, any "original work of authorship" is subject to copyright protection the moment that it is "fixed in any tangible medium of expression." For example, a love letter is instantaneously subject to copyright protection as it flows out beneath your fountain pen. By way of further background, the U.S. Copyright Act uses the term "author" to refer to all types of creators: writers, composers, visual artists, choreographers, filmmakers, architects, musicians, computer software programmers -- anyone who creates a copyrightable work. (See Section 102 of the Copyright Act for a general list of the types of copyrightable works.) The "work made for hire" doctrine addresses the question: Who is the "author" of -- and the owner of the copyright in -- certain types of works at the moment when they come into existence?
1. What is the essential difference between a "work made for hire" and the typical copyrightable work? Ordinarily when you create a copyrightable work you are its "author" and, at least initially, the owner of the copyright. (See Section 201(a) of the Copyright Act.) A "work made for hire" is a notorious exception to that default principle. If a work qualifies as a "work made for hire," your employer (or the person or entity that commissioned you to create the work) is deemed the "author" and initial copyright owner, even if he/she/it contributed no copyrightable expression whatsoever to the work. In other words, the employer (or commissioning party) owns all rights in the work; you own none -- ever (unless you enter into a contract in which your employer -- or the commissioning party -- bestows some rights upon you). No wonder that the American Society of Journalists and Authors has called work-made-for-hire agreements "all rights contracts on steroids." (See the ASJA's excellent primer on all-rights agreements here.)
2. What practical difference does it make whether you sign a "work made for hire" agreement or simply grant broad rights in your work to the commissioning party? There are two major downsides to a "work made for hire" relationship. First, as stated, you never have rights all in a work that you create on a "for hire" basis. Everything embraced by the copyright belongs, at all times, to the commissioning party. So, for example, if you were to create new works including characters or plot lines that appeared in the "work made for hire," you could be found to have infringed the commissioning party's copyright. Of course, as discussed in this earlier post, an assignment of your entire copyright interest would put you in a similar "rightless" position. This brings me to the second major downside: under the Copyright Act, a writer who assigns his copyright at least retains a right to terminate that assignment between the 35th and 40th year after it is made. By contrast, a "work made for hire" is forever. Since you are not deemed to be the "author" of a "work made for hire," you or your heirs cannot exercise the termination right.
For example, in the Bob Marley case, the court found that five record albums recorded by the great reggae star between 1973 and 1977 were "works made for hire." Marley therefore never owned the copyrights, which belonged instead to the "employer," Island Records, a subsidiary of Universal Music Group. Consequently, Marley's family was unable to exercise the termination right to recapture ownership of the albums after 35 years and thereby negotiate a better financial deal for the rights going forward. Of course, the great majority of works created in any medium have no commercial value by the time the recapture right kicks in. However, if your work, like Bob Marley's, is one of the rare long-lived exceptions, the fact that you signed a "work made for hire" agreement instead of a simple grant of rights or even an outright copyright assignment could be crucial. An "all rights contract on steroids" indeed.
3. How paranoid should you be about "work made for hire" clauses in contracts for your freelance work? Only reasonably paranoid. For many types of mundane works, you may have no interest in ever creating derivative works or recapturing the copyrights in 35 years. Freelance advertising copy. Annual reports for corporations. Beer making instructions. Marketing brochures. Press releases. Technical writing. I wrote all of those kinds of works in my days as a freelancer, before going to law school, and I have never regretted for a moment having no copyright interest in them. On the other hand, I also published books, magazine articles, and op-ed pieces, and I would not have been pleased to sign "work made for hire" agreements for those works. When, as a freelancer, you create a novel, a short story, a non-fiction book, a significant piece of journalism, a poem, a song, a play, a screenplay, or a variety of other works into which you pour something of your soul and which have at least some potential to be re-purposed (e.g., turning them into longer works, or re-using characters) it is entirely rational to be reluctant to sign a "work made for hire" agreement or, for that matter, any form of "all rights" agreement. It's a complex personal, economic, and legal equation, which will vary from writer to writer and work to work. There are some areas of writing, such as multi-authored textbook publishing, where "work made for hire" arrangements are commonplace. There are other contexts in which a "work made for hire" contract is little more than a rights grab. The various conventions of particular markets for writers are beyond the scope of this post, but are addressed in some of the online and printed references mentioned below.
