When you contract an online freelance programmer, is his work "made for hire" in eyes of © law? Please read...?

[cumhea]

My question for IP attorneys is this:

Background: When you look up "freelancer" on Wiki, it actually talks about 2 different types of freelancers. One of them is actually an "independent contractor" where the work is created according to the customer's specs (like when hiring a freelance programmer online at elance etc). It then says that in those situations, the programmer has no copyright to the works since they are written as works made for hire, a category of IP defined in the commonly touted US copyright law--17 USC Section 1. HOWEVER, that section of law explicitly lists 9 categories a work must fall under in order to actually be considered "works made for hire". So, can one of you tell me which of the following categories of works freelancers contracted to do "programming" would fall under? Here they are...

Under the US Copyright Act, a "work made for hire" is defined as:

"(1) a work prepared by an employee within the scope of his or her employment (THEY'RE NEVER AN EMPLOYEE if you just hire them as a freelancer or independent contractor, right? ...so then the 9 groups follow); or (2) a work specially ordered or commissioned for use 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 answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire."

(17 U.S.C. § 101; emphasis added.)

I know many say you should be sure to add a clause in the contract that specifies that the work will be considered "made for hire" and parties must agree etc. However, all that's for naught if they don't fall into one of the 9 right? In the end I just need to know the best way to ensure we/the client (not "employer" of course) holds the © when we hire freelancers). Thanks!

[morcan]

No, as you have discovered, unless the programmer is your "employee", it is not really possible to call his creation a "work made for hire" (WMFH), for which YOU, the client, would be the legal author. It might qualify as a "compilation", but only if the programmer doesn't write any "new material."

Computer programs do not generally fall into ANY of the statutory categories for commissioned WMFH and therefore, simply calling it that still won't conform to the statute. Many otherwise diligent senior attorneys simply ignore this, having done independent contracts based upon the copyright laws prior to the 1976 revisions (which basically centered on "control" of the creativity).

Therefore, you can certainly have a written WMFH agreement (for what it's worth) that expressly outlines the INTENT of the parties that you be the "author and owner of the copyright" of the commissioned work, but you still need a (separate) transfer and assignment of all right, title and interest of the contractor's copyright of any and all portions of the works created under the project, which naturally arises from his or her being the author of the WMFH. If the contractor was given detailed specs, there is also the possibility that you, the client, would be a joint owner of the copyright of the program independently created to those specs, or that the program is a "derivative work". But that assumes you have collaborated more closely than the typical non-programmer customer.

Under CCNV v Reid, the US Supreme Court stated that "only enumerated categories of commissioned works may be accorded work for hire status." 490 US at 748 (1989).

Therefore, to the extent that ANY of the programmer's work falls outside of all of those categories, he or she is the legal "author" (initial owner of the copyright). The only way YOU could obtain the copyright would be via a signed, written transfer of his or her ownership of that copyright to you, which may be recorded in the US Copyright Office if necessary. There are interesting issues based upon the fact that the legal duration of the copyright is based upon the author's life, not the creation date (as would be the case for works by an employee), and also issues of revocable transfers, among other things.

I have actually seen major corporate acquisitions get scuttled because someone at the target software company had "contracted programmers" under WMFH agreements but failed to obtain the necessary written transfer of the contractors' copyrights. That meant that the company was selling software for which it did not legally own all the copyrights. Some investors may have a problem with that.