Monday, May 21, 2007

Work Made For Hire Agreements

Hi, welcome back to Trebor's Bite-Sized Bits! As our regular readers know, this little blog/newsletter is intended to offer some basic background on copyright law, trademark law and other related areas of interest. It is not intended to be legal advice in any way, shape or form. If you have copyright or trademark issues, always consult an attorney experienced in those areas.

I've been getting a lot of questions lately about Work Made for Hire Agreements. The usual rule is that the person who creates a work is the owner of the copyright in that work and is free to exploit it. However, under a work made for hire agreement, the person who employs the creator of a work or commissions a legally valid work made for hire is the owner of that work upon its creation.

If you are clearly a regular employee of a person or entity, get paid a regular salary, get W-2s, benefits, health care, etc. there is little doubt that if you create a work within the scope of your employment, it belongs to the boss. However, there's a wrinkle to this. Notice the words "scope of your employment". If you create a work outside the scope of your employment, on your own time using your own resources, the authorship of that work may very well vest in you, absent some agreement with your boss to the contrary. This may be true even though the idea for the work might have been inspired somehow by your workplace and relate to your employment.

In a copyright ownership litigation, if there is some question about whether you are an employee or not, a court deciding that issue will look at all the circumstances of the relationship between you and the person claiming to be your employer to determine the real nature of that relationship. Generally speaking, if a person controls the means and methods of how you do your work, you are an employee. If that persons has only the right to control or direct the result of the work without more, you are an independent contractor.

If you are clearly an independent contractor or free-lancer, whether or not a work is a work made for hire depends on two things: (1) a written agreement between the parties agreeing that the work is indeed a work for hire and (2) the type of work it is. Here is the language of the United States Copyright Act:

Works Made for Hire. -- (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. 17 U.S.C. sec 10.

It is important to note that BOTH conditions must be met for a work to be considered a work made for hire. There must be an agreement and the work must fit within one of the nine rather narrow categories outlined above. If both of these conditions are not met, the work is NOT a work for hire. Tricky business. I'd definitely consult a lawyer before entering into a work made for hire agreement.

Those in the music industry, both on the talent and production end, should note that a sound recording is generally not currently included in any of the nine categories named above. However, most recordings contracts will provide that should a sound recording not qualify as a work made for hire under the recording contract, then, alternatively, the recording artist agrees to assign the artist's rights in the sound recording to the record label. While there are some important differences between a work made for hire agreement and an assignment, I'm going to save that topic for a later date.

Since it is somewhat related conceptually, I'm also going to touch briefly here on another topic that was raised by someone in a recent communication. Suppose you commission a photographer to do some photographs or an artist to do an oil painting. Be aware that physical ownership of the photographs or the oil painting generally gives you no rights in the images that constitute the photographs or the oil painting, absent an agreement to the contrary.

In other words, gentle readers, if any of you are ever struck by the bright idea that you suddenly want to incorporate the lovely painting you purchased as a design on some china plates and sell those plates on E-Bay, put that idea right out of your adorable heads--at least absent a talk with the artist and a very carefully drafted written agreement that allows you to use her images from your oil painting.

Again the TBSB battle cry rings out: For heaven's sake, be careful out there people!

See you next time with another issue of TBSB.

Sunday, May 6, 2007

Fair Use in Copyright Law

Hi, welcome back to Trebor's Bite-Sized Bits! This little blog/newsletter is intended to offer some basic background on copyright law, trademark law and other related areas of interest. It is not intended to be legal advice in any way, shape or form. If you have copyright or trademark issues, always consult an attorney experienced in those areas.

I was going to write more about the exclusive rights of copyright owners in this issue of Trebor's Bite-Sized Bits but an e-mail I got from a reader recently gave me great pause—and caused me to decide to discuss an entirely different topic: the issue of fair use in copyright law.

This reader, who shall remain nameless, said that he/she was going to use a 30-second segment of music as background music for a film the reader was creating and assumed that the use of this "small" segment" would be a fair use under copyright law.

