Why “Work Made for Hire” Is Not Enough

Businesses routinely hire outside professionals to create logos, brand identities, websites, software, photographs, and other original content. The engagement agreement usually states that the resulting material is a “work made for hire” owned by the client, and most parties assume those words settle the question of ownership. They may not.

Under United States copyright law, calling commissioned work a work made for hire does not make it one. When the creator is an independent contractor, the work must also satisfy specific statutory requirements, including placement within one of nine categories identified by Congress. An agreement containing nothing more than a work-made-for-hire declaration may leave the contractor owning the copyright, whatever the parties intended.

A properly drafted agreement addresses that risk through a present assignment of copyright. The distinction matters most for businesses commissioning design, branding, website, and software work. In California, it matters for a second reason as well, one that has nothing to do with copyright at all.

Two Paths to Work-Made-for-Hire Status

The Copyright Act recognizes two types of works made for hire under 17 U.S.C. § 101.

The first is a work prepared by an employee within the scope of employment. The nine-category restriction does not apply to this path. Whether someone is an “employee” for copyright purposes is determined under federal common-law agency principles, not by the label the parties use in their contract. The analysis looks to the actual working relationship, including the hiring party’s right to control the manner in which the work is done, the method of payment, the provision of employee benefits, and the tax treatment of the creator.

The Supreme Court articulated this framework in Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989). A contract that calls a freelancer an “employee,” or the client an “employer for hire,” will not override the substance of the relationship.

The second path applies to work created by an independent contractor. Such a work qualifies only if three conditions are met: the work is specially ordered or commissioned; the parties expressly agree, in a written instrument signed by them, that it will be considered a work made for hire; and the work is intended for use as one of the following:

1. A contribution to a collective work;

2. Part of a motion picture or other audiovisual work;

3. A translation;

4. A supplementary work;

5. A compilation;

6. An instructional text;

7. A test;

8. Answer material for a test; or

9. An atlas.

These categories are exclusive. If commissioned work does not fit within one of them, the parties cannot create work-made-for-hire status simply by agreeing to it.

Why Design and Website Work Create Particular Risk

The statutory list does not mention logos, brand identities, standalone illustrations, graphic design, user-interface design, website design, or computer programs. A particular deliverable may still qualify because of its intended use, for example as a contribution to a collective work, a compilation, an audiovisual work, or a supplementary work. That conclusion depends on the nature and contemplated use of the specific work, and it should not be assumed merely because the contractor created the work for a larger project.

A website illustrates the problem. It may combine source code, text, photographs, illustrations, animation, video, page layouts, icons, and other independently protectable elements. Some may fit a statutory category; others may not. A freelance designer’s logo does not become a work made for hire merely because it appears on the site. Software presents a related difficulty: it is generally treated as a literary work, and “literary work” is not itself one of the nine commissioned-work categories.

Payment alone does not transfer copyright. Neither does delivery of the working files, nor ownership of the physical or digital copy in which the work is embodied. Under 17 U.S.C. § 202, ownership of a copyright is legally distinct from ownership of any material object embodying it. Without work-made-for-hire status or a valid assignment, the creator ordinarily owns the copyright, and the client holds at most an express or implied license.

That result can prevent the client from freely modifying, licensing, registering, or enforcing the work. It also tends to surface at the worst possible moment, during a financing, an acquisition, or an infringement dispute, when someone finally asks to see the chain of title.

The Assignment Backstop

A well-drafted ownership provision therefore works on two levels. It first states that qualifying work will be treated as a work made for hire. It then provides, in substance:

The second sentence is not redundant. It is written for precisely the situation in which the first fails.

Copyright initially vests in the author under 17 U.S.C. § 201(a), but § 201(d) permits its transfer. Section 204(a) requires a writing signed by the owner of the rights conveyed, or by that owner’s duly authorized agent. The clause quoted above identifies the parties and the subject matter. “Hereby assigns” operates as a present conveyance, and “all right, title, and interest” signals complete ownership rather than a limited license.

No particular formula is required. The Ninth Circuit has held that a transfer document needs no “magic words,” and that a one-line statement may satisfy § 204(a) when it clearly demonstrates an intent to transfer copyright. See Radio Television Española S.A. v. New World Entertainment, Ltd., 183 F.3d 922, 927 (9th Cir. 1999) and Effects Associates, Inc. v. Cohen, 908 F.2d 555, 557 (9th Cir. 1990). The rule is forgiving about form, but not about substance. The writing must still be definite enough to serve as a guidepost if a dispute arises, and in both of those cases the court found no adequate signed conveyance at all.

The decision in Archie Comic Publications, Inc. v. DeCarlo, 258 F. Supp. 2d 315 (S.D.N.Y. 2003) is particularly instructive. The creator argued that certain model sheets fell outside the nine categories. The court treated the argument as beside the point, because the governing agreement also assigned to the publisher any right, title, and interest in contributions that did not qualify as works made for hire. The fallback assignment resolved ownership even though the work-made-for-hire designation might not have.

