Initial Ownership and Section 201


Statute of Frauds:
A law which says that certain agreements must be evidenced by a writing in order to be enforceable in court. Among the agreements usually included are sales of land, agreements which cannot be fulfilled within one year, etc. The purpose of the statute is to prevent fraud and to provide a court some evidence with which to support its ruling.

Two items are said to be fungible if they are completely interchangeable and there is no reason to prefer one over the other. For example, each paper clip in a box of paper clips is perfectly fungible - you don’t really care which particular paper clip you pull out of the box.

The question of initial ownership is addressed in Title 17 U.S.C. §201. In order to establish a copyright, one needs to do nothing more than create an original work. See §201(a). As you may have come to expect in this course, the preceding sentence cannot stand on its own two feet. The question of creatorship is sometimes a difficult one to answer.

EXAMPLE: Chris is writing an art book. Chris spends several months collecting data, taking digital photographs, and writing about the art. He then prepares a “mock-up” of what he’d like the book to look like and brings it to Overnight Printing. Because the digital pictures he took were of varying resolution, and because the mock-up is rather sloppy, Brian, the owner of Overnight Printing, must do quite a bit of layout and art work to prepare the book for publication. Even though Brian does much of this work, Chris’ intellectual/conceptual contribution makes it more likely that he is the author than does Brian’s mechanical creation. See Adrien v. Southern Ocean County Chamber of Commerce, 927 F.2d 132 (3d Cir. 1991).

Even as that question is answered, others begin to appear. §201(b) addresses works for hire. §201(c) addresses collective works and §201(a) addresses joint works.

Works for Hire

The Adrien case, which expresses the majority view today, means that the actual, physical act of writing does not, in itself, mean the writer is the author for copyright purposes. Nowhere is this more clear than in “works for hire.”

§101 provides an extensive definition of works for hire, the ownership of which is covered in §201(b). In short, a work for hire is a work created at the behest of another. Anything created for an employer within the scope of employment is considered a work for hire, and the rights to that work automatically fall to the employer. While employment and agency law create some interesting problems here, the gist is clear.

EXAMPLE: Nation’s Best Paralegal School is looking for smart and witty attorneys to write material for their courses. Lowell is hired on a part-time basis to write their newest course and any other courses which they choose to develop over the course of his employment. No matter how original and creative his work, no matter how he sweats and toils, ownership of the final product will belong solely to Nation’s Best Paralegal School to do with as they please. It is a clear example of a work for hire.

If Lowell simply writes the course as an employee, even if Nation’s Best Paralegal School signs no contract with him, the work will belong to the school as a work for hire under §101(1). The default position under the law, however, is not the only option. Parties may contractually agree to vest copyright ownership in a manner other than that prescribed by law.

EXAMPLE: Warren Vezon is a famous musician asked to write a song for an upcoming film being produced by Renegade Film Co. Rather than write the song as a work for hire, Warren decides he would rather keep the rights to the song himself, thus preserving the ability to use it as he sees fit in the future and continue to profit from it. He therefore contracts with Renegade to write a song for their use, but specifying that he will retain all future rights to the song, and that the film company simply has the right to use it in their film and in any subsequent soundtrack album.

Note that works by non-employee independent contractors (such as Warren) commissioned for various purposes (including works to be used as instructional texts and works to be used in motion pictures) are works for hire only “if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.” If Warren simply writes his song, and Renegade has no signed contract with him specifying the “work for hire” nature of the work, Warren will maintain ownership of his song under §101(2), because he is an independent contractor.

So, for Lowell, the employee, the work produced becomes property of the employer, unless otherwise agreed. For Warren, the independent contractor, the work produced remains his property, unless otherwise agreed in writing. The leading case for determining whether we apply the §101(1) rule for employees or the §101(2) rule for independent contractors is Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) where the Supreme Court analysis of the general common law of agency led them to look largely at the extent and manner of control the hiring party had (in addition to a host of other factors) in order to determine whether Reid was an employee or an independent contractor.

In Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410 (7th Cir. 1992), the venerable Judge Posner addressed the further issue of the written agreement required by §101(2). Once it is determined that work was created not by an employee, but rather by an independent contractor, and when there is a writing, Posner found that the timing of the writing also played an important role in determining who owns the rights to the work.

"The requirement of a written statement regarding the copyright on a specially commissioned work is not merely a statute of frauds, although that is the purpose emphasized by the cases….That is, it is not only designed to protect people against false claims of oral agreements. If it were, then it might not matter when the statement had been made or signed… the signed-statement requirement in section 101(2) has a second purpose--to make the ownership of property rights in intellectual property clear and definite, so that such property will be readily marketable….The writing must precede the creation of the property in order to serve its purpose of identifying the (noncreator) owner unequivocally. It did not precede it here." - Nordisco at 412–413 (citations omitted).

