Copyright for the Freelance Artist Pt. 2: Employment Agreements

In 2015, Lee Morin became a featured blogger for The Needy Animator. Here is part 2 in 4 installments concerning copyright law basics for freelance artists.

Copyright for the Freelance Artist Pt 2, by Lee Morin, Esq.

CONTRACT BASICS for the Freelance Artist

THE IMPORTANCE OF EMPLOYMENT AGREEMENTS: The Case of Jack Kirby and Marvel Comics

Whether you transfer ownership of or merely grant permission to use the exclusive rights to your work depends on the contract agreements in place.  Heated debates have arisen where it concerns agreements between freelance artists and publishers that allowed publishers to exploit characters in the comic book industry.

Motion picture adaptations of literary superheroes are an example of derivative works, which provide the film industry with some of the highest earning films of late, grossing more than 15 billion dollars for Marvel, now Disney, since 2000[1].  Because copyright law provides that freelancers can terminate transfers of ownership in the exclusive rights to their work[2], heirs of freelance artist Jack Kirby sued Marvel to reclaim rights to characters Fantastic Four, Hulk, Iron Man, Silver Surfer, Spider Man, Thor, and X-Men[3].

Marvel argued that Kirby produced work as made for hire not subject to termination; thus, Marvel was author and owner; neither Kirby nor his heirs had any claim.  The heirs insisted that Kirby had not irrevocably transferred his rights to Marvel, rather that the transfer was subject to termination after 56 years[4]. After petitioning the Supreme Court for certiorari, parties settled their dispute on confidential terms[5].  Whether freelance artists may terminate transfers of ownership in their works created or published prior to 1978 remains to be seen.  Still, this is a lesson that illustrates the importance of the contract agreement.

THE 3 BASIC CONTRACT AGREEMENTS

When considering which contract agreement is best for you, keep in mind there are three main agreements, which freelancers can use to collaborate.

WORK MADE FOR HIRE

We have already mentioned works made for hire, which the copyright law defines as either a work prepared by an employee within the scope of his or her employment, or, “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 […][6].”  If the latter, then the parties must sign an agreement attesting to such terms.  In a work made for hire, the employer or party commissioning the work is author and owner; thus, the freelancer does not have any rights to or in the work whatsoever.

ASSIGNMENT AGREEMENT

In the middle of the spectrum is the assignment agreement, which is a temporary transfer of ownership in the copyright of a work.  In an assignment, the freelancer retains authorship and is named as author of the work in its copyright registration; however, the entity to whom the copyright is assigned, whether a publishing company or individual, is owner of all exclusive rights granted in copyright to the work, and known as the claimant.

LICENSE AGREEMENT 

At the opposite end of the spectrum is a license agreement, in which the copyright holder grants an individual or publishing company certain or all exclusive rights to a work under certain conditions, specifying duration and the geographic territories, for fees.  In a license, the freelancer is the owner and the author of record in the copyright registration.  While the copyright code provides for termination of an assignment, termination in a license agreement is controlled by terms, to which parties agree, including payment, deliverables, or quality of product. 

WHICH CONTRACT AGREEMENT IS THE BEST FIT FOR YOU? 

One of the most frequently asked questions I encounter from freelance artists is which agreement is appropriate for their situation.  Many are recent graduates, just beginning their careers. They may have limited resources and market reach, which means they are more likely to benefit from agreeing to a work made for hire or assigning the rights in their work to an established publisher.  Whether you agree to an assignment, which provides for termination[7], or a work made for hire, which does not, ultimately depends on your bargaining power as an artist, which is generally low at the start of any career.

Once your work and reputation have had time to mature, then you may exercise more bargaining power and control over your work.  If you are fortunate enough to have a viable outlet in which to market your work, then you may attract the attention of others wishing to collaborate with you to bring your work into new artistic mediums.  In that case, a license may be your best option because you intend to retain certain rights to your work while exploiting others that can bring your work to new audiences.

An example of this scenario is your retaining print publishing rights while licensing the right to adapt your story, setting, characters, or artwork for film. Last year, I wrote a blog about how freelance artists can market their work to game developers, which you can read here.

In any of the above scenarios, I strongly suggest you hire an agent, who specializes in the industry, or an attorney, who specializes in intellectual property law and transactions, to best represent your interests. An agent may have the relationships that an attorney does not.  On the other hand, an attorney can help you learn how to read and negotiate a contract, which you eventually must be able to do yourself.  An attorney can also draft and provide customized licensing agreements, which can creatively parse your exclusive rights and serve as an instrument by which you make a lot of money.

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Our next blog will discuss copyright infringement, what it is, how to avoid it, and what happens if you sell or display fan art, cosplay, or perform anime music videos at a convention.  We will also address fansubs and selling fan art or cosplay via online vendors like Etsy and Ebay.

DISCLAIMER: THE INFORMATION CONTAINED IN THIS BLOG IS FOR INFORMATION PURPOSES ONLY AND IS NOT TO LEGAL ADVICE.

References
1http://en.wikipedia.org/wiki/List_of_films_based_on_Marvel_Comics#Box_office
217 U.S.C. § 203, § 304
3Marvel Worldwide, Inc. v. Kirby, 756 F. Supp. 2d 461 (S.D. N.Y. 2010).
417 U.S.C. § 304(c)(3)
5Kirby v. Marvel Characters, Inc., 135 S. Ct. 42 (2014).
617 U.S.C. § 101
717 U.S.C. § 203(a)(3)
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