WFH vs Exclusive in perpetuity

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  • #24671 Reply
    Musicmatters
    Participant

    Greetings folks,

    I am wondering about the practical differences between signing a work for hire (WFH) versus an exclusive in perpetuity agreement. I would love to hear your thoughts. Thanks,

    MM

    #24672 Reply
    MichaelL
    Participant

    I am wondering about the practical differences between signing a work for hire (WFH) versus an exclusive in perpetuity agreement.

    1. Generally, under “Work for Hire” (WFH) agreement you get paid a fee upfront, in addition to your writer’s royalties. WFH agreements are exclusive and in perpetuity because you usually assign the copyright to the company that hired you.

    2. An “exclusive in perpetuity agreement” for which you are not paid upfront basically amounts to you granting a perpetual “exclusive license” to whomever. While you have not transferred the copyright, you may as well have because you’ve given up the right to reproduce and sell the work in question.

    Note: The transfer of copyright under a WFH agreement MUST be put in writing. Without a written transfer, no WFH agreement exists and the copyright does not transfer, even if you were paid for the music. You have merely granted the other party a perpetual non-exclusive license.

    The case law is pretty clear on what constitutes work for hire. In addition to being paid a fee, other factors including where the work was performed, who owned the equipment used to produce the work, whether or not taxes withheld, etc., figure into the determination of WFH status.

    Cheers,
    Michael

    #24673 Reply
    Musicmatters
    Participant

    Thanks @MichaelL. I was hoping you would chime in. So this is what i gather, practically, they are the same as in both cases you have lost control of your music, forever. However, for a WFH, you have a good case for asking for money up front but does not mean you will get it and this explains why many WFH agreements have a trivial amount written down.

    Is there an advantage for the library in the WFH, it may have to come up with upfront money ? Should composers encourage or discourage this practice which seems to be gaining ? I have found that many exclusive libraries are now using WFH agreements

    #24675 Reply
    MichaelL
    Participant

    @Musicmatters, one advantage libraries gain by offering money upfront is that it attracts better composers.

    Also under a WFH agreement, your music/copyright becomes an asset of the company, which can be sold.

    WFH had been the traditional practice of libraries for decades. The difference now, due to the proliferation of composers, is that upfront money is disappearing.

    As long as the number of composers continues to escalate these conditions will exist.

    #30241 Reply
    Abby north
    Guest

    There is no termination right with wfh. For exclusive, there is a United States termination right.

    #30242 Reply
    Michael Nickolas
    Participant

    There is no termination right with wfh. For exclusive, there is a United States termination right.

    Terminate an agreement you agreed was in perpetuity?

    #30245 Reply
    MichaelL
    Participant

    There is no termination right with wfh. For exclusive, there is a United States termination right.

    I’m curious as well. Contracts are governed by state law and, as such, Contract Termination at will may vary from state to state.

    #30246 Reply
    Advice
    Guest

    2. An “exclusive in perpetuity agreement” for which you are not paid upfront basically amounts to you granting a perpetual “exclusive license” to whomever. While you have not transferred the copyright, you may as well have because you’ve given up the right to reproduce and sell the work in question.

    Some exclusive music library contracts DO involve assignment of copyright.

    #30248 Reply
    MichaelL
    Participant

    Some exclusive music library contracts DO involve assignment of copyright.

    Ah, the fuzzy area surrounding the term “exclusive.” Prior to the advent of the new models, “exclusive” and “work for hire” were synonymous.

    Yes, I’m aware of at least one such non WFH library that requires copyright transfer after they’ve placed your music.

    #30377 Reply
    Abby North
    Guest

    In the United States, there is a statutory right of termination of a transfer, but this does not apply to works for hire.

    Lisa Alter is one of the experts in terminations in the US, and her section 203 and section 304 articles are below.

    Here’s more on sections 203 and 304

    https://www.copyright.gov/docs/203.html

    https://www.law.cornell.edu/uscode/text/17/304

    In a nutshell, the US allows for a termination of the grant, either two copyright terms (56 years) or 35 years from the data of the grant. The differences are based on when the original grant was made and whether section 203 or 304 applies.

    Outside of the US, the British Reversionary Territories (BRTs) allow for terminations 25 years after the death of the author.

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