20 June 1989

Copyright After Reid

New York Business Press Editors
Doreen [J.] L[eavens] Costa, Partner
Brumbaugh, Graves, Donohue & Raymond

Costa: Our topic today is protection of copyright in literary work, photographs, advertisements, and the like, that are prepared by independent contractors or freelancers.

Now copyright is the right to copy. That includes the right to distribute, to license, and the right to reprint the work. As many of you are probably aware, the law regarding copyright ownership, in works that are specially commissioned or prepared by freelancers, has recently undergone a very significant change as a result of the Supreme Court decision. Now I've left a copy. There are some handouts and I'll mention them as I go through.

The Supreme Court decision is the Community for Creative Nonviolence against Reid. It's just come down on June 5 of this year, and you'll see generally when you see decisions before they're in the Federal Reporter and they appear differently then they do. Well, we have the Lexis printout, right off the computer. In view of its recent date it hasn't made its way into the federal reporter yet.

Now what I'd like to discuss today is the copyright statute, the provisions that pertain to copyright ownership in the independent contractor situation.

The law in New York, what it used to be, and that was case-made, judge-made law, before the Reid case. The law that is now after the Reid case, and we'll see that New York law has changed. And then lastly, and maybe most importantly, some advice on what both sides can do to protect whatever their interest may be in the work.

Work for Hire in the 1976 Copyright Act

Now under the 1976 copyright act, and that's the law we're dealing with now, the 1976 Act, ownership of a copyright vests in the author. The author's generally defined as the person who translates an idea into a fixed or tangible expression.

There's an exception to that general rule of who owns the copyright. That's to what you've all heard of before referred to as the work for hire doctrine. It's actually the work made for hire doctrine, but we'll use work for hire, simply easier to say. Under that exception, owner of the copyright is assigned to vest under the law, in the employer, or in the person who specially commissioned the work, rather than the general law, where the copyright would vest in the individual who actually created the work.

Now the '76 Act had 2 different definitions of what's a work for hire.

[1.] The first definition is that created by an employee within the scope of his or her employ[ment]. And in that situation, where it's a work for hire, ownership of the copyright vests in the employer.

[2.] The second provision of work for hire applied to specially commissioned work. Under the second definition of work for hire, there were two requirements.

[2.1] The first one was that there be a writing between the party commissioning the work, the party preparing or creating the work, that it's going to be demed a work for hire, and that ownership will go in the commissioning party.

[2.2] The second requirement and what cancelled out a lot of commissions where it's at for hire, is that a work had to fall within 9 specifically enumerated categories. Now it may not apply in your field, but I'll read what they are. Again, you had to have both, the written agreement. It had to fall within the 9 categories in order to be a work for hire and a specially commissioned work. Briefly, the 9 categories:

If you can see by just the broad categories of what these works are. The underlying idea in Congress here was that there be an underlying work. This wasn't something new that the independent contractor was creating. Something that built on a pre-existing article or work. And again, to have the 2 steps, the agreement and a fit within one of those 9 categories, specially commissioned work would be deemed a work for hire, copyright ownership in the commissioning partner.

Different Interpretations in Different Circuits

Now, the controversy that's arisen. You may know that our federal courts are divided by circuit. We're in the Second Circuit, New York, Connecticut, and I believe the Virgin Islands. The controversy between the varied circuits is set upon that first definition that I mentioned, on what a work for hire is, and that is something created by an employee within the scope of the employment.

The problem arose when it was really an independent contractor situation, yet there was no written agreement, and it didn't fall within one of those 9 enumerated categories that I mentioned. What the commissioning party tried to do is convince the court this is actually an emploeye within the scope of his employment. It fits within the first definition that it mentioned as a work for hire. The controversy arose in the independent contractor situation, trying to have him declared an employee, so that the copyright would vest in the commissioning party.

Congress didn't define what an employee is, or what's an employee-employer relationship in the 1976 act. Left it to the federal court. What you have is the different rules that developed, and some are inconsistent within the various circuit. Now to give you an example fo what rules have developed.

Here as I said, we're in the second circuit. New York courts defined an employee-employer relationship where the commissioning party either had the right or exercised, depending on the court, either the right to control or exercised the right to control over the product that was being created. They would look at things like, who paid for the tools, who had the idea for the work, did they have veto power and did they exercise supervision over the artist, the author, while he was preparing the work. If the commissioning party could convince the court that it exercised the requisite control, sort of loosely defined, then in that situation the court would find, OK, it's a work for hire, under that first definition. We'll deem the independent contractor to have been an employee, and the work to have been created within the scope of his employment. That was New York.

