Legal Pad: Creativity For Sale

For better or worse, a record deal consists of a handful of certainties.  One such certainty is that your label, whether major or indie, will own the sound recordings created under your deal.  But can a label own your music’s copyright?  In most instances, the answer is “no,” but this is not always the case.  In a September 2010 decision, the U.S. District Court for the Southern District of New York held that the estate of Bob Marley did not hold the copyrights to music contained in five of Marley’s most popular records.  The legal basis: Marley signed a contract providing that his albums were the “absolute property” of his record label.  Essentially, the court determined that his albums, and the underlying compositions they contained, were “works made for hire” under the United States Copyright Code.

In the realm of creative employment, collaborations, compilations and binding contracts, you need to know the difference between retaining your legal rights to compositions and giving away the farm.  You need to know the basics of “works made for hire.”

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A “work made for hire” is a term of art – part of the United States Copyright code that does not abide by the traditional creative ownership standards of copyright law.  A work made for hire is owned by someone separate from its creator, defined as a work (1) prepared by an employee within the scope of his or her employment; or (2) specially ordered or commissioned, if the parties expressly agree in a written instrument signed by them that the work shall be considered a “work made for hire.”  While these two definitions seem easy enough to understand, the differences are not always black and white, as illustrated in the case of Bob Marley.  Here’s a breakdown of the definitions:

Created Within the Scope of Employment:  Essentially, if you create something as a duty of your job, your employer owns the rights to what you have created, so long as it’s within the “scope” of your employment.  For example, if you work in-house to create jingles for a local ad company, you likely do not own the copyrights to the music you create.  But if, on the other hand, you compose a rock opera in your spare time, your employer wouldn’t own this, as it is not within the “scope” of your employment.  Bottom line:  If you’re in a creative field and also work for yourself (i.e. play in a band, write music for others), make sure to check your employment agreement to lock down what is and isn’t under your “scope” of employment.

Specially Ordered or Commissioned:  In order for a “work made for hire” to classify under this prong, the work must come within one of the nine limited categories of works: (1) a contribution to a collective work, (2) a part of a motion picture or other audiovisual work, (3) a translation, (4) a supplementary work, (5) a compilation, (6) an instructional text, (7) a test, (8) answer material for a test, (9) an atlas.  In addition, it must include the following requirements:

(A) A written agreement stating that the commissioned work is a “work made for hire.”

(B) Both the creator and the person ordering or commissioning the work sign the agreement.

If a work falls within one of the nine categories above, but is not accompanied by a written agreement and signed, it is not a “work made for hire” and the creator owns the copyright.  Any time you’re submitting work to others on a contractual basis, for a compilation, soundtrack, etc. you’ll want to check the fine print first for a “work made for hire” provision.

So how does any of this affect the bottom line? First is control, both creatively and financially.  Unlike your own composition, a “work made for hire” is now the property of another entity or individual.  Meaning, they can alter it, sell it, or bury it.  With a “work made for hire,” you have no more right to the composition you created than you do to The Beatles’ “Come Together.”  In the long term, this may result in loss of an important intellectual property right and (perhaps more significantly) loss of a considerable revenue stream.  The second consideration relates to the copyright term.  Copyright protection of a “work made for hire” is 95 years from the date of publication or 120 years from the date of creation, whichever expires first.  This differs from life of the author plus 70 years, the current standard for copyrighted works – an important provision if you are the party on the receiving end of a “work made for hire.”

DISCLAIMER: The information contained in this column is general legal information only and should not be applied to any specific factual situation. Please consult an attorney for all of your important legal considerations.

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