Contractual agreement

in Tips

One Huge Reason Why Your Contractual Agreement Shouldn’t be a “Work for Hire”

We’ve read and researched a fair amount of legalese here at Craft Blue regarding contractual agreements. While the general adage is that “Work for Hire” contracts are an industry norm for transferring ownership rights of web applications, they may not be legally binding in court.

The primary reason is that “Works Made for Hire” contracts, in many cases of software development, fail to meet one of its requirements: Per 17 USC 101, the deliverables must fall within one of nine limited categories of works. The categories, as listed below, fail to cover software development work products for non-salaried workers (agencies, contractors, and freelancers):

  1. as a contribution to a collective work,
  2. as a part of a motion picture or other audiovisual work,
  3. as a translation,
  4. as a supplementary work,
  5. as a compilation,
  6. as an instructional text,
  7. as a test,
  8. as answer material for a test, or
  9. as an atlas

Internally, we’ve found that almost none of our projects fall within these nine categories.

A highly recommended practice is to institute a clause which covers a variety of scenarios of assignment of the copyright for all work produced. In short: you need a clause which details what and when copyright assignment takes place.

We highly suggest you review the United States Copyright Office’s Works Made for Hire legalese (PDF) for yourself. It may be reason enough for you to revise your own contractual agreements.

Disclaimer: This information is given for legal education only. It may not work for  your specific situation. It is not legal advice, and I am not your  lawyer. You have to find your own local lawyer to get legal advice and  help with your problem.

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  1. In the text supplied by the Copyright Office, it says either “a work prepared by an employee within the scope of his or her employment” or the list you specified. This pretty much sums up most things that an employee would do for a company.

    • Correct, the legal ruling fairly well covers salaried employees. It falls short when it comes to contracting work to a third party such as an agency, freelancer, consultant, or anyone else that may fall under a 1099.

      • How does software development not fall under “contribution to a collective work”? Does “collective work” have a specific legal meaning here?

        • In order to fully understand the verbiage, you would have to read 17 U.S.C. §101 which defines a collective work as follows:

          A “collective work” is defined as “a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.”