Works Made For Hire—When Should You Document an Agreement Covering Works Made for Hire?
In our previous post Who Owns What You Created?, we introduced the concept of “works made for hire” under the Copyright Act of 1976.1 Works made for hire are:
prepared by an employee within the scope of his or her employment; or
specially ordered or commissioned for use as . . . [one of nine specified categories of specially ordered or commissioned works], if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.2
Per (2) above, specially ordered or commissioned works require a "written instrument signed by them” to be considered a work made for hire. Courts currently disagree as to whether the agreement must exist before a work’s creation or may be executed afterwards. In this post, we explore the disagreement among the courts, as well as the impact of the August 2022 decision of the U.S. District Court for the District of Puerto Rico in Cortés-Ramos v. Martin-Morales.
Agreements in Advance . . . or Not?
The legislative history of the Copyright Act of 1976 contains 1965 testimony from the Register of Copyrights, where she explained “that her understanding of the legislation meant that a work prepared on special order or commission ‘would not be considered a “work made for hire” if the contract were signed later on – after the work was written, for example.’”3 The Seventh Circuit and Ninth Circuits follow this rationale.4 However, an influential copyright commentator argues against this bright line rule, writing
one can [] imagine claims involving parties each of whom knew of the unanimous intent among all concerned that the work for hire doctrine would apply, notwithstanding that some of the paperwork remained not fully executed until after creation of the subject work. In that latter circumstance, the bright line rule [that writing must precede creation] could frustrate the intent of the parties, and cloud rather than serve the goal of certainty.5
In the 1995 case Playboy Enterprises, Inc. v. Dumas,6 the Second Circuit cited the above argument, calling it “convincing.”7 Thus, the court wrote:
We therefore find that the 1976 Act requires that the parties agree before the creation of the work that it will be a work made for hire . . . [but] the actual writing memorializing the agreement [musn’t] be executed before the creation of the work. . . . [Instead] the writing requirement of § 101(2) can be met by a writing executed after the work is created, if the writing confirms a prior agreement, either explicit or implicit, made before the creation of the work.8
Twenty-four years later, in 2019, the Second Circuit reached an opposite result in Estate of Kauffmann v. Rochester Institute of Technology.9 In doing so, the Kauffmann court explained that Playboy indicated the kind of circumstance where a later writing would be acceptable: "'unanimous intent among all concerned that the work for hire doctrine would apply, notwithstanding that some of the paperwork remained not fully executed until after creation of the subject work.'"10 To the court, the specific circumstances of Playboy fit this rule, unlike the facts at issue in Kauffmann.
Playboy involved paintings created by an artist which appeared in "Playboy" magazine.11 Playboy paid the artist by check after receiving the paintings, and these checks had language at the endorsement line on the reverse of the check which Playboy argued met the work made for hire writing requirement upon the artist’s endorsement.12 The court agreed in the case of two of the endorsements,13 noting that by endorsing the checks the artist “may be assumed to have consented to a continuing practice whereby any works he sold to Playboy would be considered works made for hire” before he created the works.14
Kauffmann, on the other hand, involved magazine articles for which the writer and magazine executed a letter agreement after the articles were written purporting to classify the articles as works made for hire.15 When differentiating the letter agreement at issue in the Kauffmann case with the check endorsements in Playboy, the Kauffmann court explained that
the agreement alleged to satisfy the writing requirement [in this case] was not executed until five years after the year in which the [magazine] articles were written, and there [were] no circumstances even approaching the Playboy scenario of a series of writings executed by check endorsements right after payment for each work. [The agreement] is not "'paperwork [that] remained not fully executed until after creation of the subject work.'"16
In short, the letter agreement at issue in Kauffmann “was signed long after the works were created, and no special circumstances even arguably warrant[ed] applying” it.17 The same influential copyright commentator cited above opines that based on Kauffmann, “[o]nly future cases presenting comparable ‘special circumstances’ to those prompt endorsements [in Playboy] now seem to fall within the old rule validating an after-the-fact memorialization.”18
The Kauffmann Effect
What does all this mean for courts outside of the Second, Seventh, and Ninth Circuits? Thus far, only one court has cited Kauffmann: the U.S. District Court for the District of Puerto Rico, a First Circuit court, in the Cortés-Ramos v. Martin-Morales case.19 Here, plaintiff submitted a music video as part of a contest sponsored by Sony, with Ricky Martin performing the winning submission.20 Later, Martin released a music video the plaintiff claimed infringed the copyright in his contest video.21 Martin argued the plaintiff’s video was a work made for hire and thus Sony, not the plaintiff, owned the copyright.22