Other jurisdictions had different rules. What they call the 9th circuit, and that inclues California, Oregon, Washington, and maybe some other states out there, the Court required that the party whose contract it is, be a formal salaried employee. As you can tell, it's a much tighter, stricter definition. Unless you could show that the party who performed the services, created the work, was actually on your payroll, by things like, did you contribute to employee's compensation, did you pay payroll taxes, and things like that. If not, then the individual who created the work owns it. Very different results between the two jurisdictions.

The third group of rules, and that was in the 5th circuit that included Texas, said, well Congress didn't define what employee meant, they left it to your normal master-servant agency principles under the state law, so general conventional employees only would stand in that first definition of what's a work for hire.

Feel free to ask questions.

Book for Publishing House Not in 9 Categories

Q: It would seem to me that under that first definition would fall anybody who wrote a book for a publishing house. If you contract to write a book for Random house or whatever, they exercise supervision over the work. They edit the work to some degre, they copy edit it, they produce it and so forth, and yet it's not a work for hire. The author owns the copyright.

Costa: The author owns the copyright. What's the course of the ... It's a custom in the industry here. So generally the custom was that even if there's some editorial exercise, still the individual as was expected between the parties.... So the overall test of actual control, what constituted actual control, would be determined by what was the custom of the industry.

The Supreme Court was faced with these various tests that would deal different results when it decided the Reid case that I handed out. Now the Supreme Court settled the question. What it did was it adopted the 5th circuit in Texas test and rejected the New York test. Common law agency principles, master and servant, are now going to determine what the work for hire under that first test, not your right to control, and not actual control.

Community for Creative Nonviolence vs. Reid

Now the facts of the Reid case, as by the way, and in these areas they're almost always fact specific. As we talk there'll be a general test the court will adopt, but it's going to look at the particular facts of the case. Even now we'll see if there's an employee-employer relationship.

Reid's interesting so I'll give you just a few minutes discussion of what the facts were and you can read it at your leisure.

The Community for Creative Nonviolence was participating in a pageant in Washington, D.C. It wanted to have a statue created that would depict the plight of the homeless. It wanted a Nativity scene. It was around Christmas time. They started looking for somebody who would sculpt a Nativity scene of homeless people, Mary and Joseph and the baby would want to be depicted as poor homeless. It got Reid's name through a referral, contacted him, they went back and forth, Reid was going to donate his services, but the time, the material, things like that, they reached an agreement.

Now the Community was going to participate to a certain extent in the creation of the statue. It was going to construct what they call the steam grate and a pedestal for the statue. The steam grate, there was actually going to be steam coming out that would be visible to people coming along. The statue itself that would fit on the pedestal was going to be created by Reid. The Community gave him a deadline, December 12, of '85. Before Christmas he had to have it complete.

There was a trustee of the Community, his name was Mitch Snyder, and he was the individual who was charged with this project. He supervised Reid. He had Reid report to him. He even rejected some of his ideas. One, he didn't want the statues carrying a suitcase or anything like that, he wanted them to have a shopping cart. Reid adopted the suggestions of the community, listened to their advice, and they had final say of what would and would not go into the statue.

Reid himself bought his own tools, used his own office, hired outside help as he saw fit, and he determined his own working hours. He knew what his deadline was, but how he got it done was totally up to him. The Community paid him on a one-shot deal which would cover all his expenses afterwards, as opposed to any kind of salary.

The feud arose because the two never discussed who was going to own the copyright. Both after the Christmas pageant was done wanted to sort of shop this statue around to different cities. Both filed copyright applications, and had the right to do so. Ended up in the court. I won't go into the background, you can read that in the decision....

It wasn't faced with the issue of whether this would fit within that second definition, of specially commissioned work. As I said there was no agreement, much less a written agreement between the parties. A sculpture doesn't fit within those 9 categories that I mentioned, that wasn't an issue.

Community wanted Reid to be declared an employee acting within the scope of his employment. The Supreme Court addressed all the different circuit court approaches that I mentioned before: control, the right or actual control, whether he had to be a formal salaried employee.

Can't Become Work for Hire by Contract

What the Supreme Court ultimately held was that agency principles, general master-servant law, was going to control whether or not there was a work for hire under that first definition. The Court said, Congress showed 2 avenues to protect a work that wasn't made by the company. One was an employee, the other was a specially commissioned work, and that if you couldn't get within the specially commissioned work, you couldn't redefine the relationship, and say, ok, now he was an employee. They were mutually inconsistent routes. So the Supreme Court held. And when you had an independent contractor situation, and you tried to get into those 9 categories, that argument didn't work, that's it, you couldn't be an employee.

Now the decision clearly changes New York law. Under New York law, there was control, nominally the right to control. The Community had veto power. It vetoed certain of his idea. There was actual control over what the product was to be. They were almost over every step. Although they weren't there daily there were reports from Reid. It would have gone the other way if it were New York law. The copyright ownership would have been in the Community and not in Reid.