Drafting Beyond the Basic Assignment

A concise assignment can be legally effective, but careful drafting prevents avoidable disputes. The agreement should:

• Define the covered deliverables precisely, including drafts, source files, code, documentation, and revisions;

• Use present-transfer language such as “hereby assigns,” rather than only “will assign” or “agrees to assign”;

• Include all copyrights and exclusive rights under 17 U.S.C. § 106, together with registrations, renewals, extensions, and the right to sue for past infringement;

• Distinguish commissioned work from the contractor’s preexisting tools, templates, code libraries, fonts, and stock assets;

• Grant the client an adequate license to any approved background material incorporated into the deliverables;

• Require disclosure and approval of third-party materials and applicable license restrictions;

• Require the contractor’s own employees and subcontractors to execute consistent written assignments, and obtain copies of them;

• Include further-assurances language requiring execution of documents needed to confirm, register, or enforce ownership; and

• Address waivers of moral rights to the extent legally permissible.

The contract should also state whether the assignment takes effect on creation, on delivery, or on payment in full. Leaving that point uncertain can turn an ordinary invoice dispute into a copyright ownership dispute.

Chain of title deserves equal attention. A company cannot assign rights it never acquired. If an agency contracts with the client but delegates the design to a freelancer, the agency’s assignment does not automatically convey a copyright the freelancer still owns. Every link between the individual who created the work, and the ultimate owner must be documented.

A California Complication

Businesses operating in California should weigh one further consideration, and it has nothing to do with the Copyright Act. Under California Labor Code § 3351.5(c) and Unemployment Insurance Code §§ 621(d) and 686, an individual commissioned to create a specially ordered work is treated as an employee of the commissioning party for workers’ compensation, unemployment insurance, and state disability insurance purposes when the parties sign an agreement stating that the work is a work made for hire and the commissioning party obtains all of the rights comprised in the copyright.

Those statutes turn on the contract language rather than on the working relationship, and the Employment Development Department has taken the position that they apply to contractors engaged under work-made-for-hire agreements. Boilerplate copied into an independent-contractor agreement can therefore create state employment obligations, and exposure to associated penalties, that the client never contemplated.

There is no single answer to the problem. Some businesses contract with the creator’s loan-out entity rather than with the individual, on the view that the statutes reach individuals. Others rely principally on a present assignment and use work-made-for-hire language more selectively, accepting the trade-off in termination rights discussed below. Either way, the choice should be made deliberately, with the specific deliverables and parties in view, rather than inherited from a template.

Assignment Is Not Identical to Work-Made-for-Hire Ownership

The fallback assignment produces ownership, but it does not retroactively transform the work into a work made for hire. That distinction carries consequences for authorship, copyright duration, and statutory termination rights. A work made for hire is protected for ninety-five years from publication or one hundred twenty years from creation, whichever expires first, while a work authored by an individual is protected for the life of the author plus seventy years.

Under 17 U.S.C. § 203, an author who executed a copyright grant on or after January 1, 1978 may, subject to detailed requirements, terminate it during a five-year window that generally opens thirty-five years after execution. Different timing applies where the grant covers the right of publication, and advance notice ordinarily must be served between two and ten years before the effective date. The right cannot be waived in advance, however perpetual or irrevocable the assignment declares itself to be.

Section 203 does not apply to works made for hire, because the hiring party is treated as the statutory author and ownership does not arise through a grant from the creator. Where an independent contractor remains the author and transfers copyright by assignment, that author, or the statutory successors the section identifies, may later hold termination rights. One qualification is worth noting: § 203 reaches grants executed by the author. An assignment delivered by an agency or studio whose own employees created the work is not an author’s grant, which is a further reason to know who actually authored each deliverable. Derivative works prepared under the authority of the grant before termination may continue to be used afterward, but the exception does not permit the preparation of new derivative works.

The Practical Lesson

A work-made-for-hire clause should never stand alone in an independent-contractor agreement. The drafter should first assess whether the deliverables plausibly satisfy the statutory definition and should then include a present assignment broad enough to transfer the copyright if they do not.

For logos, websites, software, branding, and other commissioned creative work, the assignment is often the provision that actually gives effect to the parties’ intent. A few carefully chosen words can determine whether the client owns a valuable business asset or merely has permission to use one.

These problems are far cheaper to prevent than to repair. A business commissioning creative work, and a contractor asked to sign an ownership provision, should not hesitate to have a California intellectual property attorney review the agreement before it is signed. A focused review can confirm that the deliverables are properly defined, that the transfer language actually conveys the copyright rather than merely promising to convey it later, that every link in the chain of title is documented, and that the ownership clause does not create unintended employment obligations under California law. That cost is modest next to the alternative, which is learning in the middle of a financing or an acquisition that the company does not own its own logo.