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and Statutes: The Case for Restructuring the U.S. Legal System and Awarding Copyrights to Authors Behind Works for Hire

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Superman and Statutes: The Case for Restructuring the U.S. Legal System and Awarding Copyrights to Authors Behind Works for Hire I. Introduction In the early 1800s, an author was understood as [o]ne who
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Superman and Statutes: The Case for Restructuring the U.S. Legal System and Awarding Copyrights to Authors Behind Works for Hire I. Introduction In the early 1800s, an author was understood as [o]ne who produces, creates, or brings into being; as, God is the author of the universe. 1 This antiquated definition heavily emphasized an author s creation power and remains critical when understanding the original purpose of the copyright clause. 2 Early American case law and copyright statutes heavily focused on a work s creation when determining copyright assignment, even when authors created what came to be known as works for hire. 3 As Congress began passing statutes attempting to clarify what was copyrightable and who was entitled to copyrights, however, a shift began away from the original interpretation, which favored authors, and towards supporting hiring parties instead. 4 From around the beginnings of the twentieth century lasting until the 1976 Copyright Act (the 1976 Act ), the copyright 1 Author, 1828 Webster s Dictionary, (last visited Dec. 15, 2013)(stating author s 1828 definition). 2 For a further discussion of the original interpretation of the copyright clause, see infra notes See, e.g., Binns v. Woodruff, 3 F. Cas. 421, 423 (C.C. Pa. 1821) (reiterating copyrights meant for individual creating work). 4 See, e.g., The 1909 Copyright Act, 35 Stat (1909) (hereinafter 1909 Act )(revised to 17 U.S.C )(introducing work for hire). 1 pendulum swung almost completely away from authors; hiring parties were frequently assigned work for hire copyrights on the presumption that copyright remained with the party commissioning the work, regardless of the hiring party s actual involvement in the work s creation. 5 Recognizing authors unequal bargaining position due to the inability to initially determine a work s true value, Congress created termination rights in the 1976 Act. 6 While professing to protect the underpowered author, however, Congress expanded the work for hire provision in the 1976 Act, effectively undermining and disenfranchising the very authors Congress claimed to protect. 7 This article argues for restructuring the termination and work for hire frameworks to award copyrights to authors of works for hire while granting an automatic fifty-six year exclusive copyright assignment to the hiring party following the work s creation. 8 This can be justified through both a historical and moral rights perspective, which this article argues has been 5 Julie Katzman, Note, Joint Authorship of Commissioned Works, 89 Colum. L. Rev. 867, 867 (1989) (presuming copyright remained with hiring party under 1909 Act). 6 See Termination of transfers and licenses granted by the author, 17 U.S.C. 203 (2002)(outlining termination framework for post 1976 works); see also Duration of copyright: Subsisting copyrights, 17 U.S.C. 304(C)(2002)(outlining termination procedure for pre 1976 works). 7 Definitions, 17 U.S.C. 101 (2010)(defining work for hire). 8 For a further discussion of this article s posited work for hire framework, see infra notes and accompanying text. 2 both explicitly and implicitly recognized by American courts and Congress since America s founding. 9 II. History of the Works for Hire Doctrine a. Works for Hire and Early America The Constitution grants Congress the power to grant copyrights [t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries (the copyright clause ). 10 Perhaps recognizing the substantive vagueness of the copyright clause, Congress passed its first copyright act in 1790 and explicitly defined what works were afforded copyright protection. 11 Although the Copyright Act of 1790 (the 1790 Act ) provided some substantive guidance, it was extremely limited in scope, as it only explicitly protected maps, charts, and books. 12 Furthermore, the 1790 Act did not define who or what constituted an author and did not mention who ought to control the copyright for works for hire For a further discussion of the historical and moral rights arguments justifying this article s posited work for hire framework, see supra notes U.S. Const. art I, 8, cl Copyright Act of 1790, 1 Statutes at Large, 124 (1790)(hereinafter 1790 Act )(appealed and revised to 17 U.S.C )(qualifying substantive and procedural copyright law) Act, 1 Statutes at Large, (limiting copyright coverage to only maps, charts, and books). 13 Id. (omitting mention of works for hire and employers for assigning copyrights). 