Basic understanding of the US copyright concept “work made for hire“ and warning of legal risks around “work made for hire“ clause transplanted into labor contract or commission agreement by Vietnamese companies

Email: vinh@bross.vn

“Work made for hire“ means the copyright does not belong to the author

Copyright is basically understood as the exclusive right to make copies and control original works such as written work, newspaper, film, architecture, software, fine arts, etc., that are protected by copyright law for a limited period (usually 50 years after the author's death). The C symbol in the circle ©, which often appears in publications, is a public warning sign about copyrighted works. However, the law does not require that a © symbol be present on the work to be entitled to copyright protection.

The Cornell Law School defines that copyright is the exclusive legal right to reproduce, publish, sell, or distribute the matter and form of something[1] while the Harvard University assumes that copyright is the lawful right of an author, artist, composer or other creator to control the use of his or her work by others[2].

Often, only the author or those who are licensees from the original author are legally entitled to claim the copyright. However, there is an exception to this rule being "work made for hire", whereby in case of a "made for hire" work then only employer (an individual or organization) shall be deemed as author even though the creation of that work was made by the employee. "Work made for hire", also known as “work for hire” or “WFH”, is derived from the US Supreme Court ruling of 1989 in the Community for Creative Non-Violence v. Case. Reid[3]

By Section 101 of the United States Copyright Act of 1976 (title 17 of the U.S. Code), work made for hire is defined as two parts:

1. a work prepared by an employee within the scope of his or her employment or
2. a work specially ordered or commissioned for use:

1. as a contribution to a collective work,
2. as a part of a motion picture or other audiovisual work,
3. as a translation,
4. as a supplementary work,
5. as a compilation,
6. as an instructional text,
7. as a test,
8. as answer material for a test, or
9. 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.

Legal consequence of "work made for hire"

In a nutshell, more simply understanding under the US copyright law, if you are hired by an individual or organization under a labor contract, every intellectual creation you created within the scope of your employment, namely writing articles, music, video, phonorecord, painting, software, or other intellectual creations, would be automatically owned by your employer not yours even though only you created them.

Or if we assume that US copyright law is applicable for an arguably heard copyright dispute in Vietnam between the author Le Linh - who merely holds moral rights to the best-selling comic series Than Dong Dat Viet[4] sued the copyright owner as Phan Thi Company - the copyright holder that owns all economic rights then all of the moral rights and economic rights bestowed on the artist Le Linh would have been exhausted, in other words he had no standing to initiate lawsuit against Phan Thi Company because those rights were automatically transferred to Phan Thi Company with assumption, of course, that the two parties had no other agreement in contrary 

Where you entered into a contract to commission an artwork or commission agreement with an independent contractor having a provision stating that the output resulted from the contract is a "work made for hired” then intellectual creations come out, for example, the Vietnamese translation of Harry Potter book, the movie Gone with the Wind (adapted from the classic novel Gone with the Wind), the play script of the performing art titled Thua Ay Xu Doai (Thủa Ấy Xứ Đoài) later renamed as Ngay Xua (Once upon a time)[5], would have been owned by the commissioning party but not by the commissioned party, and more particularly the commissioning party (the investor) would have had both of all moral rights and economic rights[6].

Warning around the “work made for hire“ clause transplanted into labor contract or commission agreement by Vietnamese companies

Although “work made for hire” is a legal concept of the United States, it may be applied to cross-border transactions involved in copyright and related rights wherein at least contracting party is a Vietnamese company or individual. Therefore, we would emphasize most two important messages:

1. No legal concept "work made for hire" under the law of Vietnam. The so-called "work made for hire" in the form of an organization or individual entering into a contract with an author to create an artistic work, or "work made for hire" in the form of an organization or individual assigning the task to the author who is hired by that individual or organizations, is not "work made for hire" in the sense of Section 101 of the US Copyright Act of 1976 because the moral rights (except for rights to publish or allow others to publish) are neither alienable nor transferrable as well as author of the work cannot be an organization or corporation under the copyright legislation of Vietnam.

2. For Vietnamese individuals and companies those who transplanted the "work made for hire" term with reference to Section 101 of the US Copyright Act of 1976 and had their agreement signed by their employees or independent contractors, be prepared to welcome possible legal disputes that may suddenly happen or to face numerous claims for moral rights infringement in accordance with Article 19 of Vietnam Intellectual Property Law.

Bross & Partners has intensive knowledge and experience in assisting clients in defending against allegations of copyright infringement, related rights including a recent pending lawsuit where the client was claimed a record damage amount of USD 1.5 million. Should you have specific needs, please contact: vinh@bross.vn; cellphone 84-903 287 057, 84-4-3555 3466; Wechat: wxid_56evtn82p2vf22; Skype: vinh.bross. 

Bross & Partners, a renowned and qualified Patent, Design, Trademark and Copyright agent of Vietnam, constantly ranked and recommended by the Managing Intellectual Property (MIP), World Trademark Review (WTR), Legal 500 Asia Pacific, AsiaLaw Profiles, Asia IP and Asian Legal Business, is providing clients all over the world with the reliable, affordable contentious and non-contentious IP services including enforcement, anti-counterfeiting,  litigation regarding trademark, trade name, industrial design, patent, copyright and domain name.