Different Work Made for Hire Test Under the Copyright Act of 1909

This case applies the Copyright Act of 1909 version of “work made for hire.”  Why are we still talking about the 1909 Act when the Copyright Act of 1976 became effective on January 1, 1978?  Since the 1909 Act applies to all copyrights secured before 1/1/1978 and the first term for pre-1/1/1978 copyrights is 28 years, followed by a second term of 67 years (28 + 67 = 95), some portions of the 1909 Act remain relevant until 2072.  (1977 + 95 = 2072).  Those portions of the Copyright Act of 1909 will remain relevant throughout the careers of Millennial attorneys, and then some.  I say some portions, because the 1976 Act did away with many of the 1909 Act’s draconian requirements.

Composer and music producer Jack Urbont wrote the Iron Man theme song in 1966.  Urbont wrote theme music for a variety of other Marvel television characters.  In 2000, without Urbont’s permission, Dennis Coles (aka Ghostface Killah), Sony and Razor Sharp Records produced and released Supreme Clientele, an album spotlighting the Iron Man theme song on two tracks.  Urbont became aware of the album around early 2010 and sued Sony, Coles and Razor Sharp Records for copyright infringement in 2011.  Sony and Razor Sharp argued that the Iron Man theme was a work made for hire for Marvel and that Urbont did not own the copyright.  The district court granted summary judgment in favor of Sony and Razor Sharp.  On appeal, the Second Circuit held that Urbont raised issues of material fact regarding his copyright ownership and vacated the district court’s summary judgment ruling.

Third Parties Have Standing to Raise a Work for Hire Defense.

Under the 1909 Copyright Act work for hire doctrine, “an ‘employer’ who hires another to create a copyrightable work is the ‘author’ of the work for purposes of the statute, absent an agreement to the contrary.” (Opinion pdf page 9).  Urbont argued that Sony and Razor Sharp did not have standing (legal entanglement) to challenge Urbont’s ownership rights under the work for hire doctrine.  Marvel had not challenged Urbont’s ownership claims and was not a party to Urbont’s suit against Sony and Razor Sharp.  The relationship between Urbont and Marvel involved those two parties.  Sony and Razor Sharp were not participants in Urbont’s relationship with Marvel, so Sony and Razor Sharp should not be allowed to use Urbont’s relationship with Marvel against Urbont in opposing Urbont’s infringement claim.

The Second Circuit had not previously decided the question of whether a third party not involved in an alleged employer-employee relationship should be allowed to raise work for hire as a defense to a copyright infringement claim.  The Second Circuit ruled that the copyright plaintiff bears the burden of proving copyright ownership, regardless of whether ownership is challenged by the alleged employer or by a third party.  Third parties to an alleged employer-employee relationship have standing to raise work for hire as a defense to a copyright infringement claim.

Urbont Raised Issues of Material Fact Regarding His Copyright Ownership.

Copyright infringement requires the plaintiff to show 1) ownership of a valid copyright and 2) copying original elements of the work. 

Copyright Act of 1909 Work for Hire doctrine.

The phrase “work made for hire” appeared only in the definition section of the 1909 Act, Section 26. 

In the interpretation and construction of this title the word ‘author’ shall include an employer in the case of works made for hire.

The 1909 Act did not define either “employer” or “author.”  Courts developed the “instance and expense test” to compensate for the lack of definitions.

As a general rule, a work is made at the hiring party’s ‘instance and expense’ when the employer induces the creation of the work and has the right to direct and supervise the manner in which the work is carried out.

‘Instance’ refers to the extent to which the hiring party provided the impetus for, participated in, or had the power to supervise the creation of the work.  The right to direct and supervise the manner in which the work is carried out, moreover, may be enough to satisfy the ‘instance requirement even if that right is never exercised.

The ‘expense’ component refers to the resources the hiring party invests in the creation of the work, in order to properly reward with ownership the party that bears the risk with respect to the work’s success. One factor in this inquiry is the method of payment. We have held that a hiring party’s payment of a sum certain in exchange for an independent contractor’s work satisfies the ‘expense’ requirement, while payment of royalties generally weighs against finding a ‘work for hire’ relationship.

(Opinion pdf pages 18 – 19).