4. All right, then, when is a work a "work made for hire." Under Section 101 of the U.S. Copyright Act, a “work-made-for-hire” can arise in only two circumstances: (1) when you, as an “employee,” create any type of copyrightable work within the scope of your employment, or (2) when you, as a non-employee, are specially ordered or commissioned to create one of nine designated types of works and you and the commissioning party agree in writing that the work will be a “work made for hire.”
5. What are the tricky parts of the "employee" branch of the "work made for hire" doctrine? The works you create for your employer within the scope of your employment are presumptively "works made for hire." No written agreement is required. For example, whatever I write for the law firm that employs me belongs to the firm, not to me. If my firm is paying me for written work that I create on firm premises during regular business hours with firm computers, I don't find it objectionable that the firm owns all rights to it. Controversies concerning employee-created "works made for hire" tend to arise in two areas. First, there may be disputes as to who qualifies as an "employee," such that the copyright vests in the employer, rather than an independent contractor or freelancer. That was the issue in the case of Community for Creative Non-Violence v. Reid in which the Supreme Court found that a sculptor was not an employee of the non-profit entity that retained him to create a sculpture. Second, there may be disputes as to whether a work is created "within the scope" of the employee's job responsibilities. If you work at The New Yorker as an editor during the day, your employer shouldn't own the short stories you are writing at home at night. While I am confident that The New Yorker does not make such an overreaching claim, other employers do sometimes include unfair anti-moonlighting clauses in their employment contracts or employee handbooks that purport to assert ownership over work created on the employees' own time. (See this amusing blog discussing IP and moonlighting in practical terms.) Anti-moonlighting rules may sometimes involve a "copyright assignment" issue rather than a "work made for hire" issue, but, either way, employees are too often disadvantaged by such clauses.
6. In the non-employee/freelancer context, must there be a written agreement with the commissioning party in order for your work to be deemed a "work made for hire"? Yes. If you are not an employee of the person or entity that commissions your copyrightable work, then, in order for the work to qualify as a “work made for hire,” there must be a written agreement between the parties, signed by both of them. These days, an inked signature on a piece of paper may not necessarily be required. But there must be something that qualifies as an “agreement” to which you personally affixed your name in some way.
7. Does a "work made for hire" agreement have to be made before you create your work? Yes. The parties must agree before the work is created that it will be a "work made for hire" belonging to the commissioning party. Courts are divided on whether the parties can orally agree on a "work made for hire" arrangement beforehand, but wait until after the work is created to sign a written agreement. Beware of efforts to recharacterize a work as a "work made for hire" after the fact. Here is Ivan Hoffman's blog post on the regrettable practice of using after-the-fact check endorsements to memorialize the "work made for hire" status of a work.
8. Does a "work made for hire" agreement have to include the magic words "work made for hire" for it to be effective? Yes and no. Ordinarily the agreement should use verbatim the magic words “work for hire" or “work made for hire” in order to give rise to a valid "work made for hire" relationship. If it does not use those words, the agreement may be interpreted as giving rise to some other form of transfer of rights. But be careful: the courts have sometimes cut commissioning parties some slack in terms of the exact phrasing, as long as the intention is clear. An agreement that speaks of the work as being “specially ordered or commissioned” or created “at the direction and expense” of another might conceivably sneak by. (See the discussion "talismanic words" in this case.)