Ownership of Architectural Design

Now Reid's going to affect a lot of decisions. My firm has a case pending now, been pending for a year and a half, unfortunately we may not [now?] see the decision coming down in a week. We represented a chain of toy stores, and our client commissioed an artist to design drawings for the shop, the store itself, it was contemplated that various chains and subsequent stores had the same type of motif. What we argued, the suit arose because the designer sued after our client took the original drawings, and on their own, doctored them up, made revisions for use in subsequent store. The designer sued, claims we have to pay him, client has to pay him, and that the designer owns the copyright. One of our claims, thank goodness not the only one, but one of our arguments was that we exercised actual control over these drawings, we looked at them, we changed things, we said what could and couldn't be in there. Now that may have been, we had a fighting shot, I think, on that argument before the Reid decision. Maybe we had some shot left, but I don't think so after Reid. I think we have to take comfort in our other arguments at this point. So there is definitely a change on what the relationship is and who's going to own in almost every situation. This was architectural drawings, but in whatever situation, there's really new law here.

Changes Relationship of Publishers and Freelancers

Now the Supreme Court decision is likely to have significant effects on your business. As I understand it, we have both sides here represented, the publishers and the freelancers, and you have competing interests.

From now on, individuals who are specially commissioned to write an article, take a photograph, whatever else on a one-shot deal, or who aren't under typical agency principles in your employ, are going to be the parties who own the copyright. That may give some comfort to the freelancers, it's not going to give much comfort to the editor.

What I've done, because I don't think the freelancers have to do a whole lot here. You just go about doing your job and don't give your rights away by an assignment or a license in writing, you own the copyright and you call the shots on who can use these things at a later date, who has the right to license.

Writer Can Assign Additional Rights to Editor

Now for the editor, all is not lost. The Supreme Court in the decision that Reid is, said you can contract these things away. This is going to be basic bargaining power, negotiating beforehand. There are specific steps the editors can take. And they must now take steps, where the freelancers don't have to.

The first question that the editors and publishers have to ask is, do they care? Do they want the right to decide the one-shot deal, for one publication, do they want to reprint, perhaps at a later date? Do they want to create a derivative work, and use the article or the photograph as the basis for something later on, and do they want to prevent the same photograph, the same article, whatever, from appearing in some other publication at some later date?

If they do want to have these controls they've got to negotiate and contract for them with the commissioning party. The best way to do it: Take an assignment.

If it's the editor, if you can get it in your negotiating position, and you care about control here, take an assignment. How you would do that differently, if you've got a relationship with an independent contractor that's really ongoing, and the person is constantly doing things for you, it may simply not be feasable to address each work as a creator.

You want to have a master agreement. And you want to provide right in the agreement, X hereby assigns to the editor, the publisher, whosever name you want it, all designs, all photographs created under this agreement, and all copyrights in the agreement.

Now there's arguments within my firm, back and forth we do it different ways. Some people say you really can't assign the copyright until the work actually exists. How we do this, with this ongoing relationship, you require in the contract that the person not only hereby assigns in this document, but also agrees to execute whatever documents might be required at some later date to perfect the assignment. What we contemplate here is a specific work that you want to sue [?] on, and you'll require an assignment after it's created one particular work, you might file in the copyright office. In another situation, where it's more of a one-shot deal, and it's not infeasable to deal with these situations as they come up, in your agreement, as opposed to saying we hereby assign, or the contractor hereby assigns, he agrees to assign once the work is completed, and will execute an assignment of the particular work in the form you attach. We do that.

We have an actual form of assignment, where it's attached, so that the independent contractor notes what he's going to sign once he's completed the work and it's agreed to do so.

Copyright Notice Still Useful

Now the other thing that you might--this is the editors, now, in trying to get your rights--you might put in the contract, it's a requirement that there be a copyright notice and an agreement that there'll be a copyright notice placed with the article with the photographs, in the name of the person who 's going to own it, and that's here the editor or the publisher, whoever it may be.

As an aside, we've joined the Berne Convention and as of 1989 you may not be required, work created in the United States, you don't have to put that little C in a circle, which you see all the time, your year and your date. Before, you had to have it. You could cure it if you forgot it, but you had to have it to stop other people. Now you're not going to be required to do that. We're telling our clients, do it anyway. Put the notice on it.

Because if you can prove the infringer had access to the work, and the copyright notice was on there, you deprive them of a good faith defence. That's going to create a presumption that he knew about your rights. So use it, why not, you've been doing it all these years and it gives you something still.

