Work for Hire: What Is It?

Employees discuss work project in the office — Photo:
Thomas Barwick / Getty Images

Work for hire is a concept from U.S. copyright law that grants ownership of copyrighted material to a company rather than an individual employee. Work created by an employee in the context of their standard workday is generally covered by work-for-hire law, as are many commissioned works completed by independent contractors.

Here's what you need to know about how work for hire could affect your business.

What Is Work for Hire?

Work for hire covers the legal ownership of copyrighted material. Generally speaking, when one entity (usually a business) hires someone (like an employee) to create something, then the work created belongs to the hiring entity, not the person who actually created it. Therefore, most work that an employee creates on the job is covered by work-for-hire law.

Alternate name: Work made for hire
Acronym: WFH

Note

Taking an intellectual property (IP) dispute to court can be difficult unless you have created a work-for-hire agreement with your creative staff.

How Does Work for Hire Work?

It's important to understand work for hire before you hire a creative employee or contractor. Creative work is a common source of copyright disputes, so do all you can to ensure you've protected yourself. Put your understanding in writing and have the employee or contractor sign it before beginning the work.

Note

The work-for-hire concept is an exception to copyright law. Under most normal circumstances, the copyright for a piece of work is owned by the creator.

How It Applies to Employees

The application of this concept is fairly simple when it comes to employees. For the most part, any work done by an employee is the property of the employer. For example, if an engineering firm hires an engineer to create software or hardware, the work-for-hire concept is in force, and the creations of the engineer are the property of the company. As long as the work is created in the scope of what an employee was hired to do, then it's covered by work-for-hire law.

How It Applies to Commissioned Works

The concept of work for hire and ownership of work extends beyond work done by employees. Commissioned works—typically done by an independent contractor—are also covered by work-for-hire law. Since the contractor's relationship with the company is more complex than the employee's relationship, the legal text covering this aspect of work for hire is more specific. It states a number of circumstances under which work-for-hire law applies.

The text of the law states that WFH applies to work specifically ordered or commissioned for use as:

A contribution to a collective work
A part of a motion picture or other audiovisual work
A translation
A supplementary work (like an editorial note or illustration in someone else's work)
A compilation
An instructional text
A test
Answer material for a test
An atlas

Note

This WFH understanding has to be explicitly written into a contract that's signed by both the employer and the contractor. While WFH is applied to employee work by default, it must be written and signed for it to apply to contract work.

Work for Hire and Patents

The scenarios covered so far apply only to issues of copyright ownership. Issues of patent ownership are a little more tricky. Copyright law allows corporations to be the author of a copyrighted work, but corporations cannot be inventors (someone who creates a patented product). However, it gets even more complicated, because while corporations can't be inventors, they can own patents.

For example, a company could own a patent for a new kind of software product, but the inventor listed on the patent would be the actual person or people who created the software. The inventor assigns ownership of the product to the company, but they're still acknowledged as the inventor.

Both parties involved in the creation of patented works should be absolutely clear about who will own the patent before any work begins. This relationship should be clarified with both contractors and employees.

Note

As you can see, these types of situations can become complex, difficult, and unique. Get an IP attorney (or a patent agent) who works specifically in the area you need help with to make sure the understanding is as clear as it can be.

Why a Written Contract Is Necessary

The work-for-hire question is another reason why it's important to put every agreement into writing. Unwritten assumptions can come back to bite you. Employees, in particular, don't always understand the concept that their work is your property, so having them sign a contract helps make it clear who owns what.

Employee ownership rights can be further expanded or restricted by an employment contract. Depending on the way you word the contract you give your employees, you could give them more rights than WFH covers. You could also make it abundantly clear in a contract that everything they do during work hours will be ultimately owned by the company; that ensures there won't be any confusion about who owns what.

This is also an example of why it's so important to clarify the working relationship you have with people who work for your company. The line between an employee and an independent contractor can become blurry, and it sometimes comes down to a case-by-case basis. This can have profound impacts on your business, beyond copyright issues, so you must clarify the relationship with the worker in question.

Key Takeaways

Work for hire is a concept that covers copyright ownership in cases where a worker makes something for a company.
In general, all the copyrighted work an employee creates on the job is owned by the company.
With independent contractors, there are more variables, but a company will still own the copyright in many cases as long as its specifically addressed in the contract.
Patents are a trickier issue. A company cannot be an inventor, but it can own patents, depending on the contract that covered the work in question.

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