If I pay someone to create something for me, do I own the copyright to the work?

If I pay someone to create something for me, do I own the copyright to the work?

The answer to that question first depends on whether the person you’re paying to create the work is your employee, or whether you’re paying the person informally to do the work as an “independent contractor.”
Generally, creative work made by employees automatically becomes the property of their employer. For example, if an engineering firm hires an engineer to write software code, any software that that engineer writes as part of his normal duties of employment is owned by the firm. This is commonly referred to as the “work-for-hire” doctrine. This doctrine, that automatically gives copyright ownership to the employer, is an exception of the standard copyright rules, which normally give copyright ownership directly to the creator of a work.
The “work for hire” rules only give employers rights to creative work that is made “in the ordinary course of” the employee’s employment. If the work is created in a manner outside of the scope of the agreed-to job description, then it’s likely that traditional rules apply and the employee himself still owns the work. 
For example, imagine you work for a portrait photography company in the mall to take photos of the costumers. You’re also the lead singer of a band. Every night, while you wait for customers to come in, you write your band’s songs. The photography company certainly owns the portraits you take during the day, but they almost certainly do not own the songs you write while at work. That’s an easy example.
In the real world, the more difficult scenarios happen with entertainment, advertising, and education workers. For staff writers of television shows, illustrators and designers who work in advertising, and professors who do technical research or work on research papers and books, it’s hard to differentiate the type of work that is made in their job descriptions and what type of work is not. 
For example, what if a TV writer hits a dead-end on the script that he was assigned to write, but in a flash of genius, he changes some of the characters and turns it into his own, new, original pilot instead? Does the network own that pilot? 
What if an illustrator in charge of developing a mascot for a client turns a rejected design into his own signature character? 
How much of a professor’s writing and research is owned by the university that employs him or her? What if the work is not related to his or her area of study? Is writing done in office hours within the scope of employment?
Because examples like those pose difficulties that have sometimes led to litigation, employers often require these kinds of employees to sign agreements to assign all the rights to the work they create using company time or resources to the company, no matter whether or not they were created in the scope of employment. 
If you plan on hiring a creative professional, getting that professional to sign an assignment agreement may be something to worthwhile to protect your interests. On the other hand, requiring a professional to sign a contract with you which will takes away all of their rights to all of their work—even work they create on their free time—is likely to dissuade the best candidates from working with you. To get the best results, a fair balance must be maintained in what the artist retains and what they give to you. A lawyer can draft an agreement to meet those needs.
Independent contractors
If the person you hired is considered an independent contractor, you do not own the copyright to the work created by the contractors unless the contractor signed an agreement explicitly stating that you own it. 
An independent contractor is like an employee, but the law treats them differently because the employer doesn’t have much control over how an independent contractor renders his or her services. 
For example, imagine you own an office building and you hire a waste management company to take out the building’s trash once a week. That company is an independent contractor. This is because you have no control over when or how they complete the service of taking out your trash. They can complete that task in any manner, and as long as they do it competently, you have to pay them. You also don’t pay employment or benefits for any of the waste management company’s employees. You don’t have the right to hire or fire any specific employees who work for the waste management company. 
The IRS and court cases have created tests to determine whether a worker is an independent contractor or an employee. For the purposes of simplicity though, think about it this way: 
Employees are people who work for you that you can control, pay hourly or by salary, and can hire and fire. Independent contractors are freelancers and other people who provide services for you that you don’t have much control over. 
Ability to exert control is especially crucial in determining whether or not someone is an independent contractor. 
For example, imagine you hire a screenwriter to write a screenplay. You discuss what the screenplay should be about generally, but afterwards, you contribute nothing during the writing process. You set a delivery date for January 1st of the next year. Since the only thing you hired her for was to deliver a final product without supervision, this person would almost certainly be an independent contractor. When that writer delivered the screenplay to you on January 1st, the only thing you would own is the 100 pages of paper that the screenplay was written on. You would not own the rights to create a movie from the screenplay.
On the other hand, imagine you hire that screenwriter, and you want to work very closely with her. You meet with her every few days to discuss the story. You cleared out a room in your home to allow her to meet with you and work there. You regularly give her script notes, and suggest edits to scenes. You tell her that she can only write during the hours of 9–5pm because that’s the only time you can supervise her. This screenwriter would likely be considered your employee. When she delivered the screenplay to you, you would own the full copyright to create a movie out of the screenplay.
As you can see, it’s often unclear where the line could be drawn between employee and independent contractor. This is why it’s standard practice when hiring creative people—no matter if they are employees or independent contractors—to have them sign agreements stating that they will transfer their full copyright in any work they create to the person who is paying them to do the work. 
This agreement is called an Assignment Agreement because the action of giving up a copyright fully to another person is called an “assignment.”
Assignment agreements can’t be made orally. They must be written and signed by the person who is giving up their copyright to have legal effect. 
If you are an employee or employer who is concerned about whether you actually own the copyright to the work that you produce or you’ve paid to have produced, feel free to contact New Media Rights via our contact form to find out whether you qualify for free or reduced fee legal services. We also offer competitive full fee legal services on a selective basis. For more information on the services we provide click here.
Find additional articles by

What's the best way to avoid legal problems for your business or creative work? 

Read our book

Paperback Ebook | Audiobook

Don't Panic is used in undergraduate & graduate classes nationwide to teach business and legal concepts to non-lawyers. Professors & Teachers can request a discounted copy from support @ newmediarights.org