Source: https://www.deneaulaw.com/blog/2017/6/14/ip-copyright-blog-series-pt-2
Timestamp: 2019-04-19 10:21:19+00:00

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This is Part 2 to a three-part series on Copyright Law as it relates to Cyberspace. Please review Parts 1 and 3 for a complete overview.
In the first installment of this blog series, we discussed the basics of Copyright Law as it relates to websites and online content. In this installment, we will look at the nuances of authorship, ownership, transfers and licenses of copyrightable content in the digital world.
It may seem fairly straight-forward, but authorship of a copyrighted work can be a tricky subject. Determining legal authorship is important, particularly because ownership of the copyright vests originally in the author of the work. The easiest situations occur when there is one sole author of a work, but this is usually not the case. Most categories of copyrightable works like music, film or even literary works are often the collective product of multiple people. In those instances, determining the “author(s)” can dictate who has copyright ownership of the work, as well as the exclusive rights that go along with it.
For example, if you create a web page consisting of words, pictures and music each of which have been created by a different author, is this web page a joint work? The answer is most likely no since all the elements can be separated easily and exist independently of one another. Additionally, the web page as a whole (i.e., the arrangement of the works) is a separate copyright, known as a “compilation” under 17 U.S.C § 101. On the other hand, think about a piece of music where one person played the instruments and a studio engineer placed effects on those instruments. In such a situation, there would be no feasible way to separate their contributions. Consequently, the piece of music would be considered a joint work.
As a practical matter, authors should try and steer clear of engaging in a joint work since they will have to share their rights with others. This means that no one person has sole control over the copyright and any one of the joint authors can exercise their rights as owner of the copyright without the others’ permission. So how do you work with people on projects where your respective contributions will be merged and inseparable without allowing others the ownership rights? An express written agreement for a “work made for hire” will usually do the trick.
Under 17. U.S.C. § 101, a work made for hire (WMFH) is “a work prepared by an employee within the scope of his or her employment” or a work specially commissioned for use as a contribution to another work, but only “if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.” Under 17 U.S.C. § 201(b), “the employer or other person for whom the work was prepared is considered the author . . . [and] owns all of the rights comprised in the copyright.” Like a joint work, it can be problematic to determine whether a work has been created as a WMFH when there is no express written agreement.
The most crucial determinations to make are whether there was an employee-employer relationship and if so, whether the employee created the work within the scope of their employment. For example, if a manager at a software company tells an engineer employed with that company to create a program for use at work, the resulting program is probably a WMFH, and thus owned by the company. However, if an employee who works in the human resources department at a software company creates a program on his own, it is probably not a WMFH and thus, owned by the employee.
A WMFH agreement is usually what software, music, film and television companies use to ensure that the company commissioning the project own the copyright outright, instead of sharing ownership with the many people who contributed to the work as whole. An important aspect of the protection afforded to copyright owners is preventing others from using the work in a manner of which the owner doesn’t approve. If someone commissions a work and does not have the contributors to the work execute an expressly written WMFH agreement, he or she will have to share the profits from that copyright and will not be able to prevent the contributors from using the work in any way they please. Since a WMFH must exist the moment the work is fixed in a tangible medium, a WMFH agreement should generally be executed prior to completion of the project. In today’s digital world where more and more people are working with one another online from remote locations, it would be beneficial to discuss each party’s expectations of rights prior to beginning the project so there is no confusion when the work is eventually completed.
It’s important to note that a WMFH is different than a transfer of ownership as defined in 17 U.S.C. § 201(d). For one, a WMFH means that the employer or contractor is considered by law to be the original author of the work, while a transferee of ownership is not considered as such. This has major implications due to the fact that an original author of a work gets the full statutory duration of copyright ownership under 17 U.S.C. § 302 (life of the author plus 70 years), whereas a transferee may lose his or her rights down the road. 17 U.S.C. § 203 allows the grantor (or his heirs) to terminate a transfer of copyright between 35 and 40 years from the date of the transfer. In most cases this is not a big issue, however owners of works that stand the test of time (usually very valuable works) can lose a major estate asset due to this technicality, at which point it could become a very big deal. This distinction between a WMFH and a transfer of copyright is especially important given that in the digital age, license agreements and the creation of derivative works are a major source of revitalizing profit from an old copyright.
Before getting into revitalizing an old copyright, we should discuss what a license agreement is exactly, and why the importance of licenses has exploded in the digital age. A license agreement is when the owner of a particular type of intellectual property (licensor) grants a third party (licensee) a right to use the intellectual property for a limited purpose without transferring all the rights of a copyright owner in the process. In the case of copyrights, traditionally common license agreements are generally between owners of content and distributors of that content (think about a book publisher/author who licenses to retailers the right to sell that book in return for a percentage of profits). Copyright license agreements are also common when a content creator wishes to use someone else’s content as part of their work. A good example is a film company who wishes to use a copyrighted song in their film.
17 U.S.C. § 202 provides that the ownership of a copyright is separate and distinct from the material object in which the work is embodied. This is why when you traditionally purchased a physical book or a DVD, you owned the product, not the copyrighted material embodied in it. The digital age however, is changing the way people “purchase” things. You’ve probably bought, streamed or otherwise accessed a song, film, e-book or game through an online provider like iTunes, Amazon, Google Play or Netflix in the past. So where is the physical CD, DVD, hardback book or game cartridge in which the copyrighted material is embodied? Nowhere? So what did you purchase? The answer is nothing. All of those online providers require their customers to execute a “license” or “terms of service” agreement prior to joining up. Therefore, even when you paid $20 for a movie from iTunes and downloaded it to your computer, you really “licensed” it subject to a number of terms and conditions. In the digital age, license agreements are the main way in which companies authorize consumer downloads of copyrighted content.
As stated earlier, license agreements are also important in the creation of derivative works. When a film company wants to make a film like Harry Potter of Hunger Games, it usually licenses the content for the limited purpose of making the film (and possibly merchandising and other means of profit-making endeavors). Licensing content to third parties for the purpose of creating derivative works in contemporary mediums is a major way copyright owners can take full advantage of their copyrights.
This brings us back to the distinction between a WMFH and a transfer of copyright. In the last hundred years, radio, television, film and the internet emerged as mediums of expression previously thought impossible. Large content providers like Marvel and Disney are prime examples of companies that have been able to revitalize the profitability of old copyrights through licensing agreements with companies that specialize in modern mediums and technology. Now, with copyright duration at a historical high, there is no telling what expressive mediums may emerge or re-emerge with new technology (like 3D films) during the life of your copyright in the digital age. So if you’re working with others and wish to own a copyright outright, make sure to discuss your expectations before creating the work (or before it is finished and fixed in a tangible medium) and aim to have a WMFH agreement executed in your benefit if possible.
Thanks for reading! In the third installment, we will look at the “safe harbors” provided by the Digital Millennium Copyright Act (the “DMCA”). If you have further questions, please call The Deneau Law Firm, PLLC at (480) 306-5977 for an initial consultation.

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