To determine whether the plaintiff’s video was a work made for hire, the court analyzed three documents related to his submission: a release, an affidavit, and the contest’s official rules.23 After submitting his video to the contest, the plaintiff signed and notarized the release and affidavit, both of which referenced the contest rules and to which the contest rules were purportedly attached.24 Neither the release nor affidavit contained language concerning the work made for hire status of the video plaintiff created. Instead, it was the contest’s official rules which explained that by entering the contest, a contestant agreed his or her submitted video was a work made for hire.25
As the court explained, no one signed the official rules, the one document with the work made for hire language.26 Additionally, only the plaintiff signed the release and affidavit, and these were not signed until after the video was created.27 The court believed this was significant, because “at least two courts of appeals [i.e. the Seventh and Ninth Circuits] have held that the writing establishing that a work is one made for hire must be signed before the work is created and another [i.e., the Second Circuit in Kauffmann] has held that is true as a general matter.”28 The court said it agreed with those courts requiring a signed writing before a work exists because doing so enhances the certainty and predictability of copyright ownership.29 However, despite expressing its views on the timing of the writing requirement, the court did not base its holding solely on these grounds.30 The plaintiff’s video was not a work made for hire also because both he and Sony did not sign a document saying it was.31
Where does this leave the writing requirement in the First Circuit? Even though the court in Cortés-Ramos referenced the Seventh and Ninth Circuits as well as Kauffmann, the Cortés-Ramos decision does not and cannot directly overrule previous First Circuit case law following Playboy and allowing a work for hire agreement to be signed after a work’s creation.32 To this end, note the language the Cortés-Ramos court quoted from Kauffmann, which was taken from Playboy:
“‘in some circumstances a series of writings executed after creation of the works at issue can satisfy the writing requirement’ so long as it “confirm[s] a prior agreement, either explicit or implicit, made before the creation of the work.’”33
Thus, it seems, the First Circuit has yet to completely back away from allowing work for hire agreements executed after the creation of the work at issue so long as there is other indicia of the parties' intent, whether explicit or implicit, that the subject work is a work made for hire.34 As for other courts outside of the circuits analyzed in this blog post, their case law would need to be analyzed to see which circuit precedent they follow.
Why Does It Matter if a Work is Made for Hire?
You may be asking yourself “Why does the status of a work as work made for hire even matter?” Basically, there are three reasons:
who holds the rights to the work;
what is the applicable term of copyright in the work; and
whether the right to terminate the transfer of copyright ownership in the work is available.
As explained previously, the rights normally available to a creator in and to a work under Section 106 of the Copyright Act are not afforded to the creator of a work for hire, unless the person/entity that requested the work for hire grants the creator an assignment or license. Furthermore, the term of copyright in a work made for hire lasts “95 years from the year of its first publication, or a term of 120 years from the year of its creation, whichever expires first,”35 whereas copyright in a work created by a single or joint authors endures for the life of the author (or last surviving author) plus 70 years.36 Finally, copyright law provides for terminating transfers of rights in a work after a period of years, but this right is not available in connection with works made for hire.37
What This Means for Creators of Copyrightable Works: Get It in Writing and in Advance
In sum, knowing whether a work is one made for hire before its creation makes “ownership of intellectual property rights clear and definite.”38 And even though under certain circumstances some courts may hold post-creation work for hire agreements to be valid, it is advisable for parties to execute the written agreement before a work is created to avoid issues down the road. In the absence of a written agreement executed prior to creation of the subject work, the parties may be forced to rely upon or establish further evidence of intent with regard to the status of a work as work made for hire. This could leave the door open to future disputes concerning valid copyright ownership, duration of copyright, and the availability of termination rights.
For More Information
If you have questions about the copyright status of a creative work as work made for hire or need assistance with drafting documentation involving works made for hire, please contact us to learn more about our copyright and transactional legal services.
[1] Note that this blog post only discusses domestically produced works made for hire under the Copyright Act of 1976. This post does not deal with works made for hire under the Copyright Act of 1909 or international law.
[2] 17 U.S.C. § 101.
[3] Playboy Enters. v. Dumas (Playboy I), 831 F. Supp. 295, 314 (S.D.N.Y. 1993) (citation omitted).
[4] See Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410 (7th Cir. 1992); Gladwell Gov’t Servs. v. Cty. of Marin, 265 F. App’x 624 (9th Cir. 2008).
[5] 1 Melville B. Nimmer and David Nimmer, Nimmer on Copyright § 5.03[B][2][b] (2022).
[6] Playboy Enters. v. Dumas (Playboy II), 53 F.3d 549 (2d Cir. 1995), cert denied, 516 U.S. 1010 (1995).
