SIGN AT THE “X”:  THE IMPORTANCE OF WRITINGS
(2001)

In the case of Muhammed v. Lee et al., the United States Court of Appeals for the Ninth Circuit held that a consultant’s contribution to the motion picture Malcolm X did not render him a co-author of the film because he lacked control over the work and could not demonstrate any objective manifestation that the parties intended to create a joint work.  The consultant, Mr. Jefri Aalmuhammed, a noted Islamic scholar and the author of various texts on the film’s subject, was hired as a consultant to the film’s director and co-producer, Mr. Spike Lee.  The consultant’s primary responsibilities included script revisions, translation of dialogue from Arabic into English, and overseeing the general authenticity of the film.  None of these duties was performed pursuant to a written agreement.  Indeed, had there been a simple work for hire agreement, Spike Lee, his production companies and Time-Warner Entertainment would have avoided significant legal expenses and the unwanted publicity endemic to a lawsuit.

In today’s competitive business environment, a company’s value and flexibility often reside in the strength of its written agreements and intellectual property portfolio.  Yet, as the Spike Lee case illustrates, even major corporations sometimes overlook the importance of written agreements with each creative collaborator.  Those who create or license intangibles should have a basic understanding of intellectual property law and be proactively vigilant about protecting their intellectual property interests.

As a general rule, the creator of an artistic work, be that work literary, graphic, musical, sculptural, photographic or otherwise, owns a bundle of rights that compose the copyright to the work (namely, the exclusive right to reproduce, publicly display, publicly perform, distribute and/or make derivative works).  The primary exception to this rule are “works made for hire,” in which case the copyright belongs to the hiring person or entity.  A work made for hire is defined by the Copyright Act as a work prepared (1) by an employee within the employee’s scope of employment or (2) certain works specially ordered or commissioned from an independent contractor.

Works Created By An  Employee Within The Scope of Employment

Absent a written agreement, it is often difficult to determine whether an employee’s work is “within the employee’s scope of employment” because the Copyright Act does not define the sometimes slippery terms “employee” and “scope of employment.”  Our courts continually attempt to delineate factors to consider in making such determinations.  Those factors may include whether the work is similar or identical to the works the employee was hired to perform, whether the creation occurred in the employer’s office, and whether the work’s creator was treated as an employee by, for example, being provided with tax withholding, office space, materials, equipment, paid vacation and unemployment insurance.

The best way to make certain a work created by an employee is deemed a work made for hire is to enter into an employment agreement providing that any work the employee does as part of his or her employment is a work made for hire or is assigned (i.e., completely transferred) to the employer.  The distinction between a work made for hire and an assignment is an important one:  assignors may terminate assignments thirty-five (35) years after transfer, while works made for hire are owned for their entire copyright term by the employer (or commissioning party) and cannot be terminated by employees.  Though not always relevant to the software industry or other similarly self-obsolescing industries, the distinction can be very important to most other creations, such as literary and musical works.

Works Created by an Independent Contractor

Independent contractors can also be deemed to have created works made for hire if such works fall within one of the nine categories provided for in the Copyright Act and the parties have executed a written agreement indicating their intent that the work be considered a work made for hire.  The nine categories include works that are a contribution to 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 materials for a test, and an atlas.  Absent inclusion in one of these categories, the work will not be considered a work made for hire if created outside of the employer-employee relationship.

The Bottom Line

If you hire someone, whether as an employee or an independent contractor, to create a work that you wish to own, that work should only be created pursuant to an appropriately written agreement that deems the contribution a work made for hire or, if such designation is for any reason found to be improper, an assignment.  The materiality of the person’s contribution is not necessarily important.  He or she may have a colorable copyright claim to only a peripheral portion of the work and yet remain able to restrict you from using the work as planned.  At minimum, you will be forced to defend the claim and deal with the hassle and expense that accompany a lawsuit.  To borrow a line from Spike Lee’s movie and paraphrase Malcolm X, your intellectual property interests should be secured “by any means necessary.”  Well, at least by well written agreements. 

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