“Work Made for Hire” Pitfalls for Independent Film Makers
The Situation
You’re an independent film maker and you need to hire talent, a cinematographer, an editor, and other skilled individuals whose jobs entail potential creative input. However, you’ve heard that if someone makes a creative contribution to a work (i.e., your film), they might have rights in the result, even though they were hired and paid by you.
Your Solution
After a little research, you find out about the concept of “work made for hire,” grab a contract off the internet, and make everyone affiliated with the project sign a copy.
You think you can rest easy, but if you are operating under California law, you shouldn’t.
What You Got Right
Let’s look at what you got right. First, under U.S. copyright law, 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.” And although recent precedent establishes that an actor’s performance cannot be used as the basis for establishing copyright claims in a film (see Garcia v. Google, Inc.), your instinct to seek a transfer of any copyright interest creative contributors might have in your film was correct. Failure to enact these transfers could have made it nearly impossible to obtain errors & omissions insurance down the road, thus thwarting any chances for distribution of your film. Plus, sometimes even legal precedent fails to stop determined or desperate plaintiffs, so just because the law is on your side doesn’t mean someone can’t sue and force you to defend against a lawsuit.
Second, your instinct to get these transfers in writing instead of orally was also on point because under copyright law “a transfer of copyright ownership…is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed…”
What You Got Wrong
The problem lies with the language in your contracts and how it triggers some onerous California labor and employment law requirements.
The Copyright Act defines two instances when a “work made for hire” exists:
- when a work was “prepared by an employee within the scope of his or her employment,” or
- when a work is “specially ordered or commissioned…” and accompanied by a signed written agreement stating that the work is a “work made for hire.”
Any type of work prepared by an employee will be a work made for hire, but only nine types of works can be “specially ordered or commissioned” works made for hire; motion pictures or other audiovisual works are on the list. As a result of these rules, the employer or person commissioning the work is considered the sole “author” and therefore owns and controls the work for the entire duration of its copyright.
Sounds great, right? Now, let’s look at how your solution could go terribly wrong.
More likely than not, all of the creative contributors to your film are working as independent contractors and not as employees. Unknowingly, you have created employment relationships under California law by including work made for hire language in your written agreement, even though only independent contractors are involved.
Although the Copyright Act distinguishes between employees and commissioned authors, California Labor Code § 3351.5(c) and Unemployment Insurance Code §§ 686 and 621(d) define an employee as any person engaged by contract for the creation of a specially ordered or commissioned work of authorship.
The result: everyone you hired as independent contractors may be entitled to minimum wage, overtime, back taxes, penalties and interest. And because you are now considered an “employer,” you are required to register with the EDD, maintain workers compensation and unemployment insurance, and post specific notifications to your “employees.” While these requirements come with the territory of running a major film company, the overhead and administrative costs of having employees are too much for most independent film makers.
What Is the Real Solution?
The best solution is to get rid of the work made for hire language in your agreements and replace it with a copyright assignment clause. Also, the California Labor and Unemployment Insurance work made for hire-related codes apply to individuals and not entities, so in situations where you are dealing with more savvy creative contributors with loan-out companies, you could commission the work from the entity as a work made for hire and not worry about triggering any employment requirements.
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