To back up here and apply that to your situation, as an editor, you've really covered all your bases. You've got an agreement, number one, that they've signed or that they've agreed to assign, depending on how your particular attorney and you want to structure it. You've got an actual assignment if it's called for for a particular work, and now you've got thirdly an agreement from the independent contractor that you're going to inform the public, in a copyright notice, that you are th eowner of the work. With those three steps it's going to be difficult for the independent contractor later on to now claim in a conflict that he be the owner or he is in fact--

Violation of Agreement for First Rights

Q: But you keep talking about these rights later on. Suppose you've commissioned something, say a cover, pictures in a magazine. Photographer takes it at your request, and you agree to what you're going to pay him, and you say, oh, yes, we're going to use that, we're going to have it on our cover. But your magazine has a 2-month lead time. He finds a weekly that likes it, and you pick up a weekly that has already got it. Of course, I know what the answer is as far as recourse is concerned in actual practice. He's finished doing business with you. But legally, are we talking only about subsequent use, or are we talking about taking something that he knows is going to be used and reusing it?

Costa: If you've taken an assignment, you're assuming now that you're taking an assignment in your contract. Every right is already assigned to you. You're the owner. And if he's agreed to assign, although it's not completed, we haven't approved it, he's breached the contract. So you really would have a contract claim against him, because he's agreed to assign and agreed that you're going to be deemed the owner.

Q: No, even if you're not assumed the owner, even if you only want first rights, but he's gone ahead and turned it into a situation where your first right becomes a second right.

Costa: You've got contract action against him, really not under copyright law, because under your scenario, he remains the owner, he's simply agreed to give you rights of first use, and he's breached it. What you get, I suppose, the injunction is too late, unless you can find out about it before an dyou can stop him from doing it, you get your damages whatever they may be. So probably as a practical matter, your solution is you're finished and just don't use him again. I don't know what your damages would be there and how you'd prove them.

Ownership of Photos and Text of Advertising Brochure

Q: I also write advertising and marketing, stuff like that. If I do a brochure for somebody, does the photographer own the photos, and then I own the lines.

Costa: Who's the photographer work for? Is he working for you or--

Q: Subcontracted by me. Shoot for the brochure.

Costa: We've got to analyze that step by step then. Have you taken an assignment, or is this without any writing between you and the photographer? Any written agreement?

Q: No writing. I just said go shoot it.

Costa: He's the owner.

Q: If I write a line that the advertiser wants to take from the brochure and write it on television, is that my line, or does he own it because it was in the brochure?

Costa: Who's preparing the brochure?

Q: I'm preparing the brochure. I get it printed, I wrote it, I got the photographer to do it, and I hand the brochure to the client.

Costa: You own the copy. You own the copy that may be taken from it.

Q: Is this new here?

Costa: As I understand it under Reid, that's going to be the law now unless you've got an agreement. The photographer's done work for you. And the photographer's going to own the particular photograph. You're the one, under the new law, remember under Reid, it's going to be the individual who actually created the work. That's always been the law unless you can fit within work for hire. That's what's changed. It's simply harder to fit within work for hire now.

Freelancers Can't Create Work For Hire Ads

Q: So any client who wants to get an advertising campaign or advertising for material from somebody, has to create a work for hire program, or else the material would only be useable in that element that was purchased.

Costa: I'm not sure that's accurate, because I don't think you can create a work for hire situation, unless under the law it really is an employee-employer relationship. As I understand it, it's not, you people probably know better than I, you independently contract these things out.

They're not on your payroll, these advertising individuals. So you don't fit within a work for hire. That's what I think you can't do.

Even if you try and contract out and have this writing betwen the two of you, we're going to deem this a work for hire--some of our clients have said, can we do that, can we stipulate between the two of us that it's a work for hire even though it might not be. That hasn't been decided, obviously the case is new, but I'm not comfortable with that. I think that if the individual later changes his mind and sues, the court's going to look at the Supreme Court test, not just two people trying to redefine a relationship, but what it is under the common law.

Solution: Take an Assignment or License

Q: Well what does a client do then that wants to purchase?

Costa: Take an assignment. You take an assignment, you're the owner. So if the company who wants the brochure prepared for them says that that's their condition. They'll hire you to prepare the brochure, do what you have to do, but I want an assignment of that work. I want to own all rights.

Retroactive Effect

Q: How retroactive is the ruling?

Costa: That's a good question, in fact, I had had that in my outline. A lot of clients have asked that. This is not new law, technically speaking, this isn't like Congress enacting something new that gives people lead time that get up to snuff, so to speak, and change the policy. What the Supreme Court did was to interpret an existing statute.

The Supreme Court says this is what the law has been all along, the circuits have disagreed, but we're telling you now, so the answer is, is it retroactive, strictly speaking it's not, because it's totally what the law is. Does it have retroactive effect? Yes.

You have a contract you entered into say, two years ago, and you have the right to control all that. That may not apply to this group in view of the nature of your work, but you've actually controlled two years ago or a year ago or before June 5, you'd be declared the owner of the work. You may not now. What does that mean for you? That means you've got to do something about it.