3 When examining early case law interpreting the copyright clause and the 1790 Act in the context of works for hire, early courts often emphasized the insufficiency of assigning a hiring party the copyright merely for employing an author, such as in the case Binns v. Woodruff. 14 Woodruff was decided in 1821 and involved a plaintiff paying several artists a flat fee to create and sell prints of the Declaration of Independence. 15 Upon completing the work, the plaintiff deposited a copy and filed for a copyright. 16 The plaintiff later sued the defendant for copyright infringement, alleging that the defendant copied the plaintiff s work, and violated the plaintiff s copyright. 17 The Woodruff court s threshold issue was whether the plaintiff created the print and deserved copyright protection, as Congress had intended under the 1790 Act. 18 The Woodruff court analyzed the 1790 Act and concluded [t]he person then who is intended and described as a proprietor of a copyright, is one who shall not only invent and design, but who shall also engrave, etch, or work the print to which the right is claimed; or who, from his own works and inventions, shall cause the print to be designed and engrave, etched, or worked See Binns v. Woodruff, 3 F. Cas. 421, 424 (C.C. Pa. 1821)(prohibiting copyright assignment to hiring party). 15 Id. at (employing artists to create work for hire). 16 Id. at 423 (depositing work for copyright protection). 17 Id. (suing defendant for alleged copyright infringement). 18 Id. (reviewing whether plaintiff was entitled to copyright). 19 Woodruff, 3 F. Cas. at 423 (determining copyright s intended for author). 4 The Woodruff court determined that the plaintiff was not entitled to a copyright, stating the plaintiff did not design and invent, nor did he, from his own work and inventions, cause this print to be designed and engraved. 20 The Woodruff court s emphasis on using copyright to protect the actual author creating the work demonstrated a more widely recognized American vision of authorship within the nineteenth century, which heavily valued an author s individuality and creativity. 21 Early courts recognized exceptions to assigning authors copyrights in their created works, however, as shown in Wheaton v. Peters. 22 In Wheaton, the plaintiff was a court reporter who compiled twelve books of Supreme Court decisions ranging from 1816 until The plaintiff sold the copyright to a publisher before the first reporter was compiled and the publisher subsequently filed for copyright. 24 The Wheaton defendants published their own volume containing all of the Supreme Court s decisions from its inception up until 1827 and 20 Id. (finding for defendants because plaintiff himself did not create work). 21 Catherine L. Fisk, Article, Authors at Work: The Origins of the Work-for-Hire Doctrine, 15 Yale J.L. & Human. 1, 14 (2003)(justifying copyright protection for authors over hiring party because of author s work and imagination). 22 Wheaton v. Peters, 33 U.S. 591, 593 (1834)(denying copyright for collected court reports). 23 Id. at 591 (compiling volumes of court reports by plaintiff). 24 Id. (selling copyright prior to compilation completion). 5 incorporated the first volume of the plaintiff s reports. 25 The plaintiff sued, alleging that the defendant infringed on the plaintiff s copyright. 26 The Wheaton court did not address whether the plaintiff had created a work for hire, but instead focused on what the enacted copyright laws were meant to actually protect. 27 The Wheaton court concluded the plaintiff did not initially have a copyright to sell, as a copyright was only created after satisfying the filing requirements, which included giving public notice and depositing a copy of the work. 28 Therefore, the plaintiff could not sell the copyright before the work was actually created and the filing requirements were followed. 29 The Wheaton court went a step further, concluding that [n]o reporter of the decisions of the [S]upreme [C]ourt has, nor can he have any copyright in the written opinions delivered by the court: and the judges of the court cannot confer on any reporter any such right. 30 This reflection emphasized both preventing others from copyrighting judges original written decisions, a similar justification behind the Woodruff opinion, and also demonstrated a willingness 25 Id. at 595 (publishing by defendants of reporter including plaintiff s reports). 26 Id. (filing suit over alleged copyright infringement). 27 Wheaton, 33 U.S. at 592 (determining copyright protects author s property within the work). 28 Id. at 592 (acknowledging filing requirement for copyright). 29 Id. at (declaring plaintiff s copyright invalid for filing requirement violation). 30 Id. (declaring copyrights unavailable for Supreme Court decisions). 6 to prevent authors from acquiring copyright protection in certain circumstances. 31 Despite an early emphasis on assigning original authors copyrights, authors could transfer their copyrights through contract, as demonstrated by Pierpont v. Fowler. 