All the Ways in One Case

You can’t enforce what you don’t own.1For a certain value of “own.” That might seem fundamental to copyright law, but it’s frequently overlooked because it seems so obvious. Not knowing who owns a copyright is like not knowing who owns a house.2Actually, people sometimes don’t own the real property they think they own. That’s why there’s title insurance.

But copyright ownership isn’t always intuitive. In fact, it’s frequently downright counter-intuitive. The person who ordered the work might not own the copyright they thought they were buying. An artist doing work on the side might be surprised to find out their employer owns “their” copyrights.

Photograph of a singer and a sound engineer, both working.

Spot the “author” of the sound recording. Photo 103098497 / Music Studio © Ammentorp | Dreamstime.com

The basic rule is: “authors” are the initial owners of their works. OK, but authors are often not the people you think they are. Even if you’re quite sure who owns the copyright that’s being enforced, it pays to run through the following checklist (be sure to click on the footnotes for additional important information):

  1. Identify what human being or beings created the work. If more than one person helped to create the work, then they might jointly own the copyright, which can be awkward.3For two or more persons to be joint authors, they not only have to have made substantial contributions to the finished work but intended their contributions to form a single work.
  2. Find out if the creator created the work for their employer, and was acting within the scope of their employment, at the time.4Careful! “Employee” in this context doesn’t necessarily mean an “employee” for tax purposes! Even form-1099 independent contractors can be “employees,” and form W-2 employees can be independent contractors, under the right circumstances. If so, then the employer is the “author” and thus the copyright owner.
  3. If not, find out if the creator was commissioned—in writing—to make the work AND the work falls into one of nine special categories.5Those categories are 1) contribution to a collective work, 2) part of a motion picture, 3) a translation, 4) a “supplementary work” (like an introduction or illustration for someone else’s work), 5) a compilation, 6) “instructional text,” 7) tests, 8) answers to tests, and 9) an atlas. If BOTH of those are true, then the commissioning party is the “author” and thus the copyright owner.
  4. If not, find out if the creator assigned the copyright to someone in writing.6Alas, the writing requirement isn’t very straightforward, as we’ll see. In this case, the creator is the author, and was briefly—but is no longer—the copyright owner. The assignee is the copyright owner (at least until the next assignment)7This is a fine point, but it sometimes matters whether an employer or commissioning party acquired the copyright via authorship or assignment. If by assignment, then the creator will—much later—have an opportunity to claw back the copyright through what are known variously as “termination rights” and “reversionary rights.”.

There’s a great deal of nuance here, as the footnotes explain. But instead of explaining all the nuance, let’s look at a single case that explores all four paths to ownership, Yellowcake, Inc. v. Hyphy Music, Inc.

The Facts: A Copyright Is Born

Hyphy Music is a record label. This is to say, it produces recorded music. Hyphy asked a musician, Jesus Chavez, Sr., to record some music. Hyphy selected the songs, arranged the music, and (let’s assume) made all the major artistic decisions regarding Chavez’s performance.8I say “let’s assume” because it doesn’t make sense that you’d hire a guy because he’s a great musician then tell him how to do his job. Hyphy paid Chavez by the track (as opposed to, say, a salary). Chavez then assigned the copyrights in the sound recordings to Hyphy.

None of this was in writing. This would become a problem.

After the songs were successfully performed by Chavez and recorded by Hyphy, and after Hyphy began to distribute the sound recordings, another record label, Yellowcake, approached Chavez. Yellowcake believed that Chavez still owned the copyright to his performance in the sound recordings. (Guess why.) Chavez tried to explain that he assigned the copyrights to Hyphy, but Yellowcake wasn’t so sure. Chavez’s assignment wasn’t in writing, after all. And copyright assignments must be in writing…

So Yellowcake bought the copyrights from Chavez—or, at least, it hoped it did—and began selling the exact same Chavez sound recordings that Hyphy was selling. This pissed off Hyphy, which fired off a letter threatening a lawsuit. Yellowcake was feeling pretty confident in its position, so it sued first, seeking a declaration that it, not Hyphy, owned the copyrights. Hyphy countersued for copyright infringement.

The Ruling: Custody Battle

Hyphy is definitely in a spot of trouble, but things haven’t gone quite as Yellowcake hoped. Let’s run this situation through the checklist above.

First, who created the sound recordings? Obviously, Chavez did. But less obviously, so did a number of Hyphy employees—maybe! There’s a great deal of debate about whether sound engineers, for example, are co-creators of the sound recordings they help produce.9I personally like to take an expansive view of co-authorship, but courts generally don’t. If a Hyphy sound engineer is a co-creator, then Hyphy would be a co-author of the sound recordings with Chavez!