You've got to use your bargaining power. Go back, take an assignment if you can still get one. Take an exclusive license. Take a license that may not be exclusive but lets you do want you want to do. But before you make use of the work, beyond what was originally contemplated in your first rights scenario, the original agreement may have contemplated, you never seriously considered the question, but as an independent contractor, you may not have the right to do it without getting an assingment, or getting some further agreement with someone that you can do it.

Magazine May Not Own its Own Photo Files

Q: I think many of the publications that some of you work on have photo files, and some of which have been built up over years and years, and contain in our case, thousands of photographs, especially head shots, that have been taken by dozens of different photographers, many of them in one-shot relationships, often without any kind of written agreement, sometimes several years back. Essentially, what this seems to imply to me, is tht most of those photographs don't belong to us, for the purpose of republishing.

Costa: And they've been taken by somebody independent? You're probably right.

Q: So its seems to me that it would mean that would be strictly within the leter of the law, we'd have to go back to each one of these photographers, and execute an additional agreement with them, for all the various jobs they've done, in order to retain those rights, or never use the pictures again.

Costa: Sounds unwieldy. I think you've got some risk there. If you can't identify them, obviously that may be impossible. You may not be able to identify what particular independent contractor did what particular photograph.

But if you use it again, and that photographer can somehow prove that you've used the picture he took, you may be liable to royalties to him, whatever damange you can prove. It may not be a great big economic risk, but it may be, depending on how many pictures you're using. You may have to pay him some money, is really what it comes down to. That's proof that he'd have to make, though.

Public Domain

Q: For published bylines to an uncopyrighted work, does anybody own anything, or it's just in the public domain?

Costa: When you say, uncopyrighted, do you mean no copyright notice, because copyright, anything is protectable as copyright that's original, that you sit down and do. To protecte it you don'thave to register.

Q: Work for hire, bylined, in a periodical that's not copyrightable.

Costa: Probably in the public domain. You say uncopyrighted, I'm a little unclear, because usually there'll be a copyright at the beginning and the end of every publication that would cover whatever in there is new, novel or whatever. But if it's in a copyrighted publication, it's by a staff reporter, somebody like that, who's on the payroll, then it probably still is a work for hire. If it's uncopyrighted, there's been no notice or anything like that, then if it's anything else, simply in the public domain, and nobody has the right to protect that.


Q: You're saying that copyright is automatic. Registration is not necessary. Having written it and indicated copyright with a little "C"--

Costa: Copyright notice. That's correct.

Q: That's automatically copyrighted under the law. You don't have to file anything.

Costa: The only time that you have to file something is when you want to sue somebody, under the laws that exist now. Your protection in copyright arises from the copyright notice, that little "C" in the circle, your name, and the year the work was created, in order to fix damages, and things like that. There are other benefits, damages being one, in registration.

Q: You're saying that it's more advantageous to be registered because something might happen down the line?

Costa: This is a decision. If people don't want to be filing every day for copyright, because it costs money to have an attorney do it, there's a filing fee, an dthings lik e that. The only time a registration's really required is when you want to sue somebody.

Q: You could retroactively register it then?

Costa: It's not really retroactive registration. You'd be registering as of the date you file the application, and in the application itself, if you've seen them you see you have to put the year the work was created. You're really not getting anything more, your registration because you wait. But we have that happen all the time. You can walk it through, basically. You can usually takes maybe a month. If you've got an infringement situation, you file a special petition, [?] that day.

Assignment or License vs. Work for Hire

Q: Let me see if I understand this. If you're an employee of a publisher, and you write an article or take a photograph for them, that's a work made for hire.

Costa: That's correct.

Q: If you're specially commissioned to do one of those 9 categories, it can be a work made for hire--

Costa: If you've got a written agreement.

Q: If you've got a written agreement. But for us who are either photographers or writers, they can't specially commission us to do a work for hire, is that right?

Costa: Right.

Q: All they can do is ask us to give them an assignment.

Costa: Or take a license. Class exclusive. [If they have the] bargaining power.

Q: So if I write a story, and the publisher wants to have that exclusively and he's commissioning me to do it as a freelancer, whatever he does, I own the copyright, and the most he can get out of me is to ask me to give him an assignment of all the rights that he would have had if he had written it himself, or if I had written it as his employee.

Costa: That's not necessarily true. There are a few things that you can't give away. It's better for the employer to have it a work made for hire. I don't know if this will interest you or not, it may not be appropriate in your area, but for one, if you've assigned or licensed, 35 years after you do it you can cancel it. You can't contract out your right. So that's something that is different. If it's a work for hire, he's deemed the author. So there's no license or assignment for you to cancel.

The other thing, there's different lives to the copyright, depending on whether it's a work for hire or whether you assign it away. If you assign it away, you're the author. He's the author if it's a work for hire, but when you're the author it's the life of the author and fifty years. If he's the author, it's 100 years. That's a corporation. There are a few differences. Generally speaking what you say is true, but you're not quite giving him everything he would have had had he been the author.