32 In Fowler, a dispute arose over whether an author assigned the renewal period when assigning the initial copyright. 33 The Fowler court concluded the author had not assigned away the renewal period, emphasizing [i]t was the genius which conceived and the toil which compiled the book that is to be rewarded by even the first copyright, and no one ever dreamed that an assignee could alone take out the second or extended term, unless he has paid for it, clearly contracted for it, and in equity, rather than by any technical law, is to be protected in it. 34 Determining that hiring parties were not entitled to the copyright of works by authors without an express agreement was a trend that lasted until the end of the Civil War. 35 Near the end of the nineteenth century, courts began recognizing the 31 For a further discussion of early American emphasis on protecting original work, see supra note 21 and accompanying text. 32 Pierpont v. Fowler, 19 F. Cas. 652, 658 (C.C. Mass. 1846)(acknowledging potential copyright assignment through contract). 33 Id. at (reviewing whether contract contained additional copyright term assignment). 34 Id. at (concluding author had not contracted away second copyright assignment term). 35 See Catherine L. Fisk, Article, Authors at Work: The Origins of the Work-for-Hire Doctrine, 15 Yale J.L. & Human. 1, 32 (2003)(writing no court prior to Civil War awarded employers copyrights of employees only due to employment). 7 employment relationship as a form of contract. 36 This coincided with the rise of corporations as both employers and hiring parties, to whom courts began assigning copyrights. 37 b. Works for Hire and the Copyright Act of 1909 By the early twentieth century, the first piece of federal copyright legislation to expressly mention works for hire was enacted: the Copyright Act of 1909 (the 1909 Act ). 38 The 1909 Act stated the word author shall include an employer in the case of works made for hire. 39 Despite expanding the definition of author to incorporate hiring parties, the 1909 Act never explicitly defined what works for hire or employers were. 40 Three justifications emerged under the 1909 Act for awarding copyrights to hiring parties for works for hire: (1) The work is produced on behalf of the employer and under his direction; (2) the employee is paid for the work; and (3) the employer, since he pays all the costs and bears all the risks of the loss, should reap any gain. 41 The first and second justifications encapsulated the two-pronged instance and expense 36 Id. (describing evolving interpretation of employment relationship). 37 Id. (detailing rise of corporations as employers) Act, 35 Stat. 23 (1909)(revised to 17 U.S.C )(awarding copyrights to employers in works made for hire) Act, 35 Stat. 62 (1909)(revised to 17 U.S.C )(extending copyright assignment to employers). 40 Id. (omitting definitions of work for hire and employer). 41 Register of Copyrights, U.S. Copyright Office, Rep., Register s Report on the General Revision of the U.S. Copyright Law 52 (1961)(justifying work for hire doctrine). 8 test, which determined whether an author s creation was a work for hire under the 1909 Act. 42 Under the instance and expense test, a hiring party was entitled to an author s copyright when the employer induces the creation of the work and has the right to supervise the manner in which the work is carried out. 43 Instance was defined as how much power the hiring party had to supervise the author s work. 44 A hiring party s actual creative contributions to or oversight of the work strongly indicated that the piece fell into the work for hire category. 45 Satisfying the instance prong without also satisfying the expense prong was insufficient to deem the piece a work for hire. 46 Under the 1909 Act, expense was regarded as the resources a hiring party invested into creating the work. 47 The expense prong considered a number of factors including payment, providing tools, and providing overhead. 48 Courts often focused on the payment structure for the work, with royalties weighing 42 For a further discussion of the instance and expense test, see supra notes and accompanying text. 43 Martha Graham School and Dance Foundation. v. Martha Graham Center of Contemporary Dance, 380 F.3d 624, 635 (2d Cir. 2004)(outlining instance and expense test parameters). 44 Marvel Characters, Inc. v. Kirby, 726 F.3d 119, 139 (2d Cir. 2013)(interpreting instance prong of instance and expense test). 45 Id. (emphasizing hiring party s involvement as weighing towards work for hire). 46 Id. (requiring both prongs of instance and expense test be satisfied for work for hire). 47 Id. at (clarifying expense prong of instance and expense test). 48 Id. at 140 (listing relevant factors for expense prong). 