9. Do all specially-commissioned, copyrightable works created by freelancers qualify as "works made for hire"? No. In an employer-employee relationship, any type of copyrightable work may be a "work made for hire." By contrast, in a non-employee/freelance situation, only a copyrightable work that falls within one of nine categories specified in Section 101 of the Copyright Act can properly be deemed a "work made for hire," namely:
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. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.Not infrequently, through ignorance or subterfuge, a commissioning party will ask a freelancer to sign a "work made for hire agreement" for a type of work that can't be a "work made for hire." For example, even if your contract for a novel says that it is a "work made for hire," it probably isn't. Similarly, in the Creative Nonviolence case above, a contract characterizing a sculpture as a "work made for hire" failed because a sculpture does not fall within one of the nine categories. Usually, however, a sophisticated commissioning party will include a "belt an suspenders clause" that says, in essence, "if for any reason the work does not qualify as a 'work made for hire,' writer hereby assigns to the commissioning party all right, title, and interest in the work, including, but not limited to, all copyrights therein throughout the world." But, if there is only an assignment of copyright, rather than a "work made for hire" relationship, a writer would at least retain the right to terminate the transfer after 35 years (unlike the Bob Marley in the case discussed above).
10. Are there other differences between a "work made for hire" and a conventional copyrighted work? A few. For example, unlike a traditionally authored work, for which the duration of copyright in the United States is the life of the author plus 70 years, a "work made for hire" enjoys a term of copyright that runs for 95 years from the date of first publication or 120 years from the date of creation, whichever is shorter. But the essence of the "work made for hire" doctrine turns on copyright ownership and the absence of a termination right.
11. Are there any limits on what an employer or commissioning party can do with a "work made for hire"? Not many. Such limits as there are come from areas of the law other than copyright. Right of publicity law or unfair competition law may prevent the proprietor of the work from using your name without your written permission. And you can, of course, enter into a contract with the proprietor that imposes upon him any terms you both agree upon, such as the duty to pay you royalties or to obtain your permission for certain uses. But absent a contract or right of publicity violation, the proprietor has free rein to create derivative works, combine the work with others, translate it, abridge it, change it, exploit it in all media -- the full scope of rights of a copyright owner.
12. What should you do when you are asked to sign a "work made for hire" agreement in a context where you believe it is unfair? Propose a license of less extensive rights as an alternative, which gives other party what he really needs, but not the many rights he really doesn't need. If that doesn't work, bargain for more money for derivative uses. Or ask that the commissioning party to assign the rights to you after a period of years. Of course, if you have little or no bargaining power, the commissioning party may tell you to take it or leave it. I you have a literary agent, she can offer you advice on the commercial realities of your particular situation. If you don't have an agent and if it is a commercially significant project, it may be prudent to seek the advice of a lawyer concerning the contract language and your legal options. See this earlier post on 44 sources of free or low-cost legal help for writers.
There is a wealth of good advice on how to respond when presented with a "work made for hire" contract in the ASJA primer mentioned above. The Writer's Legal Guide also offers pointers on negotiating strategy, including the reminder that, if you do sign a "work made for hire" agreement, you should obtain a written promise of any authorship attribution you are seeking. The Writer's Legal Guide also sagely advises that you try to bargain for a promise that, if the commissioning party cancels the project for any reason, the copyright in the work will be assigned to you.
For general information of the "work made for hire doctrine," the place to start is Copyright Office Circular 9. There is also a short, helpful discussion of "works made for hire" at the KeepYourCopyright.org site. The Professional Artists League has posted a feisty article on "work made for hire" abuses; while it focuses on visual artists, writers confront many of the same abuses. New York lawyer Lloyd Jassin has written a good article on drafting "work made for hire" agreements, written primarily from the point of view of a publisher seeking to acquire works on a "for hire" basis.
Finally, please note that this post is highly U.S.-centric. The "work made for hire" doctrine exists in some form in many countries, but the rules vary significantly from jurisdiction to jurisdiction.