Work for Hire Agreements - Who owns what?
If you're a comic book fan, you've probably heard of the name Jack Kirby. Co-creator of popular comic book characters such as Captain America and The Incredible Hulk, Kirby is considered by many to be "one of the most important and prolific comic book creators of all time." While his creative impact is indisputable in the comic book world, the "ownership" rights of those beloved characters was brought to the forefront when, in September of 2009, the heirs of Jack Kirby, who had died five-years earlier, "served Marvel Comics with termination notices for 45 Kirby comics published by Marvel between 1958 and 1963."
The ramifications of the termination notice had the potential to be massively damaging as Marvel, the famous comic book publisher, had seen profits in billions from its movies starring many of the characters Kirby helped create. In response, Marvel filed a suit against the termination notice, and conversely the Kirby heirs, arguing that they were rightful "owners" of Kirby's comics since they were "works for hire."
Enacted in 1976, the Copyright Act aims to "protect a work from the time it is created in a fixed form." There is, however, a caveat to the law - "works made for hire."
The Copyright Act of 1976 defines a "work made for hire" in two parts:
- Work prepared by an employee within the scope of his or her employment; or,
- Work specially ordered or commissioned for use.
Work "specially ordered or commissioned for use," according to the law, can fall under 9 specific categories:
- 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 an answer material for a test
- As an atlas
Although, according to copyright.gov, "no precise standard exists for determining whether a work is made for hire," the U.S. Supreme Court attempted to further clarify the law in a decision handed down in 1989 when it ruled on Community for Creative Non-Violence v. Reid. In that particular case a sculptor who had been commissioned to sculpt a work was sued when he refused to allow the agency who commissioned the work to regain possession. The sculptor argued that the commissioned work was his intellectual property and, subsequently, he maintained the rights to the artwork. In its 1989 decision, the Supreme Court ultimately agreed with the sculptor.
In making their decision, the court also laid the groundwork for how to interpret important components of law. For example, the court decided that, for copyright law, the definition of "employee" differed "from the common understanding of the term." And though, according to copyright.gov, "the Court left unclear which [specific]…factors must be present to establish the employment relationship under the work-for-hire definition…most of these factors characterize a regular, salaried employment relationship…and that a work created within the scope of such employment is a work made for hire."
After losing in the lower courts, the Kirby family petitioned the Supreme Court, who ultimately decided to hear the case. Just days prior to hearing the case, however, Marvel and the Kirby family reached an agreement. Although the details of the agreement remain private, both sides undoubtedly walked away from the dispute happy to avoid further legal proceedings and the possible ramifications from a Supreme Court decision. And while it's impossible to provide compensation that is equal to Mr. Kirby's artistic contributions, it's likely the Kirby heirs received a hefty monetary package. Meanwhile, Marvel not only continues to use Kirby created characters, but avoids the swelling negative publicity surrounding the lawsuit and its beloved creator.
Most "work for hire" suits don't end quite as nicely as Marvel v. Kirby. It's imperative, whether you're a business owner or employee, that you're fully aware of your rights to the intellectual property you create or commission on behalf of your company. As we stated above, because "no precise standard exists for determining whether a work is made for hire," it's imperative that you work with legal counsel to address any copyright concerns before they arise. Do you have a written agreement that defines an employees’ scope of employment? Does your work fall under one of the nine special categories defined in the Copyright Act as under the specially ordered or commissioned for use?
With over 150 years of accumulative experience, the Houston business lawyers of Hendershot Cowart, P.C., are proud industry leaders in intellectual property law and litigation. Founded in 1987, our firm is more than equipped with the resources and talent to handle any complex legal matter involving intellectual property and trade secret protection, misappropriation and defense. If you're looking for a firm that relentlessly pursues the rights of our clients, please don't hesitate and contact us today for a consultation.