Limitations of Oral Contract

Q: Substantively, instead of work for hire, they might want us to sell them an assignment, to contract an assignment. But this has to be in writing.

Costa: Yes.

Q: And if we don't put anything in writing, then we can't sign away our assignment, and the most they can do is use it on a limited basis, either a first time rights, or second time rights, or whatever kind of rights we're giving them--

A: What are contemplated between the two of you. Unless you grant that this assignment or exclusive license--it goes back to basic contract law. You own the rights. Whatever you contract for to do, in your agreement where he commissions you to do whatever it may be, that's all he has. You can license other people if you will have the first [call?] in distributing the work, unless you contract that work.

Q: So as long as we don't have a written agreement, we can reuse our work.

Costa: That's a broad statement. What if you orally say to somebody who they're dealing with and you induce them to enter into the bargain by saying I promise that I'll assign the work away, I'm going to grant an assignment. There may be courts that will imply a trust, because it's not in writing there's an agreement to assign. That hasn't been posed yet under this Reid case, but I think that the answer is unless you enter into a binding agreement in writing or otherwise, you give away the right be it by exclusive license or assignment, you own it.

Q: The practical question is, a lot of people maintain that freelancers should always sign a contract with their publisher, to protect themselves. But if they're only concerned about giving the publisher, say, first publication, they don't really need a written contract for that.

Costa: Depends on what the contract says. What you're saying is, is a contract always harmful to you? The answer to your question I think, is, unless you've got a contract to do something else, you're only giving them what's contemplated in whatever the arrangement is when he commissions the work. But is a contract always harmful? Depends on what the contract may say. You know, We're hereby adopting what happened in the Reid case, and you own all rights, we're only going to use it for this particular instance. Obviously that doesn't hurt you. But you will have to carefully look at a contract to make sure that if you don't want to give an assignment that there's not one written in there.

Q: But if you don't have it in writing you don't have to carefully look at it.

Costa: If there's no writing there's nothing to look at.

Q: But what he's saying is a lot of, some freelance work is strictly verbal. I'll do an article for you, and it'll be in next month. Basically that is a one-time use in which the freelancer retains the call of, copyright.

Costa: That's correct.

Q: One other point. Basically you're talking about writers and editors, but isn't it strictly the relationship between the writer and the publisher. I guess the editor is the agent for the publisher.

Costa: Yes. I use them interchangeably, probably loosely. You people know a lot more about the trade than me.

Q: Some editors are relatively sympathetic to the plight of freelancers, and are willing to only take the first North American rights.

International Cases Covered by Local Law

Q: You're talking about something created in the United States. How do international boundaries affect this? I want to reprint an article that was written by an Austrian writer for a German magazine. I don't know particularly what their contract is. I usually start with the publisher, and the publisher says, go ahead an ddo it. I assume he had the right to do it. The writer might come after me later and say, he didn't have the right to give you the right.

Costa: Those rights are not going to be determined under the Berne. You do what you've been doing there. Because copyright, like trademark, can be territorial, and when something arrives that's in Australia, that's created in Australia, it's going to be Australian law that's going to be determined under Australian law. I have limited my talk really to what's created in the United States, that's the territorial reach of our law.

Q: Just as that [?] the gentleman requested, and also the gentleman up front with photography, it's going to be very nightmareish.

When are PR Photos Public Domain?

Q: A convention bureau sends me 10 photographs of the most recent convention which apparently have been taken by a photographer, and I use those to show crowds and all sorts of other things. Five months later I'm doing a roundup on something, and this photograph that I used before appeals to me and I run it again. These photos were furnished to me without any indication that there was a work for hire contract or anything whatsoever, and suddenly I get a lawyer letter from the photographer's representative saying that I have violated copyright law. Is that something that could happen and what should I have done about that?

Costa: That is something that can happen. I take it we're not dealing directly with the photographer. Really what you're going to do is take some warranty. Are you paying the second party that's giving it to you?

Q: No, they're free. It's a common practice in the business.

Costa: That could be a very tough one, because conceivably there is going to be some rights that are violated. The photographer has some rights in it. If you have some bargaining power and you're paying for these things, I suggest getting a warranty that the person who gives them to you have rigths. You're taking them for free, you probably don't have much clout to do it. Really if you want to avoid some charge of infringement you're going to have to be sure that you have this permission from whoever has the copyright. Here that may be that individual photographer.

Q: But haven't you got the right to assume that if somebody sends you a news release that includes pictures, and says for release upon receipt, then he's telling you--I use pictures all the time, they're sent to me by Boeing. I don't ask Boeing who took them or what.

Costa: Maybe that these are in the public domain, and it's not going to be a problem for you. If there's not copyright notice udner the law--

Q: But if he has trouble with his contract it's his problem. He's assigned them to me. He's given me the right to whether he had the right to do so or not.

