December 9, 2019

December 09, 2019

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If It's Worth It, You Should Work It (As a Work Made for Hire)

With the growth of mobile apps, non-tech companies face the challenge of creating apps to promote and sell their services or goods. Because the creation of an app can be a one-time project, hiring an independent software company or a freelance software engineer might make more economic sense than hiring salaried employees to complete this singular task. However, this economic solution may raise legal questions regarding the nature of ownership in the mobile app created. These same questions arise outside the mobile app space - in fact, they are present any time a company hires an independent contractor to create copyrightable works for the company.

To avoid this issue altogether, companies looking to hire third parties should have written agreements that explicitly state that a company owners the third-party-made work. Two instruments that companies can use to obtain ownership of third-party made works are a "work for hire agreement" and an assignment. 

A work for hire agreement is the preferred instrument for obtaining ownership of works that qualify as a "work made for hire" under Section 101 of the U.S. Copyright Act. Under the Copyright Act, a work made for hire includes "specially ordered or commissions for use (1) as a contribution to a collective work, (2) as part of a motion picture or other audiovisual work, (3) as a translation, (4) as a supplementary work, (5) as a compilation, (6) as an instructional text, (7) as a test, (8) as an answer material for a test, or (9) as an atlas." If a work does not qualify as a work made for hire under the Copyright Act, companies may obtain ownership of the third-party-made work by way of an assignment. Written agreements between a company and independent contractors would, therefore, benefit from including a fallback assignment clause - in the event that a court (in later litigation) deems the work as a work for hire.

When a company has the choice of obtaining ownership via a work for hire agreement or an assignment, a work for hire agreement is encouraged. This is because a work for hire agreement cannot be terminated. An assignment - even if it includes language that the transfer is non-revocable - may be terminated by the author of the work, under Section 203 of the Copyright Act. This little-known provision allows the work's author (or, if dead, his or her heirs) to reclaim ownership of a copyright, as early as 35 years after, and as late as 40 years after an assignment was made.

Accordingly, a bit of thought and planning at inception can go a long way in ensuring that works created to your specifications are actually owned by the proper entity. 

© 2019 Sterne Kessler

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About this Author

Ivy Clarice Estoesta, Mechanical Design Attorney, Sterne Kessler Law Firm
Associate

Ms. Estoesta is an associate in the Mechanical and Design practice group at Sterne Kessler.  Ms. Estoesta’s practice focuses on trademarks, design patents, and copyrights.  Her legal experience, which began at the firm, and academic background provide her a multidimensional perspective in securing comprehensive IP rights for an array of clients in various industries, including pharmaceuticals, dietary food and beverages, footwear, electronic devices, and household cleaning products.

Ms. Estoesta joined the firm in 2006 as a legal assistant in...

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Monica Riva Talley, Trademark Attorney, Sterne Kessler, Law Firm
Director

Monica Talley brings more than 17 years of experience protecting some of the world's most recognizable brands to her role as a Director in the firm’s Trademark practice.  Ms. Talley specializes in strategic trademark counseling and portfolio management, developing anti-counterfeiting solutions and strategies, and trademark enforcement. 

Ranked as one of the leading trademark prosecution and strategy attorneys in Washington, DC, Ms. Talley is particularly noted for her global brand protection and commercialization strategies, and is lauded by clients for utilizing “her broad IP savvy to procure fantastic short and long-term results” (World Trademark Review 1000, 2012 and 2013).

202-772-8688