When a work is deemed to be "made for hire," the employer (and not necessarily the employee-creator of the work) is deemed to be the author and therefore owns all rights associated with the work under copyright law.
The Copyright Act defines work made for hire as:
"(1) A work prepared by an employee within the scope of his/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."
As the Copyright Act's definition indicates, not all works created by employees are works made for hire whose rights belong to their employers. Notably, a person could be an employee and create a work as a special job assignment, outside the scope of the employee's regular work. Under such circumstances, the work is not a work made for hire under the Copyright Act.
Courts also employ the "instance and expense" to determine if a work is a work made for hire.
This test considers the following factors: (1) at whose instance the work was prepared; (2) whether the hiring party has the power to accept, reject, modify, or otherwise control the creation of the work; and (3) at whose expense the work was created. In short, where a work was created at the hiring party's (or employer's) instance and expense, it will likely be deemed a work made for hire. Additionally, the Second Circuit has stated that this test is met where the "motivating factor in producing the work [is] an employer who induced the creation." An employer must also direct and supervise the manner in which the employee performs his or her work.
One way to rebut the assertion that a work was made for hire is to establish that the creator of a work was an independent contractor with no express agreement that the work done would be deemed a work made for hire and no assignment of rights has been agreed to. An author is likely to be deemed an independent contractor where he or she controls the manner of his or her work and incurs the expenses of creating the work independently. For example, the Supreme Court has held that an artist is an independent contractor where he supplied his own tools, worked without daily supervision, and had absolute freedom to decide when and how long to work. Moreover, California courts have held that a finding that the creator of a work receives royalties as a payment generally weighs against finding a work-for-hire relationship.
Even if a work is not deemed work made for hire, a party may still assert ownership claims over the work as a joint author.
[Last updated in April of 2022 by the Wex Definitions Team]