We can therefore summarize works for hire as follows: Unless agreed otherwise, works created by employees in the scope of employment are the property of the employer. Works by independent contractors and falling within §101(2) belong to the contractor, unless there is a signed agreement to the contrary which precedes the work’s creation. 

Collective Works (§201(c)) & Joint Works (§201(a))

Unlike works for hire, there are few §101 issues with collective works (note that collective works are included in the list of categories for §101(2) works for hire). The concise definition provided in §101 is:

"A 'collective work' is a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole."

This must not be confused with joint works (covered in §201(a)), which are defined in §101 as follows:

"A 'joint work' is a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole."

According to §201(a), for joint works the co-authors are co-owners, even if their input is unequal. According to §201(c), for collective works there are multiple works and multiple rights holders. The crucial differentiation has nothing to do with the number of authors – a joint work might have many authors and a collective work might have only 2. Instead, we decide to apply §201(a) or §201(c) based on the parties’ intent.

EXAMPLE (1): Stan and Kyle decide to write a play about life in their small, mountain town. They agree at the outset that they will both be named as authors, and that they’ll split everything down the middle. This is a classic case of joint authorship.

EXAMPLE (2): Pete and Roger decide to write a song. Pete will write the music and Roger will write the lyrics. They agree to attribute authorship as follows: “Lyrics by Roger Malthead, Music by Peter Rainshed.” This is another classic case of joint authorship.

There is one important difference between these two examples of joint authorship. In the case of the play, the work done by the authors is “inseparable,” as the work done by each would have little, if any, meaning on its own. The song’s lyrics and music, though separable, are “interdependent,” and have been fully absorbed into a single work. In both these cases, the way in which the authors’ work is combined leads to the creation of a joint work – one which they must have intended to share as co-authors. See House Report. The question of intent is somewhat important here, in order to avoid undesirable consequences.

EXAMPLE: A scholar works closely with a researcher and an editor in order to produce a paper concerning the fungibility of wooden planks. While the work of these three is certainly inseparable, the scholar doubtless had no intention of creating a joint work with the others such that they would be considered co-authors sharing equally in ownership of the final work. See Weissmann v. Freeman, 868 F.2d 1313 (2d Cir. 1989).

Collective works are not integrated in the same way as joint works are. We again have multiple authors, but each author’s work can stand alone, separate from the whole. Each author will have ownership of her own component of the work, and the owner of the collective work will have limited rights to use the various portions which make up the whole.

EXAMPLE: Saul is a photographer who has done assignments for National Mapographic at various times over the past three decades. When he submitted his photos to the magazine, which included many other pictures as well as numerous fascinating articles, he was paid for the right to use the photos.

So far, we have a classic collective work. The magazine is an assembly of the work of many authors, and each author’s work is independent. Under §201(b), National Mapographic has the rights to the collective work, and Saul’s permission to use his work, but the rights to the photo remain Saul’s and Saul’s alone. National Mapographic cannot, for example, make posters of Saul’s various photos and offer them for sale, nor can it make postcards, neckties, coffee mugs, t-shirts, mousepads, or any other product bearing the images captured by Saul during his many adventures. The owner of the collective work has no rights other than those granted it – the right to use the underlying work in the collective work. What, then, if the magazine goes into a reprint? That would be permissible, but it does raise another issue, as seen below.

EXAMPLE: On the cusp of the new millennium, as technology races again of the law, National Mapographic decides to make further use of its old magazines, long since forgotten by the reading public. It scans the old issues into a computer and puts them on a set of CD-Roms. When each CD-Rom is inserted into a computer, an introductory, animated video is shown. The video includes one of Saul’s most famous snapshots, “Walrus Tusks at Midnight.” Although §201(c) gives the owner of a collaborative work the right to  revise the work and use the photo in “any later collective work in the same series,” this CD-Rom set is more than a mere revision. Because it constitutes a new collective work, National Mapographic may not use Saul’s photo without first seeking permission from the copyright holder, i.e., Saul. See Greenberg v. National Geographic Society, 244 F.3d 1267 (11th Cir. 2001).

Note that more trouble revolves around joint ownership than collective ownership simply due to the facts giving rise to joint ownership issues. Usually when parties collaborate on a project everybody is happy and friendly. Even when each individual’s role is not clear, parties rarely enter into formal agreements or explicitly discuss who will own what when the project is complete. When personalities clash, or as profits start coming in, disputes arise as to who gets what. This is precisely why it is always a good idea to advise clients to spell everything out from the start, even if in the form of a brief "deal memo", and thereby avoid trouble, heartache, and expense at a later time.