The instance and expense test under the 1909 Act differs markedly from the work made for hire analysis under the 1976 Act.  In the 1976 Act, work made for hire is not merely mentioned, but is defined at length.  17 USC §101.  However, for works outside of the employee-employer relationship, the parties must “expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.”  The written instrument must contain the words “work made for hire.”  Otherwise, the non-employee creator is considered the author.

Further, under the 1976 Act, a work made for hire outside of the employee-employer context must fall into one of nine narrow categories:  1. a contribution to a collective work, 2. part of a motion picture/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.  Importantly, under the 1976 Act, a) calling it a “work made for hire” does not convert the work into a work made for hire, and b) neither computer software nor purely audio music are works made for hire. 

Finally, under the 1976 Act, in determining whether the hired party is an employee, courts look to the general common law of agency and consider such factors as the hiring party’s right to control the manner and means by which the product is accomplished, the skill required, the source of the instrumentalities and tools, the location of the work, the duration of the relationship between the parties, whether the hiring party has the right to assign additional projects to the hired party, the extent of the hired party’s discretion over when and how long to work, the method of payment, the hired party’s role in hiring and paying assistants, whether the work is part of the regular business of the hiring party, whether the hiring party is in business, the provision of employee benefits and the tax treatment of the hired party. Community for Creative Non-Violence v. Reid, 490 U.S. 730, 751, 752 (1989).

Returning to the present case, Urbont’s creative control over the project, the lack of a prior working relationship between Urbont and Marvel and the lack of any guarantee that Marvel would accept Urbont’s work weigh against a finding that the work was created at Marvel’s “instance.”

Urbont’s claims that he independently recorded and produced the Iron Man theme song with his own resources and that he was paid only for his costs support the inference that Urbont bore the risk of the work’s success.  Other considerations weighed in Urbont’s favor, while some considerations weighed against a work made for hire finding.

Considering all of these factors, we conclude that genuine issues of material fact remain as to whether the Iron Man composition was created at Marvel’s instance and expense. Urbont’s assertion that he was not hired when he wrote the songs but instead wrote the songs on speculation hoping Marvel would use them, distinguishes this case from the arrangement between Marvel and an independently contracted artist which we held in Kirby was work for hire. There, we explained that that Marvel and Kirby had a standing engagement whereby Kirby would produce drawings designed to fit within specific Marvel universes. Thus, when Kirby sat down to draw, it was not in the hope that Marvel or some other publisher might one day be interested enough in them to buy, but with the expectation, established through their ongoing, mutually beneficial relationship, that Marvel would pay him. Urbont contends, by contrast, that he was not being paid as a job to write the songs, but rather all he wanted to do was to make sure that his costs were covered, and he would license this material to Marvel to use. There was no established working relationship or guarantee of payment. As Urbont explained, Marvel ‘had the right to like my songs or not like my songs. They could have rejected my songs.’ Marvel did not pay Urbont until after it had accepted the Iron Man composition.

Other factors further undermine the conclusion that the work was for hire, including that Marvel, according to the uncontradicted testimony of Urbont, which we must credit in assessing the appellees’ summary judgment motion, was not permitted to modify the work without Urbont’s permission, that Urbont recorded and produced the composition entirely independent of Marvel, and that he claims to have received royalties in addition to a fixed sum of payment. Together, these factors are sufficient to raise genuine issues of fact as to whether the work was for hire.

(Opinion pdf pages 23 – 25).

Existence of a Contrary Ownership Agreement.

If it is determined that a work is made for hire, the hiring party is presumed to be the author of the work.  An independent contractor can overcome that presumption with evidence of an agreement to the contrary, either written or oral, that was entered into when the work was created.  The district court did not consider Urbont’s deposition testimony and corroborating evidence of Urbont’s alleged agreement with Marvel that Urbont owns the copyright in the Iron Man theme song.  The Second Circuit ruled that a reasonable jury could conclude by a preponderance of the evidence that an ownership agreement existed between Urbont and Marvel. 

The Second Circuit concluded that Urbont raised genuine issues of material fact regarding his copyright infringement claim and vacated the district court’s summary judgement grant to Sony and Razor Sharp Records on that issue.

This case is Urbont v. Sony Music Entertainment, No. 15-1778-cv, Second Circuit Court of Appeals.

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