[7] Id. at 559.
[8] Id. Both parties or their agents must sign the agreement per § 102(2). Id.
[9] 932 F.3d 74 (2d Cir. 2019).
[10] Id. at 78 (quoting Playboy II, 53 F.3d at 559).
[11] Playboy II, 53 F.3d at 551.
[12] Id. at 553, 558; see also Playboy Enters. v. Dumas (Playboy I), 831 F. Supp. 295, 300-01 (S.D.N.Y. 1993).
[13] Playboy II, 53 F.3d at 560. The endorsements held to meet the writing requirement of § 101(2) were as follows:
Any alteration of this legend agreement voids this check. BY ENDORSEMENT, PAYEE: acknowledges payment in full for services rendered on a work-made-for-hire basis in connection with the Work named on the face of this check, and confirms ownership by Playboy Enterprises, Inc. of all right, title and interest (except physical possession), including all rights of copyright, in and to the Work.
Any alteration of this legend agreement voids this check. IT CONTAINS THE ENTIRE UNDERSTANDING OF THE PARTIES AND MAY NOT BE CHANGED EXCEPT BY A WRITING SIGNED BY BOTH PARTIES. BY ENDORSEMENT, PAYEE: acknowledges payment in full for the services rendered on a work-made-for-hire basis in connection with the Work named on the face of the this check and confirms ownership by Playboy Enterprises, Inc. of all right, title, and interest (except physical possession), including all right of copyright, in and to the Work.
Id. (emphasis added).
[14] Id.
[15] Kauffmann v. Rochester Inst. of Tech., 932 F.3d 74, 75, 77 (2d Cir. 2019).
[16] Id. at 78 (quoting Playboy II, 53 F.3d at 559).
[17] Id. at 75.
[18] 1 NIMMER, supra note 5, at § 5.03[B][2][b].
[19] Civ. No. 21-1374 (SCC), 2022 U.S. Dist. LEXIS 140897 (D.P.R. Aug. 8, 2022). Maine federal courts are a part of the First Circuit. U.S. Ct. of Appeals for the First Cir., About the Court, https://www.ca1.uscourts.gov/about-court (last visited Sept. 15, 2022).
[20] Id. at *3.
[21] Id. at *8.
[22] Id. at *8, 10.
[23] Id. at *3-5.
[24] Id. at *3-4, *14-21.
[25] Id. at *4.
[26] Id. at *11.
[27] Id. at *12.
[28] Id. (emphasis in original).
[29] Id.
[30] Id. at *11-13.
[31] Id.at *12-13.
[32] See TMTV, Corp. v. Mass Prods., Inc., 345 F. Supp. 2d 196 (D.P.R. 2004), aff’d on other grounds, 645 F.3d 464 (1st Cir. 2011). See also TMTV, Corp. v. Mass Prods., Inc., 453 F. Supp. 2d 378 (D.P.R. 2006) (denying defendants’ motion for summary judgment that plaintiff’s post-creation work made for hire agreements with scriptwriters were invalid because, inter alia, it was the scriptwriters “understanding from the very beginning that their written work” were works made for hire); Homeowner Options for Mass. Elders, Inc. v. Brookline Bancorp, Inc., 754 F. Supp. 2d 201, 208 (D. Mass. 2010) (noting that “[a] writing executed after the work's creation that confirms a prior agreement may suffice but it must mention a ‘work made for hire’ relationship and must be signed by both parties) (emphasis added); 108 Degrees, LLC v. Merrimack Golf Club, Inc., Civ. No. 09-cv-298-JL, 2010 U.S. Dist. LEXIS 28560, at *7 (D.N.H. Mar. 25, 2010) (“To satisfy § 101, the ‘writing must precede the creation’ of the copyrighted work . . . or at the very least must ‘confirm[] a prior agreement, either explicit or implicit, made before the creation of the work.’") (emphasis added) (citations omitted).
[33] Cortés-Ramos, 2022 U.S. Dist. LEXIS 140897, at *12.
[34] See also Playboy Enters. v. Dumas (Playboy II), 53 F.3d 549, 559 (2d Cir. 1995) (post-creation work made for hire agreement acceptable when there is "'unanimous intent among all concerned that the work for hire doctrine would apply, notwithstanding that some of the paperwork remained not fully executed until after creation of the subject work'") (quoting 1 NIMMER § 5.03[B][2][b] (1994)).
[35] 17 U.S.C. § 302(c).
[36] Id. § 302(a)-(b). In the case of joint works, duration is measured from the death of the last surviving author. Id. § 302(b).
[37] See id. § 203(a)(3).
[38] Playboy II, 53 F.3d at 559.
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