Costa: If he did not have the right to do so, though, anybody in the chain can be held liable. So that's not necessarily the end of that question.

Subcontractors Must Assign Rights

Q: The same thing as after the brochure. As the inside contractor putting together a brochure or newsletter, where you are subcontracting photographs, and you are selling the finished package to someone else, you mean I can do it two ways, if you want to totally give away rights to the final user for all purposes, can you then get an agreement between yourself and the photographer, that the photographer has assigned the rights to you, and therefore you're going to assign the whole packet, or you can either have the photographer and yourself independently agree, to sign away rights to the final owner?

Costa: That's correct, but if you're the one who has the contract to sell the brochure, and you can go ahead and hire the photographer, whoever, generally, the contracting party, if I was advising them, I would make it a requirement of the commissioning of the work that the person secure all copyrights for me, and anybody else could work from the [?] because if he doesn't, he doesn't have the right to give to you, and if you're saying you've got to assign me the whole work, you've got to have the right to do it, otherwise it's void.

Right to Republish Article From Copyrighted Publicatoin

Q: Assume that I had an article published 5 years ago in the New York Times. Now another publication says we'd like to use that same article. I'm the writer. Can I then sell it to them at this point or might the Times--I'm wondering what legal weight an argument might have, let's say an organization like the Times, saying when this article was written for us, so-and-so understood that the copyright ws going to be ours, even though there's no signed agreement, that was common knowledge in the profession, it says copyright at the top of the New York Times, and he wroite that for us, at our request, with full knowledge that this was going to be ours exclusive. Now five years later he's taking that article and publishing it in another publication.

Costa: There's no agreement between you and the Times on this--

Q: Absolutely no agreement.

Costa: Then your question I assume is going to come up. As you know this just came out with the Supreme Court decision. If I were advising--this is the Supreme Court talking--it controls. It controls over any federal law. That's an argument that will come up, to argue the principles of equity. The Supreme Court said, that is not the law. This is what the law is.

Under the reading of Reid, you can go ahead, and you can assume that the New York Times may try to apply these ... case, and the New York Times may come back in and say just what you said.

Under general contract law, we had the benefit of the bargain deal. We never would have paid him whatever exhorbitant rate we paid him, had we known that we weren't getting it exclusive. You can assume that these arguments will come. Predicting what would happen, the copyright law is statute, and contract law is just general common law.

I would assume if I were the court, and again this is just talking about what may happen down the road, but I would think that the Supreme Court decision is going to win out. Whatever the benefit of the bargain is, the Supreme Court deicision said it's not a work for hire.

The basic principles of copyright vests in the person who created it, apply. Bottom line. That's what Reid said. We'll have to wait and see if your situation comes up, because I expect somebody will make just that argument. You may not want to be the test case.

Copyright Law Supercedes Contract Law

Q: I assume that contract law would supercede copyright law.

Costa: I would say just the opposite. The Copyright Act, which is the statute, which is different from the general contract law, and now you've got the highest Court in the land, interpreting the statute, that Congress passed, not just the judges got around and judges interpret the general law. Congress passed the law, and I would say statute--

Q: But if I were to sign a contract, giving full rights to the publisher, wouldn't that supersede the copyright--

Costa: No, because the Copyright Act permits assignments.

"First North American Reproduction Rights"

Q: Two questions. One thing occurred to me. First North American reproduction rights.

Costa: It's a new one on me.

Q: Because I recently sold a magazine article to a consumer magazine, and I had an agreement to sell first North American periodical rights. I received a check, and printed on the front of the check, it said first North American reproduction rights.

Costa: I would assume it means what it says, but is there a written contract you entered into?

Q: I have a letter from the editor saying I'm selling periodical rights.

Costa: I would assume you have the first rights to publish in the territory, but that's really not a term of art. If I heard the term I would assume it was somewhere in a contract and that's simply the territory they're giving you, they're giving you first rights within that territory. But as far as a term of art, I think it's probably self-explanatory what they're doing. It doesn't have any official meaning that I know of. Besides first rights in the territory.

Q: If I cashed the check, provided this means something else beyond reproduction rights may have broader meaning--

Costa: Not that I know of. That may be something you want to clarify before you cash the check.

Q: I did call the editor, and I sent a letter to the editor, and I wrote a disclaimer on the back of the check, so I'm really covered.

Costa: Apparently you're a writer, I assume. (Yes) Apparently they're not claiming they own anything in it. They're simply saying they have first rights. They're paying you for first reproduction--

Q: Reproduction rights. And we had an agreement that I would sell them first North American periodical rights.

Legal Claims Printed on Back of Check

Q: What is the legal standing of these claims that publishers may make on a check?

Costa: Not much. Especially after Reid. By writing. Even if you have it in a contract.

