A software company is acquired. In diligence, the buyer asks for the assignment from the freelance designer who created the logo, the icon set, and the entire visual identity in 2019. Nobody can find one. The invoice says "logo design, $6,000, paid in full." There is no contract.

The designer owns the copyright in the company's visual identity. Not a license. The copyright. The company has, at most, an implied nonexclusive license to use what it paid for, which is worth something but is not what the buyer is purchasing, cannot be enforced against copyists, and cannot be transferred without the designer's consent.

The fix costs one paragraph and one signature, and it has to happen before the money changes hands, because afterward the designer has excellent leverage and knows it.

That is the subject of this article: who owns a copyright, how ownership moves, and the one statutory power that lets an author take it back decades later no matter what the paperwork says.

The short answer

  • Copyright vests initially in the author. 17 U.S.C. § 201(a). For most works the author is the human who created it.
  • The exception is work made for hire, § 201(b), where the employer or commissioning party "is considered the author." Two routes, discussed below, and the second is far narrower than people assume.
  • Joint authors co-own the whole work as tenants in common: each may license non-exclusively without the other's permission, subject to a duty to account for profits.
  • A transfer of copyright ownership is invalid unless in a signed writing. § 204(a). Nonexclusive licenses are the exception and may be oral or implied.
  • Recordation with the Copyright Office is not required but confers priority against later conflicting transfers and constructive notice. § 205.
  • Termination under §§ 203 and 304(c) lets authors and statutory heirs recapture grants after set periods. It cannot be waived, and any agreement "to the contrary" is void.

Part I: Who owns it at the moment of creation

The default: the author

Copyright "vests initially in the author or authors of the work." § 201(a). Protection attaches automatically upon fixation in a tangible medium, § 102(a), with no registration, notice, or filing required. See Copyright Overview.

The consequence that surprises non-lawyers: paying for a work does not buy the copyright. A commissioned photograph, a logo, a website, a piece of music, a report, and a line of code all belong to the person who made them unless one of two things happened: the work qualifies as a work made for hire, or there is a signed written assignment.

Work made for hire, route one: employees

Section 101 defines a work made for hire first as "a work prepared by an employee within the scope of his or her employment."

Two questions, and both are contested more often than clients expect.

Is the person an employee? Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989), rejected the argument that "employee" means anyone whose work the hiring party supervises, and adopted the common law of agency. The factors the Court listed are the ones courts still apply: the hiring party's right to control the manner and means of creation, the skill required, the source of the instrumentalities and tools, the location of the work, the duration of the relationship, whether the hiring party can assign additional projects, the hired party's discretion over when and how long to work, the method of payment, the hired party's role in hiring assistants, whether the work is part of the hiring party's regular business, whether the hiring party is in business, the provision of employee benefits, and the tax treatment.

James Earl Reid sculpted a nativity-scene sculpture for a homeless-advocacy organization. He was a sculptor working in his own studio, paid a lump sum, given no benefits, and free to work as he chose. Not an employee. He owned the copyright.

Was it within the scope of employment? Courts borrow the Restatement (Second) of Agency § 228: the conduct is of the kind the employee is employed to perform, occurs substantially within authorized time and space limits, and is actuated at least in part by a purpose to serve the employer. An engineer who writes an unrelated novel on weekends owns the novel. An engineer who writes internal tooling at home on Sunday probably does not own the tooling.

For the classification analysis in full, see Independent Contractor or Employee?.

Work made for hire, route two: the nine categories

The second branch of § 101 is the one that traps businesses. A commissioned work is a work made for hire only if it is:

  1. a contribution to a collective work;
  2. a part of a motion picture or other audiovisual work;
  3. a translation;
  4. a supplementary work (a foreword, illustration, index, chart, and similar adjuncts to another author's work);
  5. a compilation;
  6. an instructional text;
  7. a test;
  8. answer material for a test; or
  9. an atlas;

and the parties "expressly agree in a written instrument signed by them that the work shall be considered a work made for hire."

