Intellectual Property Law

Chapter 12 Lecture Notes

Major points addressed in the chapter materials include the following:

1. Determining the owner of copyright rights is important because it affects the ability to
license or transfer a work and the duration of copyright.

2. Ownership of a physical object is separate and distinct from ownership of the
copyright embodied in the material object (subject to the first sale doctrine). For
example, purchasing handwritten sheet music merely gives one the right to the
physical object. The author (the composer) retains the exclusive rights in the work,
such as rights to perform, distribute, and reproduce the work.

3. A joint work is a work created by two or more authors with the intention that their
contributions be merged into inseparable parts of a unitary whole. Only one copyright
exists in the created work. It is the intent of the parties at the time a work is created,
not their later intent, which determines whether a work is a joint work.

4. Merely making suggestions or giving directions to one creating a work is not
sufficient to make one a joint author. To be a joint author, one must contribute
separately copyrightable material/authorship.

5. Courts presume the authors of a joint work contributed equally to the work (unless the
parties provide otherwise). Thus, profits arising out of the work will be divided
equally unless the parties have agreed to some other division.

6. Each author of a joint work has the right to use the work, prepare derivative works
based on it, perform it, display it, and so forth, without seeking the other co-author’s
permission. One author cannot exclude the other from using the work or exercising
the rights of copyright ownership. Nevertheless, if profits arise out of such uses, an
accounting must be made so each author shares in the proceeds.

7. Any co-author may grant a nonexclusive license to another to use the joint work
without permission from the other co-owners; however, granting an exclusive license
requires consent from all co-authors.

8. If a work is a joint work, the copyright lasts until 70 years after the last survivor’s
death.

9. The author of an original work may permit another to adapt it. In such a case, the new
derivative work exists independently of the original work. The author of the original
work cannot reproduce or perform the derivative work without permission; and the
author of the derivative work cannot create further works based on the original work
without permission.

10. Copyright in an original work lasts 70 years after its author’s death and copyright to
the derivative work lasts 70 years after its author’s death.

11. As to collective works, the compiler acquires only the right to distribute or reproduce
the collection and has no rights to the original underlying works.

12. There is an exception to the general rule that a person who creates a work is the
author of it and the owner of the copyright therein: the “work made for hire” doctrine.
If a work is one made for hire, the author is considered to be the employer or the
commissioning party and not the employee or actual person who created the work.

13. There are two types of works classified as works made for hire: works prepared by
employees in the scope of their employment and certain categories of specially
ordered or commissioned works.

14. Copyrights in works prepared by employees are presumptively owned by their
employers. If a work is created by an independent contractor (rather than by an
employee), the work is owned by the independent contractor (unless otherwise
agreed).

15. In determining whether an individual is an employee (such that the copyright would
be owned by the employer and not the employee/creator), courts consider a variety of
factors, including the control by the employer over the work and the employee,
whether the employer gives the person benefits and pays taxes on the person’s wages,
where the individual works, and so forth. Recent cases often give significant weight
to whether the hiring party provides benefits and pays taxes for the hired party; if not,
the hired party is generally held to be an independent contractor and not an employee.

16. A work must be created within the scope of employment to be a work made for hire.
Thus, a work created by an individual before joining a company or created at home
during the evenings and weekends is not made for hire.

17. Many employers require employees to sign agreements acknowledging that works
created by the employees will be works made for hire. Often agreements contain a
provision that if the work is determined not one made for hire, the employee
irrevocably and immediately assigns all rights to the work to the employer.

18. If the work is not one prepared by an employee but is rather one prepared by an
independent contractor, it can be deemed a work made for hire (and thus owned by
the commissioning party) if three conditions are met: it is a specially ordered or
commissioned work; the parties agree in writing the work is one made for hire; and
the work falls into one of nine specially enumerated categories under the Copyright
Act (such as translations, compilations, instructional texts, tests, atlases, etc.).

19. While the parties can agree that the commissioning party owns the work, such will
not convert a work that does not fall into one of the nine statutorily designated
categories into one made for hire. Thus, the safest approach is for the parties to agree
in writing that the work is one made for hire, but that if it is later determined not to be
one made for hire, by the same document, the work is automatically assigned and
transferred to the commissioning party.

20. Duration of copyright rights in works made for hire is 95 years from publication or
120 years from creation, whichever is shorter.

21. Any or all of the exclusive rights of the copyright owner (rights to reproduce, adapt,
etc.) can be transferred or licensed to another party or parties. The rights are divisible.
Thus, one party can be granted the right to adapt a work and another can be granted
the right to distribute the work. Rights can be for varying time lengths and can be
limited to certain geographic areas.

22. A transfer of exclusive rights (meaning that one person is granted rights rather than
several parties) must be in writing and signed by the copyright owner (or his/her
agent) to be valid. Granting rights on a nonexclusive basis need not be in writing.

23. Copyrights can be pledged to secure obligations. If the copyright owner defaults in
his/her obligations, the secured party would seize the copyright that was pledged as
collateral.

24. Transfers or licenses of copyrights need not be recorded with the Copyright Office,
although recordation is prudent because it provides notice of rights in the copyrighted
work and may establish priorities of conflicting transfers.

25. Because young artists and authors may transfer rights to their works when they are
young and do not understand the value of their works, the Copyright Act allows
owners of copyrights to terminate or set aside their earlier transfers after 35 years and
recapture their works.

26. The Act provides a fairly elaborate procedure for terminating grants and there are two
separate statutes: one for transfers that occurred after January 1, 1978, and one for
those that occurred before January 1, 1978. Transfers of works made for hire cannot
be set aside or terminated. Transfers by will cannot be set aside or terminated. For
transfers that can be terminated, either the author can terminate, or if the author is not
living, the Act identifies the successors who may terminate the earlier transfer.

27. Generally, termination is effected at any time during the five years beginning in the
36th year after the original transfer. A notice is sent to the grantee (and must be
served within specific time periods) and must be recorded with the Copyright Office.
Upon the effective date of termination, the rights in the work automatically revert to
the author (or his/her successors).

28. Under the 1909 Act, a copyright lasted for a first term of 28 years and was then
eligible for renewal for another 28 years.

29. Under the 1976 Act (and the Sonny Bono Copyright Term Extension Act of 1998),
copyright extends for the life of the author plus 70 years (for joint works, the term
lasts for 70 years after the last surviving author’s death, and for works made for hire
the duration is 95 years from publication or 120 years from creation, whichever is
shorter). Terms of copyright run through the end of the calendar year in which they
would expire.

30. The provisions for copyrights for works created before January 1, 1978, are very
complex.

31. Lost copyrights (for works of U.S. origin) cannot be restored or revived.