Well, this isn’t quite the slam dunk that Hyphy was hoping for. That’s because, even if it were true, Chavez would still be a co-author. That means, when he sold his copyright to Yellowcake, Yellowcake become a part owner of the copyright. That’s right, Hyphy and Yellowcake would each own half the copyright—awkward, but permissible. More important, co-owners can’t sue each other for infringement. Any co-owner of a copyright may exploit the copyright however it sees fit, without needing any of the other co-owners’ permission. It does have an obligation to “account” to the other co-owners for their share of the profits. Thus, if Yellowcake made $10,000, it would owe Hyphy $5,000, but Hyphy wouldn’t have a claim for copyright infringement against Yellowcake.

The court decided not to reach a definitive decision about co-ownership since it didn’t matter for current purposes. Hyphy had a claim for copyright infringement, and joint authorship didn’t actually help that claim.

Gainful Employment (But Gainful for Whom?)

Moving on, then. Second, was Chavez an employee? Maybe! At first, he doesn’t look much like an employee. Hyphy invited him for a project and paid him on a per-track basis. But: he used Hyphy’s resources to make the music. He used Hyphy’s recording studio, Hyphy’s sound engineers, maybe some in-house musicians, and Hyphy’s arrangements. More important, he also (allegedly) took artistic direction from Hyphy.

Whether a creator is an employee comes down to the putative employer’s “right to control the manner and means by which” the work is made. My hunch is that Chavez wasn’t an employee, but there are some missing facts that could change things. The court, at least, was at least open to the idea and gave Hyphy a second chance to explain how Chavez was an employee.

Third, did Hyphy specially commission Chavez to make the sound recordings? Absolutely! But it doesn’t matter because (1) the “work made for hire” agreement wasn’t in writing, and (2) sound recordings don’t fall into one of the nine special categories of works eligible for such treatment.10Once upon a time, for a very brief time, Congress surreptitiously made sound recordings a tenth special category eligible for commissioned works made for hire. What followed is the stuff of legend: recording artists, led by Sheryl Crow and Don Henley, among others, declared war and so annihilated the change that Congress extirpated the change, such that sound recordings were never a tenth special category.

Let It Be Written

Fourth, did Chavez assign the copyright to Hyphy in writing? Yes, he assigned it, but no, he didn’t do so in writing. Case closed? Well, it’s a harder question than that, actually. You see, the point of the writing requirement was to protect the author to make sure they knew what they were doing when they assigned their copyrights away. Another reason for the requirement was to make sure there wasn’t a dispute between the parties about who assigned what to whom.

In this case, the author was Chavez, so it’s his rights that are being protected. Yellowcake is a stranger to that transaction, so it can’t benefit from the writing requirement. Further, Chavez admits that he orally assigned the copyrights.

So, Hyphy owns the copyright after all (through assignment rather than through ownership)? No! Because Hyphy made a blunder. In its counterclaim, it not only sued Yellowcake, but it unnecessarily sued Chavez! And Chavez can insist on the writing requirement.

Whew!

I barely need to mention the moral of this story. It sure helps to put important agreements in writing. This happens to go double for relationships involving copyright.

Thanks for reading!

Rick Sanders

Rick is an intellectual-property litigator. He handles lawsuits, arbitrations, emergency injunctions and temporary restraining orders, opposition and cancellation proceedings, uniform dispute resolution proceedings (UDRPs), pre-litigation counseling, litigation avoidance, and other disputes, relating to copyrights, trademarks, trade secrets, domain names, technology and intellectual-property licenses, and various privacy rights. He has taught Copyright Law at Vanderbilt University Law School. He co-founded Aaron | Sanders with Tara Aaron-Stelluto in 2011.

    Footnotes

    Footnotes
    1 For a certain value of “own.”
    2 Actually, people sometimes don’t own the real property they think they own. That’s why there’s title insurance.
    3 For two or more persons to be joint authors, they not only have to have made substantial contributions to the finished work but intended their contributions to form a single work.
    4 Careful! “Employee” in this context doesn’t necessarily mean an “employee” for tax purposes! Even form-1099 independent contractors can be “employees,” and form W-2 employees can be independent contractors, under the right circumstances.
    5 Those categories are 1) contribution to a collective work, 2) part of a motion picture, 3) a translation, 4) a “supplementary work” (like an introduction or illustration for someone else’s work), 5) a compilation, 6) “instructional text,” 7) tests, 8) answers to tests, and 9) an atlas.
    6 Alas, the writing requirement isn’t very straightforward, as we’ll see.
    7 This is a fine point, but it sometimes matters whether an employer or commissioning party acquired the copyright via authorship or assignment. If by assignment, then the creator will—much later—have an opportunity to claw back the copyright through what are known variously as “termination rights” and “reversionary rights.”
    8 I say “let’s assume” because it doesn’t make sense that you’d hire a guy because he’s a great musician then tell him how to do his job.
    9 I personally like to take an expansive view of co-authorship, but courts generally don’t.
    10 Once upon a time, for a very brief time, Congress surreptitiously made sound recordings a tenth special category eligible for commissioned works made for hire. What followed is the stuff of legend: recording artists, led by Sheryl Crow and Don Henley, among others, declared war and so annihilated the change that Congress extirpated the change, such that sound recordings were never a tenth special category.