27 Nov Contract Terms for Intellectual Property
This is the fifth, and final, post in a five part series on Essential Contract Terms for Consultants, Independent Contractors, and Freelancers. This post will focus on protecting your intellectual property.
A contract is not only an agreement regarding the exchange of goods or services for money or other compensation. A contract also defines the rights and responsibilities of the parties with regard to each other and to the work being performed. When it comes to knowledge and creative workers, the one thing they are trading on is their knowledge and creativity. But far too often, consultants, independent contractors and particularly creative freelancers give up their intellectual property, the fruit of their labors, for nothing. The culprit of this surrender of intellectual property rights is the Work for Hire Doctrine. When a knowledge worker or a creative professional is hired as an independent contractor by a larger organization, the larger organization will often contain language in their contract stating that the client organization will retain all copyright and intellectual property rights under the work for hire doctrine. Since the knowledge worker or creative professional thinks they are being “hired” to do a job, they simply assume they no have no intellectual property rights to the work they produce.
In many cases, such an assumption is wrong. Whenever a contract contains an intellectual property clause, I strongly encourage independent contractors and freelancers to consult an attorney before signing a contract containing such terms. I also strongly encourage independent contractors and freelancers to negotiate the intellectual property clause to retain their rights as much as possible.
The United States Copyright law covers the following types of works: “(1) literary works; (2) musical works, including any accompanying words; (3) dramatic works, including any accompanying music; (4) pantomimes and choreographic works; (5) pictorial, graphic, and sculptural works; (6) motion pictures and other audiovisual works; (7) sound recordings; and (8) architectural works.” 17 U.S.C. 102(a). It should also be noted, that a copyright only extends to these matters once they are put into a fixed medium for publication, thus an idea is not something that can be copyrighted. Thus, if a the work you are producing for a client falls into one of these categories, it can be copyrighted by the creator (that is you). But there is an exception to the copyright ownership–the work for hire doctrine.
Section 101 of the Copyright Act defines three a part test for determining if a work falls into the work for hire doctrine.
- the work must be specially ordered or commissioned;
- the work must come within one of the nine limited categories of works listed in the definition: (1) a contribution to a collective work, (2) a part of a motion picture or other audiovisual work, (3) a translation, (4) a supplementary work, (5) a compilation, (6) an instructional text, (7) a test, (8) answer material for a test, (9) an atlas;
- there must be a written agreement between the parties specifying that the work is a work made for hire.
All three parts of this test must be met. The prong of the test that is usually missing is the second prong. ONLY works in those categories can be considered a work for hire for anyone who is not an employee. Thus, it does not matter what your contract says, if your work does not fall into the nine categories defined above, as an independent contractor or freelancer, you are not covered by the work for hire doctrine.
The tricky part for knowledge workers and creative professionals is that the type of work they perform could have work that falls into the work for hire doctrine while other work may not. The line may be blurry and are highly fact specific. For example, a photographer hired to take a photo-essay for a magazine will almost certainly be subject to the work for hire doctrine since the photos will be put into a collective work-the magazine. However, that same photographer hired to take photos for a corporate client may not be subject to the work for hire doctrine depending on the use of the photos. Therefore it is vital that the facts of the engagement be clear before signing a contract. I strongly suggest that when dealing with an intellectual property clause, knowledge workers and creative professionals consult an attorney.
If a client insists on keeping the copyright even when the work is not subject to the work for hire doctrine, the best course of action is to begin negotiating for a license for the intellectual property. This would be a license fee over and above the fees you are being paid to produce the work. But an independent contractor can only do so if they are knowledgeable about the Copyright Law and the work for hire doctrine.
However, assuming a knowledge worker or a creative professional gives the copyright to the hiring entity, the negotiation does not end there. At the very minimum, you should seek to retain a limited license in the work you produced in order to be able to advertise your work. This could be as simple as seeking a limited license for portfolio purposes which would allow you to advertise your work.
Independent Contractors and freelancers may find themselves in a position of being asked to give up their intellectual property rights under a work for hire clause in the contract. But the work for hire doctrine is limited. Furthermore, the details of whether a work falls into the work for hire category is highly fact specific which necessitates a discussion with the client as to the purpose of the work.
Similarly, if the independent contractor or freelancer finds themselves facing an intellectual property clause and their work is not to be used for one of the nine categories under the work for hire doctrine, it is possible to negotiate a license or actual transfer of the copyright. No matter what you decide to do, you should be keeping at least a limited right to use your work to advertise your work.
The U.S. Copyright Office has published a circular briefly discussing the work for hire doctrine.
Also in this series:
- Part 1: Scope of Services Clauses
- Part 2: Invoicing and Payment
- Part 3: Dispute Resolution Process
- Part 4: Amendment Clause