You may be wondering who owns the copyright of original works of authorship when they are developed during the scope of employment. The key issue in a circumstance such as this is whether the work was done as an independent contractor or as a work made for hire. Recently, this issue is being addressed more often due to the rising number of independent developers in the video game industry.

As mentioned in a previous Revision Legal article, The Ins and Outs of Copyright Law, “A copyright exists for works that are ‘original works of authorship fixed in any tangible medium of expression . . . from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.’” 17 U.S.C. §102 (a).

Works Made for Hire

Section 101 of the Copyright Act defines a “work made for hire” in two parts:

(a) a work prepared by an employee within the scope of his or her employment; or

(b) 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. 17 U.S.C. § 101.

“If a work is made for hire, the employer or other person for whom the work was prepared is the author and should be named as the author on the application for copyright registration unless the parties involved signed a written agreement stating otherwise.” See Copyright Circular 09.

Who is an Independent Contractor?

According to the Legal Dictionary, an independent contractor is “a person who contracts to do work for another person according to his or her own processes and methods. The contractor is not subject to another’s control except for what is specified in a mutually binding agreement for a specific job.” Moreover, under the general common law of agency, an independent contractor is someone who is not an employee.

According to the U.S. Copyright Office, “A work created by an independent contractor can be a work made for hire only if (a) it falls within one of the nine categories of works listed in part 2 above and (b) there is a written agreement between parties specifying that the work is a work made for hire.” Therefore, if a copyrighted work is made under an independent contractor relationship and does not meet the requirements listed above, the contractor retains the copyright.

Works Made for Hire in the Video Game Industry: A Deeper Analysis

The video game industry’s increasing reliance on independent contractors and gig-economy developers has made works-made-for-hire analysis one of the most practically significant copyright questions for studios, publishers, and individual creators. Getting the analysis wrong can have devastating consequences: a studio that fails to secure copyright ownership of code, art, music, or narrative content it thought it owned may find itself unable to ship, update, or license its own product.

The Employee vs. Independent Contractor Distinction

For works created by employees within the scope of their employment, work-for-hire status is automatic—no written agreement is required. The employer owns the copyright from the moment of creation. But determining who is an “employee” for copyright purposes requires analysis under the multi-factor test established in Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989).

The Reid factors include:

• The hiring party’s right to control the manner and means of production;
• The skill required;
• Whether the hiring party supplies the instrumentalities and tools;
• The location of the work;
• The duration of the relationship;
• Whether the hiring party has the right to assign additional projects;
• The extent of the hired party’s discretion over when and how long to work;
• The method of payment;
• The hired party’s role in hiring and paying assistants;
• Whether the work is part of the regular business of the hiring party;
• Whether the hiring party is in business; and
• The provision of employee benefits and tax treatment of the hired party.

No single factor is determinative, and courts weigh all factors together. A developer who works remotely, uses their own equipment, sets their own hours, and is paid per-project is likely an independent contractor even if they work exclusively for one studio over an extended period.

The Nine-Category Limitation for Independent Contractor Work

For works created by genuine independent contractors, work-for-hire status is only available if the work falls within one of nine specific statutory categories and there is a written agreement. The most relevant categories for the video game industry are:

• Contribution to a collective work: Levels, characters, and other discrete units of a game may qualify as contributions to a collective work if the game can be characterized as a compilation of independently separable contributions.
• Part of a motion picture or other audiovisual work: Video games are classified as audiovisual works under 17 U.S.C. §101. Art assets, cutscene animations, and similar content created for a game may qualify under this category, but courts have not uniformly agreed on which game development contributions fall within it.
• Compilation: Game databases, level maps, and certain types of game content organized from pre-existing materials may qualify as compilations.

Software code is notably absent from the nine categories. A software developer contracted to write game engine code cannot have that work designated as work-for-hire under the commissioned-work provision. The studio’s only options are to hire the developer as an employee, or to obtain a copyright assignment in addition to (or instead of) the work-for-hire agreement.

Copyright Assignment as an Alternative

When work-for-hire status is unavailable—either because the contractor is genuinely independent or because the work type is outside the nine categories—a copyright assignment is the appropriate tool. Under 17 U.S.C. §204, an assignment of copyright must be in writing and signed by the copyright owner (the contractor). An oral agreement to assign copyright is unenforceable.

A copyright assignment should be included in every contractor agreement, drafted broadly to cover all copyright-protected elements of the work, all derivative works, and all rights under 17 U.S.C. §106. The agreement should also include a “work for hire” clause as an alternative (“to the extent this work qualifies as a work made for hire, it shall be treated as such; to the extent it does not, the contractor hereby assigns all copyright to [Studio]”). This belt-and-suspenders drafting ensures the studio owns the copyright under either legal theory.

Termination Rights: The Long-Term Risk in Work-for-Hire and Assignment Agreements

The Copyright Act contains a provision that many studios overlook: the termination right under 17 U.S.C. §203. An author (or their heirs) can terminate a copyright grant made on or after January 1, 1978, during a five-year window beginning 35 years after the grant was made. This right cannot be waived in the original agreement. Work-for-hire status, if genuine, avoids this risk because the employer—not the individual creator—is treated as the author. But a copyright assignment is subject to termination.

As the first generation of digital games approaches the 35-year threshold, game studios and publishers are beginning to receive termination notices from developers who contributed to early titles. Studios should audit their back catalogs to identify assignment agreements that may be subject to termination and consult legal counsel on available strategies.

Best Practices for Video Game Studios

• Use written agreements for every contractor. An oral work-for-hire arrangement for a commissioned work is a legal nullity. Every contractor engagement must be documented in a signed written agreement before work begins.
• Include both work-for-hire and assignment clauses. Cover both theories in every agreement to ensure ownership regardless of whether work-for-hire status is available.
• Classify workers correctly. Misclassifying an employee as an independent contractor creates tax, labor, and copyright problems simultaneously. Studios should conduct a full Reid factor analysis for anyone in a gray area.
• Register copyrights promptly. Timely registration preserves the right to seek statutory damages and attorney’s fees in infringement actions, which is particularly important for protecting game code and assets from copying.

If you have questions about copyright ownership, work-for-hire agreements, or copyright issues in game development, contact Revision Legal’s copyright attorneys at 855-473-8474.