Both conditions are required. Read the list again and note what is missing:

  • Software is not on the list.
  • Logos and brand identities are not on the list.
  • Photographs are not on the list (a single commissioned photograph is not, though a photograph contributed to a collective work may be).
  • Architectural works, sound recordings, and most designs are not on the list.

A contract that says "all work product shall be a work made for hire" and stops there, for a commissioned software project, does nothing. The clause fails because the subject matter is outside the nine categories, and the contractor keeps the copyright.

The fix is a fallback assignment, and every competent contractor agreement contains one:

To the extent any Deliverable does not qualify as a work made for hire, Contractor hereby irrevocably assigns to Company all right, title, and interest in and to the Deliverable, including all copyrights and all renewals and extensions.

Note "hereby assigns," present tense. That distinction matters enormously in patent law and is good practice here too. See Employee Invention Assignment Agreements and Work Made for Hire Determination Checklist.

A California wrinkle worth knowing. California Labor Code § 3351.5(c) and Unemployment Insurance Code §§ 686 and 621(d) treat a person who creates a work made for hire under a written agreement as an employee for workers' compensation and unemployment insurance purposes. A California business that labels a contractor's output a work made for hire may be creating an employment relationship for state purposes. Use the assignment, not the label.

Part II: Joint authorship

Section 101 defines a joint work as "a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole."

What co-ownership means

Joint authors are tenants in common in the copyright. Each owns an undivided interest in the whole, which means each:

  • may use the work and grant nonexclusive licenses without the other's consent;
  • must account to the co-owners for their proportionate share of profits;
  • may not grant an exclusive license or assign the entire copyright without the others' consent;
  • may not sue the others for infringement (a co-owner cannot infringe a copyright they own); and
  • must join or be joined in enforcement actions in most circumstances.

The practical implication is severe: a single joint author can license the work to your competitor, and your remedy is an accounting for half the money, not an injunction.

The tests, and the split

Courts agree that a joint work requires (1) copyrightable contributions from each author and (2) an intent that the contributions merge. They disagree about how much more is required.

The Second Circuit's approach. Childress v. Taylor, 945 F.2d 500 (2d Cir. 1991), held that each putative author must have contributed independently copyrightable material and that both parties must have intended to be joint authors, not merely intended that contributions merge. An actress who supplied research, ideas, and suggestions for a play about Jackie "Moms" Mabley was not a joint author, because the playwright never regarded her as a co-author.

The Ninth Circuit's approach. Aalmuhammed v. Lee, 202 F.3d 1227 (9th Cir. 2000), added a control inquiry. A consultant on the film Malcolm X who reviewed the script, suggested revisions, directed actors in Arabic prayer scenes, and made substantial contributions was not a joint author. The court asked who "superintends the work by exercising control," whether the parties made objective manifestations of shared intent, and whether the audience appeal of the work turns on both contributions.

A minority view holds that a contribution need not be independently copyrightable so long as the collaboration produces a unitary whole, but that view has not prevailed in the leading circuits.

The practical guidance

For creators collaborating: put it in writing before you start. A one-page collaboration agreement specifying ownership percentages, decision rights (unanimous consent for exclusive licenses and assignments), accounting obligations, credit, and what happens if someone leaves is worth more than any doctrine.

For businesses commissioning work: do not rely on joint authorship as a strategy. It gives you no control over the other owner and no ability to stop them. Take an assignment.

For litigators: the joint authorship defense is a favorite of accused infringers, because if the defendant is a co-owner there is no infringement at all. Test it early against Childress and Aalmuhammed, and look for the objective manifestations: how the parties described themselves, how credit was given, who controlled, and what the registration says.

Compare the different rules for collective works, where the author of a contribution retains copyright in that contribution and the collective work owner acquires only the privilege of reproducing it as part of that collective work and revisions of it, § 201(c). See Contributions to a Collective Work.

