Which Contract Do I Need?: Collaboration Agreements vs. Work for Hire Agreements
You just scored your dream gig working with your favorite musician. Congrats! Now you need a contract. There are numerous contracts to choose from, so how do you know which one will best suit your needs? Ensuring you have the right contract is vital to protecting yourself and your music. Two commonly confused contracts are collaboration agreements and work for hire agreements, but Music Law Pro’s team of dedicated experts has got you covered.
Work for Hire Agreements
Generally, a work for hire agreement is used when one party is paid a flat fee upfront to perform services, and the other party owns 100% of the copyright. The agreement itself will memorialize these rights and clarify how the parties are credited in either the composition, the master, or both. A work is considered a “work made for hire” if: (1) the work is created within the scope of employment, or (2) the work isn’t created within the scope of employment, but certain criteria are met.1
If an employee creates a work during the scope of their employment, the employer is generally considered the author and copyright owner of the work.2 This means that the employee who created the work has no ownership interest and may not be entitled to any royalties. For example, if you are an employee songwriter and you write a jingle while working at Music Jingles Inc., then Music Jingles Inc. would own that jingle because you created it as part of your employment. You wouldn’t have an ownership interest or be entitled to any royalty payments unless you and your employer agree otherwise. Now imagine that you are a freelance songwriter hired by Music Jingles Inc. rather than an employee on their payroll. Would Music Jingles Inc. still own your jingle? The answer: It depends. For the purposes of a work for hire agreement, an employer generally refers to someone who has the “right to control the manner and means by which the product is accomplished.”3 Factors used to determine control include the source of the tools used to create the product, the location of the work, whether the hiring party can assign additional work, how much discretion the hiring party has over when the project is due and how long the job may take, employee benefits, the duration of the parties’ relationship, and more.4 So if Music Jingles Inc. controls when the songwriter records the demo, the instrumentation to be used, production, and all of the overall creative decisions, then Music Jingles Inc. would still be the employer, thus owning the copyright. On the other hand, if Music Jingles Inc. simply provides that an upbeat jingle about their product is needed, then Music Jingles Inc. likely wouldn’t be considered an employer and you may have an ownership interest in your work. Keep in mind that whoever hired you might have another clause in the agreement transferring ownership to them, so be wary and always have your contract reviewed by a lawyer before signing.
If the work was not created within the scope of employment, a number of criteria must be met in order for the work to be considered a work made for hire. First, the work must be commissioned.5 This means that the work was created specifically at the request of another person/entity. Second, there must be a written agreement indicating that the work will be considered a work made for hire.6 Third, the work must have been created for a specifically defined type of work, such as an audiovisual work, a collection of individual works, a compilation, a translation of a foreign work, or a supplementary work.7 For example, imagine that you are producing a movie and you hire your favorite composer to create the musical score for the film. You contacted your Music Law Pro lawyer and had a contract drafted that both you and the composer signed agreeing that you would pay the composer $10,000 in exchange for her services. The agreement is a valid work for hire agreement because (1) you as a producer requested commission of the new score, (2) there was a written agreement between you and the composer, and (3) the work was created as part of an audiovisual work (the movie).
In the examples above, the employer/producer owns 100% of the copyright. This means that the employer/producer may collect royalties, license the works, enforce their ownership rights, sue for copyright infringement, and more. Generally, the employee/composer would have no ownership rights and no right to collect royalties from the works unless stated otherwise in the agreement. This is typically a good option for individuals who want to retain 100% control over their music in exchange for paying a fee to collaborators upfront.
Collaboration Agreements
On the other hand, a collaboration agreement is generally used when no money is exchanged upfront.
A collaboration agreement memorializes ownership splits. This can be either splits for the composition, the master, or both. Unlike work for hire agreements where one party owns the work, collaboration agreements generally split ownership, thus entitling each collaborator to royalties. The percentage you share is up to you, but the default is that ownership is split evenly between collaborators.8 For example, imagine you are a singer-songwriter who hired a guitarist to play a riff on your composition. If you didn’t specify ownership or royalty splits and the composition generates $100 in royalties, then the default rule would entitle both you and the guitarist to 50% ownership, and thus to $50 each. However, if you decided that you would have an 85% ownership stake because you did the majority of the work, and that the guitarist would own the remaining 15%, then you would be entitled to $85 and the guitarist would be entitled to $15.
Collaboration agreements also discuss control. You and your collaborators are each earning royalties on the music and sharing ownership, but who is allowed to license the music? Can your collaborator license the composition in a commercial without your permission? Who is collecting and distributing these royalties? These aspects of control are known as administration rights. The collaboration agreement can spell out who has administration rights, what those rights include, how long those rights last, and whether those rights apply to the composition, the master, or both.
Recap: Work for Hire Agreements vs. Collaboration Agreements
Both work for hire agreements and collaboration agreements are used to protect your rights when more than one person contributed to a work. Moreover, either agreement may be used for the composition, the master, or both. The main differences between the two agreements relate to ownership and royalties.
| Work for Hire Agreement | Collaboration Agreement | |
|---|---|---|
| Ownership | One entity usually owns the copyrights in the music 100% | Ownership is usually split between contributors |
| Royalties/Fees | Fee is generally paid upfront with no right to royalties | No money is generally exchanged upfront, and the collaborator is entitled to royalties |
Now that you know which agreement you need, let Music Law Pro draft that work for hire agreement or collaboration agreement for you. Still unsure which agreement you need? No worries! Sign up for Music Law Pro’s general counsel subscription service for unlimited general legal advice and 20% off of our contract drafting services.
By: Alexandra Mayo, Law Clerk
Sources:
17 U.S.C. § 101
17 U.S.C. § 201(b)
Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 751 (1989)
Id at 751-752.
17 U.S.C. §101
Id.
Id.
See 1 Nimmer on Copyright § 6.08[A] (2020)
DISCLAIMER: In addition to the disclaimer, for clarity: This information is for informational purposes only and should not be taken as legal advice for any individual case or situation; and please do not consider this information to be a substitute for obtaining legal advice from a qualified attorney licensed in the jurisdiction(s) relevant to your matter.