If you’re working with others on projects where intellectual property (IP) may be developed in the process, you’ll likely want to take into account issues of joint authorship and the work for hire agreement. These are complex, multifaceted topics. In this blog post, we’ll explain some of the fundamentals, and share a few examples of cases where these issues may be involved.
Joint Authorship Scenarios
Title 17 of U.S. Code §101 outlines U.S. copyright law. It defines joint work as “[a] work prepared by two or more authors with the intention that their contributions will be merged into inseparable or interdependent parts of a unitary whole.”
The legal requirements for co-authorship are that the contributions are independently copyrightable, and there is mutual intent to create a joint work. Joint work is owned equally by all of its authors.
In a joint authorship scenario, absent an agreement between the authors, you and the other author(s) have complete ownership of the work. According to Diana Torres of Kirkland & Ellis LLP, “It’s always a bad idea to have joint works of authorship… but if you do, all of you own that work … and you could [all] license it … and have all kinds of competing licenses.” Joint authors can sell the joint work in the same country or even different countries. The only time that joint authors may not be able to do what they want regards infringement – an infringer can’t go to one of the authors and request a retroactive license.
Joint authors each have a complete ownership of the work. Here are several scenarios demonstrating how it works:
Scenario 1
You’re developing a video game – the characters, the source code, or some other aspect – and some other person on your team may be developing the music. The intended goal is a final product merged with each team members’ efforts. You should both be considered joint authors of this video game.
Scenario 2
You’re the owner of a software business. You’re a bad illustrator, so you hire your roommate to sketch an illustration for you. You add the sketch to your software program and meet your deadline, and launch your product. A year later, the software is a hit, and you’re living in a posh house, while your roommate who drew you the illustration is still in the same apartment. She sends you a letter demanding royalties. She isn’t entitled to royalties, because she isn’t a joint author of the primary work – you didn’t intend for your work to be merged as one. Arguably, your roommate gave you a license to the illustration, but she isn’t entitled to a share of the royalties.
Joint authors each have a complete ownership of the work.
Scenario 3
Let’s say, instead, that you started a software company with your roommate. This, on the other hand, is a joint authorship, and your roommate would be entitled to royalties.
Scenario 4
You and your roommate started a software company together (joint authorship). Your ex-roommate gets a new roommate. The new roommate gets ahold of your company’s source code and creates a competing app without anyone’s permission. You sue the new roommate for $10 million. Your ex-roommate likes her current roommate, so she offers him $1 million and a license for the work. Thankfully, in many courts these days, one author can’t retroactively give a license out to a third party to help get them out of an infringement claim by another author.
Work for Hire Agreement Scenarios
Works for hire are also defined in Title 17 of U.S. Code §101. A work for hire is work prepared by an employee within the scope of his or her employment. Such work is specially ordered or commissioned for use in specific contexts, in which a signed, written agreement is made:
- Contribution to a collective work
- Part of a motion picture or other audiovisual work
- A translation
- A supplementary work
- A compilation
- An instructional text
- A test
- Answer material for a test
- An atlas
Work For Hire Agreement Scenario
Here’s a scenario in which you may use a work for hire agreement:
- You start a software company and hire a freelance coder to help you code while you focus on business development. Your agreement is an exchange of text messages and you agree to pay his invoices. In this case, the freelance coder owns the copyright.
If you have a written agreement saying the coder is doing the work for you and you own it, the freelance coder still owns the copyright. Source code is not something for which you can have a work-for-hire agreement.
A work for hire is work prepared by an employee within the scope of his or her employment.
If you can categorize that source code as being part of a collective work, for an audiovisual work, or part of a compilation or translation, then you will own the copyright. Another way to own the source code is to have the agreement contain an assignment, which transfers rights to another person. The person creating the code can say, “yes, this is a work for hire to the extent that it can be a work for hire, and the extent to which it cannot be a work for hire, a copyright can be granted to all of the things I do for you.” That’s one way to get around the bizarre work for hire limitation.
When Should You Sign a Work For Hire Agreement?
Work for hire agreements should be signed in advance, and should have back-up assignment language. The assignment may not be necessary, but it’s better to be safe than sorry!
Regardless of whether you’re engaged in a joint work or a work for hire, it’s important to know about the legal ramifications of each. You can view Diana Torres’ lecture from ‘The Entrepreneurs Guide to IP’ lecture series for more on this topic here. Adapted from Michelson IP curriculum, the course is offered through the University of Southern California’s Greif Center for Entrepreneurial Studies, in the USC Marshall School of Business.
Disclaimer: Nothing in this article shall be construed as legal advice, or as creating an attorney/client relationship.
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The Michelson Institute for Intellectual Property, an initiative of the Michelson 20MM Foundation, provides access to empowering IP education for budding inventors and entrepreneurs. Michelson 20MM was founded thanks to the generous support of renowned spinal surgeon Dr. Gary K. Michelson and Alya Michelson. To learn more, visit 20mm.org.