This article explains WMFH Clauses, the pros and cons of including them in contractor agreements, and how to minimize the risk that a contractor will claim the myriad employee benefits that often underlie the desire to hire contractors in the first place.Ownership of the Work of Independent ContractorsIndependent contractors provide an important source of labor for many companies needing specialized, discrete work that is outside the usual scope of their business. Usually, the parties will enter into an independent contractor agreement that governs the relationship, including the ownership of the materials created by the contractor in providing the requested services.Under the United States Copyright Act of 1976, 17 U.S.C. § 101 et seq. (“the Act”), where the agreement is silent as to ownership of such created materials (or no such written agreement exists), ownership will vest in the contractor and not transfer to the employer. 17 U.S.C. § 203.

2017) (Compendium (2017)).[4] 17 U.S.C. § 101 (“A ‘useful article’ is an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information. An article that is normally a part of a useful article is considered a ‘useful article.

Unless a health care facility streams music digitally to the public, it does not need to worry about acquiring a SoundExchange license. 17 U.S.C. § 101. In developing the definition of publicly under the Copyright Act, Congress intended for it to include “semipublic” places, such as clubs, lodges, factories, summer camps, and schools.

to clarify the conditions under which a work containing AI-generated material may be copyrighted.A Three-Part Test for Determining Copyright EligibilityAccording to the US Code, copyright protection is available for “original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device” (17 US Code 102).It is not difficult to see that works created solely by AI could pass the first two requirements outlined above — but not the third.Is it “original”? As determined in Feist Publications Inc. v. Rural Telephone Service Co. Inc., a work is original if it is independently created and possesses a minimal degree of creativity. Anything that possesses some creative spark, no matter how crude, humble, or obvious, could meet the bar for originality. A creative work generated solely by AI could pass this test.Is it “fixed”? According to 17 US Code 101, a work is considered fixed in a tangible medium if it is embodied such that it can be perceived, reproduced, or otherwise communicated for a meaningful duration (i.e., is not transitory). A creative work generated solely by AI could pass this test as well.Is it a “work of authorship”? This is where the complication arises. Under copyright law, authorship is attributed to the creator of the original expression in a work. However, the Trade-Mark Cases determined that copyright only protects “the fruits of intellectual labor” that “are founded in the creative powers of the mind.” As such, a copyright will only be granted if it is determined that a human created the work (Burrow-Giles Lithographic Co. v. Sarony). A creative work generated solely by AI could not pass this test.According to the Copyright Office’s understanding of generative AI models that are currently available, users do not have sufficient creative control over how AI interprets prompts or generates material. When a gene

The Copyright Act of 1976 makes “pictorial, graphic, or sculptural fea­tures” of the “design of a useful article” eligible for copyright protec­tion as artistic works if those features “can be identified separately from, and are capable of existing independently of, the utilitarian as­pects of the article.” 17 U. S. C. §101. The Court in Star Athletica held that a feature incorporated into the design of a useful article is eligi­ble for copyright protection only if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful arti­cle, and (2) would qualify as a protectable pictorial, graphic, or sculp­tural work—either on its own or fixed in some other tangible medium of expression, that is, if it were imagined separately from the useful article into which it is incorporated.

On March 22, 2017, the Supreme Court (in a 6-2 decision) ruled that a stripes and chevron pattern on a cheerleading uniform may be eligible for copyright protection and that the separability test under 17 U.S.C. §101 did not require that the separated design have no functional purpose or that the underlying useful article maintain its full function without the design. Star Athletica, L.L.C. v. Varsity Brands, Inc., No. 15-866 (U.S. Mar. 22, 2017).

To know whether that exception applies, one must know what a work for hire is:A ‘work made for hire’ is(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 as a contribution to a collective work, as 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….[17 USC § 101]“[A] work can only be considered a work for hire if it was created within an author’s scope of employment or if it was a commissioned work created by an independent contractor in one of the nine specifically enumerated categories in the statute.” Aluko, at 121.

Both parties invoke the Court’s 1879 opinion in Baker v. Selden, in which the Court held that copyright in a book of bookkeeping methods including forms did not preclude the defendant’s use of the methods illustrated by the forms. One suspects that the Court’s view of Baker will play a central role in its analysis here.As former United States Register of Copyrights Ralph Oman has explained, Congress considered numerous objections to amending the Copyright Act to cover computer programs yet, a century after Baker, chose to do so anyway. 17 U.S.C. § 101 defines a “‘computer program’ as “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.” This definition brings computer programs within the ambit of “literary works,” defined in Section 101 as “works . . . expressed in words, numbers, or other verbal or numerical symbols or indicia,” and made eligible for protection under section 102(a).

The Court noted that other circuit courts have ruled that an agreement sufficient to establish a work as a “work for hire” must be executed before creation of the work. The Second Circuit, however, has ruled that in some circumstances a series of writings executed after creation of the works at issue can satisfy the writing requirement under 17 USC § 101(2).The Second Circuit cited its precedent Playboy Enterprises, Inc. v. Dumas for the proposition that a writing could be after the fact if the parties had agreed before the creation of the work that it would be a work for made for hire.

1 Even though useful articles are not eligible for copyright protection, decorative and ornamental features of a useful article may be eligible for copyright protection “if, and only to the extent that, such design[s] incorporate[] pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” 17 U.S.C. § 101 (definition of “pictorial, graphic, and sculptural works”) (emphasis added). In short, when a useful article is concerned, the Copyright Act requires an analysis to determine whether its artistic features can be separated from the useful article itself.