9 against work for hire and a flat fee weighing for a work for hire. 49 If a hiring party satisfied both the instance and expense prongs, the hiring party was presumed to be the work s author and the copyright remained with the hiring party. 50 The only way an author could overcome this presumption was through a formalized agreement to the contrary. 51 This shift away from traditionally emphasizing an author s copyright in the work highlighted an implicit presumption under the 1909 Act that copyrights vested with the commissioning party. 52 One case that applied the instance and expense test was Siegel v. National Periodical Publications (hereinafter Siegel I ). 53 The Siegel I plaintiffs developed Superman in 1933 and sold the rights in 1938 to the defendant. 54 The plaintiffs entered into a written agreement with the defendant transferring all rights and goodwill attached to Superman. 55 A supplemental agreement was entered into between the plaintiffs and defendants in 1939, stating the defendant had all right of copyright and 49 Marvel Characters, 726 F.3d at 140 (highlighting payment method for work for hire determination). 50 Id. (awarding copyright to hiring party for satisfying instance and expense test). 51 Id. (demanding contract to contrary if hiring party satisfied instance and expense test). 52 Julie Katzman, Note, Joint Authorship of Commissioned Works, 89 Colum. L. Rev. 867, 867 (1989)(identifying presumption copyright remained with hiring party). 53 Siegel v. National Periodical Publications, 508 F.2d 909, 914 (2d Cir. 1974)(hereinafter Siegel I)(applying instance and expense test to Superman copyright). 54 Id. at 911 (retelling Superman s inception). 55 Id. (contracting to release all Superman s rights to defendant). 10 all rights to secure copyright registration in respect to all such forms of reproduction The plaintiffs later sued to annul the contracts and the court applied the instance and expense test to determine whether Superman was a work for hire. 57 The court emphasized looking at whether the motivating factor in creating the work was the hiring party. 58 The court concluded Superman could not have been created at the instance and expense of the employer, as Superman was developed years before there was ever a relationship between the plaintiffs and defendant, and therefore Superman was not a work for hire. 59 c. Works for Hire and the Copyright Act of 1976 Although Siegel I demonstrated an example where original authors recaptured the copyright for an alleged work for hire, the vast majority of authors creating works for hire within this time period were not as fortunate. 60 In part due to recognizing the complexities of copyright and works for hire, Congress 56 Id. (amending initial contract and again releasing Superman copyright to defendant). 57 Id. at 911, 914 (suing to annul contract and ensure Superman not work for hire). 58 Siegel I, 508 F.2d at 914 (analyzing hiring party s involvement in Superman creation). 59 Id. (determining Superman not created at hiring party s instance and expense). 60 For a further explanation of Siegel I, see supra notes and accompanying text. 11 passed the 1976 Act. 61 The 1976 Act was the first time Congress defined works for hire and also introduced several new tools for shifting copyright power back towards original authors and away from hiring parties. 62 Under the 1976 Act, a work for hire was defined as a (1) work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. 63 Congress further recognized the difficultly in authors effectively valuing the work to be created, putting authors in an unenviable position of negotiating over the speculative value of a work. 64 As an attempt to remedy this unequal bargaining position, Congress included termination rights for authors. 65 Termination rights enabled authors to reclaim their copyrights at certain points in time if their copyright was signed away to 61 For a further discussion of the 1976 Act, see infra notes and accompanying text. 62 See 1976 Act, 17 U.S.C. 101 (2010) (defining work made for hire). 63 Id. (stating Congress s work made for hire definition). 64 H.R. Rep. No th Cong. 203 reprinted in 1976 U.S.C.C.A.N. 5659, 5740 (explaining reasoning behind including termination rights in 1976 Act). 65 For a further discussion of termination rights, see infra notes and accompanying text. 12 a hiring party or other individual. 66 Congress stressed that termination rights were needed because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work s value until it has been exploited. 67 Notably, Congress retroactively applied termination rights, enabling authors to reclaim their copyrights for works created prior to the 1976 Act. 68 Termination rights were not available to all authors, however; a copyright could not be reclaimed if the work was in the public domain or a work for hire. 69 Despite Congress s best efforts defining work for hire, difficulties arose when courts attempted to determine which authors were employees, as Congress never
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