A very dangerous assumption.

Let's assume hypothetically, gentle reader that you are considering incorporating another copyrighted work within a work that you are creating in much the same way as the reader who e-mailed me planned to do. Let's see how a fair use analysis might come out.

Bear in mind, however, that what follows is a very simple breakdown of fair use. If you REALLY have questions concerning whether your use of another person's copyrighted work is a fair use, get authorization from the copyright owner to use that work (nearly always the best idea) or consult a lawyer. You do NOT want to find yourself in federal court trying to resolve the issue of whether your use of another's work was a fair use. And remember—if it's not a fair use, generally speaking, it's an infringing use.

Fair use is a doctrine that allows non-infringing use of copyrighted material in certain instances. There are four main factors that figure into determining whether a use is a fair use. The factors are considered together and in any particular case one factor can predominate, although all factors are considered to the extent relevant to the specific facts of a case:

1. The purpose and character of the work. Certain activities such as criticism and comment require that some portion of the copyrighted work needs to be reproduced. Reviews, teaching and news reporting may fall within the fair use exception. A parody, a work that ridicules a copyrighted work by imitating the copyrighted work in a comic way, may also be a fair use. These are called "transformative uses" and fall within the scope of the fair use doctrine. The amount of the work used must be reasonable in light of the particular fair use. A few lines of lyrics may be appropriate for a music review, for instance, while a more sizable chunk of the copyrighted work may be appropriate for a parody. There are also trickier "transformative" uses. For example suppose an artist creates a work of art that is a collage of other copyrighted works but the new work arguably changes the "borrowed" works so completely that the new work constitutes a radically new work that has an entirely different purpose and meaning than the borrowed works. Is that a fair use? Maybe. But, again, you really don't want to go into federal court to find out.

2. The nature of the copyrighted work. You have more leeway using copyrighted material that is factual in nature than in using material from more "creative" works, e.g. fiction vs. non-fiction. You also have more leeway in using published works than you do in using works that have not yet been published.

3. The amount and substantiality of the portion taken of the copyrighted work. If you copy a large portion of the work, it is highly unlikely that your use will be considered a fair use. Even you copy a very small portion of a work, but that portion is very important to the work as a whole, it is highly unlikely that your use will be considered a fair use. More about that below.

4. The effect of the use on the market for the copyrighted work. This factor considers the effect of a use of a copyrighted work on the copyright owner's ability to exploit that work. If you are going to license, sell or otherwise exploit your work in a market where the copyright owner could have exploited the original work, well, it's clear that there will considerable question as to whether that use is a fair use.

So let's look at the use a segment of music as background music in a new work-- a film--through the fair use lens.

As to factor one, the use doesn't fall under criticism and comment category. Even if the new work itself is criticism and comment, it's not criticism and comment on the original copyrighted work. There is nothing transformative about the use. Merely using the music in the context of a new medium isn't transformative. As to factor two, the original copyrighted work is a "creative" work and less likely to be found to be a fair use.

As to factor 3, while it's possible to use a very small amount of a copyrighted work in such a fleeting (often accidental) manner that it won't even raise a fair use issue--for example where a copyrighted photograph appears for a couple of seconds accidentally in the background of a film (called a "de minimus" use) —30 seconds of music is not very likely to fit in that category. As to the substantiality of 30 seconds of music, a segment of that length is likely to be an identifiable portion of music, perhaps the very heart of the work. As to quantity, much smaller time segments of music or other copyrighted works incorporated into new works have been found not to be a fair use but an infringing use.

As to factor 4, the use of 30 seconds of music is exactly the kind of use that tgw copyright owner might negotiate in a synchronization license (a license using timed music with film or video images). In this case, if you've used that segment of music without permission, you've already deprived the copyright owner of at least once chance to market that music, haven't you?

Consider all those fair use factors together, and you see the problem with our hypothetical use of someone else's musical composition, right? For heaven's sake, be careful out there people!

See you next time with another issue of TBSB.