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In many cases we find publishers wait until after work on an assign

ment is underway or completed before presenting the author with a

work-for-hire contract. This is done even when no discussion of a

work-for-hire contract has taken place and the creator has never

previously done work for hire for the client.

In fact, some pub

lishers go so far as to put the work-for hire contract on the back

of a check.

The effect of this is to further attenuate the free

lancer's power to bargain.

Since payment is usually made 30 to

90 days after satisfactory completion of the assignment and sometimes not until publication, the photographer or other creator is faced with simply losing all the time invested in the

project if the work-for-hire contract is not signed.

We would therefore propose that this clause be amended

to read

as follows: "if the parties expressly agree in a written

instrument signed by them prior to the commencement of any

work that the work shall be considered a work made for hire."

B. WHO OWNS THE PHYSICAL WORK OF ART?

It is unclear under a work-for-hire contract who owns the

physical work that is created.

While the commissioning party

is the author for purposes of copyright, the copyright law does

not definitively determine whether the commissioning party or

the creator should retain ownership of the physical chrome,

illustration, manuscript, etc.

Section 202 provides that, "nor,

in the absence of

an agreement, does transfer of ownership of

a copyright or of any exclusive rights under a copyright convey

property rights in any material object."

However, work for

hire does not require the transfer of a copyright or an exclu

sive right, since the commissioning party is vested with the

copyright as an author.

original photography, art, and even manuscripts can be very

valuable.

There are thriving markets for original photography

and art.

Nor is there any compelling reason why parties using

work-for-hire contracts should own originals when parties using

all rights contracts do not.

Loss of the original is simply

the loss of yet another source of future income for the creator.

For this reason, we believe that the sale of an original should

have to be embodied in a written agreement.

We would therefore

modify Section 202 to read: "nor, in the absence of a written

agreement expressly conveying property rights in a material

object, does transfer of ownership of a copyright or of any

exclusive rights under a copyright or the entering into of an

express agreement in a written instrument that a work shall be

considered a work made for hire convey property rights in any

material object."

The states of California and Oregon have

enacted legislation to require a written transfer of originals when creators are selling reproduction rights.

C. WHO IS AN EMPLOYEE?

Another constant problem is the question of who is an "employee"

in clause (1) of the work-for-hire definition.

Essentially,

common law standards for distinguishing between an employee and an independent contractor must be used. This causes great

uncertainty, since each case must be determined on its own facts.

This issue is discussed in the recent case of Aitken, Hazen,

Hoffman, Miller v. Empire Construction Company, 542 F. Supp. 252,

257-58 (U.S. District Court, Nebraska) in which an architect was found not to be an employee of a commissioning party.

An employee who receives a salary knows that he or she is an

employee.

However,

someone paid on a fee basis or in royalty

form would not normally be aware that he or she might be an

employee.

For this reason,

clause (2) of the work-for-hire

definition requires a written contract if work is to be consid

[blocks in formation]

a salaried employee should always have to sign a written instru

ment in order to do work for hire.

Otherwise, the employer is

essentially gaining the benefits of being an employer under the

copyright law without fulfilling the obligations of being an

employer under the social security, income tax and related laws.

We would therefore change the clause (1) definition of work for

hire as follows: "A 'work made for hire' is (1) a work prepared by a salaried employee within the scope of his or her employment..."

D. WHICH CATEGORIES SHOULD BE STRICKEN?

We are basing the categories to be stricken from the clause (2)

definition of work for hire on the experience of our members,

as documented in our original submission to the Committee.

Thus, we would strike "as a contribution to a collective work",

"or other audiovisual work", "as a supplementary work", and "as

an instructional text".

In each of these categories, the creator

would be the author for copyright purposes.

We would move the definitions of "supplementary work" and

"instructional text" that appear in clause (2) into their appro

priate places in the main body of definitions in Section 101 (so

that "supplementary work" appears between "State" and "transfer

of copyright ownership" and "instructional text" appears between

"including" and "joint work").

As a matter of clarification, we would also want to limit the

meaning of the term "atlas" by defining it in the definitional

section as follows: "An 'atlas' is a bound collection of maps."

Otherwise, atlas can have a broader meaning and might include

a collection of pictorial representations of any subject - such

as

an atlas of the parts of the human body.

E. APPROACHING AN IDEAL SOLUTION

Striking certain categories from the clause (2) definition can

only be a first step, since neither creator nor publisher would

be satisfied by such a result.

The creator would simply face

"all rights" contracts in every category which had previously

been work for hire.

At the same time, the publishers would

face a 35-year termination right retained by creators that might

interfere with exploitation of projects in which the publishers

would reasonably expect to have a long-term interest because

such projects were very expensive to nurture or involve input

from many different sources (such as encyclopedias in the former case and some specialized textbooks in the latter). An ideal

solution to this tension would be to have the creator retain all

the rights which the publisher did not in fact use

and also to

insure that the creator is compensated for any uses by the pub

lisher beyond those originally understood between the parties

when they negotiated the consideration in their contract.

This ideal solution can be approached from a variety of directions. First, it is significant to go back to the earlier part of the copyright revision process. In the 1964 Preliminary

Draft for the revision of the copyright law, work for hire would not have included works prepared on commission. Moreover, under the termination provisions, any transfer except employee's work for hire would have been terminable within 25 years (or 20 years in the case of an un just enrichment). The wisdom of the concerns reflected by these proposals is borne out by our experience since the inception of the new law.

Another approach is to adopt certain presumptions as to what

the parties intended, such as those already present in Section 201(c) with respect to contributions to collective works when no express transfer has been made. Such presumptions follow what might reasonably be implied to be the needs of the respective parties.

It has been suggested that requiring the enumeration of all rights being acquired - with separate consideration for each right - would be of benefit in cases in which small independent works are being acquired to be used in larger works. This could

be joined with a principle of unconscionability much like that

in the 1964 Preliminary Draft that might look to the size of the

consideration in relation to the rights acquired in order to

permit the reformation of certain contracts.

Finally, the concept of limiting the commissioning party's exclusive license to reasonably contemplated uses at the time

of entering into the agreement could also be manifested in a

system which caused unexercised rights to either revert to the

creator or become nonexclusive after a certain period of time.

What was never contemplated was that publishers should be

positioned to receive windfalls by the acquisition of rights

that they did not contemplate using at the time payment for

commissioned work was agreed upon.

F. THE PROPOSED AMENDMENT

Our approach fuses many of the foregoing concepts based on our

experience with commissioned work for hire in the five years

since the copyright law took effect.

First, we would expand the presumptions of Section 201(c) to

cover other situations in which a larger work is made from

many different contributions. We would then impose certain restrictions and guidelines on what may be done in transactions regarding such contributions. Finally, we would add

termination provisions to deal with certain needs of the pub

lishers regarding these categories of commissioned works.

Our version of Section 201(c) would read as follows:

(c) Contributions to collective Works, Contributions to

Compilations, Supplementary_Works, Instructional Texts,

and Parts of Audiovisual Works.

Copyright in each sepa

rate contribution to a collective work, each separate

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