At least now, I'll just give out some contracts, so you'll know now, if we don't have time to cover, I've given you, this sort of gets to your point, this one here is form 2(a)(401). These are in form books that used to be legal, and as you see up front it says, "At Work Made for Hire." We touched on it briefly, and I suppose this would go along with what was written on the check. The question hasn't been addressed of course because of the newness of the law. But I don't think the party can redefine by putting labels on a relationship something that the Supreme Court says isn't a work made for hire. No matter what they call it, the court is going to analyze agency, master-servant principles.

Q: In any case, if I get a check, from a publisher, and it says on the back, this is an assignment of rights or some outrageous claim, that I haven't agreed to before I started doing the work, can I just cross that out and endorse the check normally?

Costa: That's what I would do, but I probably wouldn't endorse it without writing a letter to them and crossing it out. First, because I don't think it would hold up in court, but more importantly I wouldn't want to have to be the one to find out. I wouldn't want to have to spend the money to hear that argued that I gave something awya by cashing the check. I would do what you say but I'd do one step more, I would put it in writing, that you have not granted an assignemnt, you've crossed it out, there can be no question.

Q: Once again, why is Reid--If you're a writer, and you do a piece of work, and nothing has been signed, no contract, nothing is verbal, the writer doesn't even have to ask permission of the editor or publisher to remarket the material.

Costa: Correct. That's assuminging you're not on the payroll, and you're not in a typical, you're not like a staff reporter.

Q: You don't have to go to the editor, or the publisher, and ask whether or not you can remarket. It's automatically granted that you can. Unless there's something contrary to that.

Costa: That's correct, in fact the situation is just the opposite. If the publisher, or the editor, wants to reprint, he's got to [go to] you.

Q: The phrase reproduction rights, ... you don't assign anything, but at the same thing you write first North American rights, the publisher still has the right to reproduce excerpts from that article you're written for promotional purposes, let's say. The tricky question comes, what if the publisher then publishes an anthology of articles, from the publication. Can they use your, is that within the context of first North American rights?

Costa: I would say probably not, but that's got to be contemplated, and you've got to have an agreement....

Q: Why can't the writer make it encumbent upon the editor and publisher and charge him accordingly if the editor and publisher wants to reproduce the work in some form?

Costa: That's exactly what's going to happen.

Q: What if they do it without the writer's permission?

Costa: That is copyright infringement. You have not given them the right to do it. But how could you do it? Damages, perhaps royalties.

Q: Under this statute, and its interpretation, the editor or publisher has to come to the writer.

Costa: That's right, unless that's contemplated in the original agreement. You can give them whatever you want....

Writer Must Give Permission for Reprints

Q: I buy an article for my magazine. There's nothing in there that says what the circulation of the magazine is. But as I'm bringing out the issue, the subject of the article says, Oh, you're going to have a great article on our airline, we'd like to buy 2,000 extra copies. He's increasing the circulation. I presume that doesn't concern the author. But suppose after he sees the article in print, he says, that's a great article, would you give me a price for 5,000 reprints. Now normally I do not go back to the writer. But I should.

Q: Damn right.

Costa: Is this [?] narrowly drawn? I assume you have a written agreement, or is this just oral, you can go ahead and do it?

Q: I buy an article for the magazine, and the normal operation of the magazine is that we will sell reprints to subjects of articles. All magazines do that... It may be a 6-page article, and it becomes a 6-page folder, and it says Reprinted form Air World by so-and-so.

Costa: Just the article, not the entire magazine.... If it's just the article itself I would say you had better get the agreement of the author of the article to be able to do it....

Q: You know what he'd get in actual effect? The end result would be he'd get nothing. Because the reprints themselves cost so much to reprint, especially with a lot of color in them, that if you tacked the author's fee on it, you wouldn't be selling the reprint.

Q: A lot of times ... they come not to the writer, but to the magazine.... and they will send out 5,000 copies and the writer doesn't even know about it....

Costa: My position would be that was not contemplated in the original agreement when you commissioned the work.... If you don't know about it you won't be able to sue them.


I discussed the form and as it says here simply defines the work as work made for hire. We're advising clients now that they can't by contract change something that's not a work for hire by saying it is.

Second piece, paragraph 4, paragraph 7. This is an actual contract, for computer software, and it's been changed. There's been an addition to section 7 under the new law. What it does is say you're deemed an employee, you're on our payroll, but if you're not, you've hereby assigned everything.

The other thing I've left you is "The Supreme Court Ruling on Work for Hire by James J. Maughn. Jim is a partner at my firm and he does a lot on computer software, which is analogous to yours, but this ruling definitely effects that. What he's done is something very brief, that sort of encapsulates my speech and may add some other things on what the effect of the ruling is.

If there's not enough, leave me your card and I'll mail you one.