Part III: Transfers

The writing requirement

A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent.

§ 204(a).

"Transfer of copyright ownership" is defined in § 101 to include an assignment, mortgage, exclusive license, or any other conveyance of a copyright or of any of the exclusive rights, whether or not limited in time or place, but excluding a nonexclusive license.

So:

  • Assignment: writing required.
  • Exclusive license: writing required. This surprises people; an exclusive license is a transfer of ownership of that right.
  • Nonexclusive license: no writing required. May be oral or implied from conduct.

The writing need not be elaborate. Courts have enforced a one-line memorandum and even a check endorsement in appropriate circumstances, and the writing may be executed after the fact to memorialize an earlier oral agreement, at least between the parties. But the requirement is real and it defeats claims regularly.

The implied nonexclusive license

When there is no writing, the doctrine that usually saves the paying party is the implied nonexclusive license.

Effects Associates, Inc. v. Cohen, 908 F.2d 555 (9th Cir. 1990), is the canonical case, and Judge Kozinski's framing is memorable. A special-effects house created footage for a low-budget horror film, was paid less than the agreed price, and sued when the footage appeared in the film. The court held that no copyright was transferred (no writing), but that Effects had granted an implied nonexclusive license by creating the work at Cohen's request and delivering it with the intent that he copy and distribute it. The footnote everyone quotes: "Moviemakers do lunch, not contracts."

The three-part test most courts apply: the licensee requested the work, the licensor created and delivered it, and the licensor intended the licensee to copy and distribute it.

What an implied license gets you, and what it does not. It is a defense to infringement for the intended use. It is nonexclusive, so the creator may license the same work to anyone else, including your competitor. It is generally not transferable without consent, which is why acquisitions surface the problem. And its scope is limited to what the parties intended, which is a fact question you will litigate.

Recordation and priority

Recordation with the Copyright Office is voluntary but valuable, § 205:

  • A recorded document gives constructive notice of its contents if the work is registered and the document identifies the work so that it can be found.
  • As between two conflicting transfers, the first executed prevails if recorded within one month of execution in the United States (two months if executed abroad), or at any time before recordation of the later transfer. Otherwise the later transfer prevails if taken in good faith, for valuable consideration, without notice, and recorded first. § 205(d).
  • A nonexclusive license prevails over a conflicting transfer if evidenced by a signed writing and taken before the transfer or after it without notice. § 205(e). That protects licensees who never record.

Practical advice: record assignments in significant transactions, and search recorded documents in diligence. Most parties do neither, which is exactly why the priority rules occasionally decide a case.

Chain of title in diligence

The questions that actually surface problems:

  • Who created each material work, and were they an employee or a contractor?
  • For each contractor, is there a signed agreement with a present assignment, not just a work-made-for-hire recital?
  • Do the agreements predate or postdate the work? A post-hoc assignment is fine between the parties but complicates priority.
  • Were any works created before the company existed, by founders acting individually? Founder-created code and content is the single most common gap.
  • Are there open source components, and what do their licenses require? See Open Source Software: Licenses, Compliance, and Risk.
  • Are there joint authorship risks from collaborations, agencies, or university relationships?
  • Is anything subject to a termination right (below)?
  • Are registrations accurate as to authorship and ownership? An inaccurate registration can be attacked under § 411(b). See Copyright Damages and Remedies.

See IP Due Diligence Checklist for Mergers and Acquisitions.

Part IV: Termination of transfers

This is the part of copyright law most often missed, and it is not optional.

Why it exists

Congress has twice concluded that authors, who typically have the least bargaining power at the moment they sell, should get a second chance at the value of their work. The 1909 Act did this through a renewal term. The 1976 Act replaced renewal with a statutory termination right that authors and their heirs may exercise regardless of what they signed.

The key sentence appears in both provisions: termination may be effected "notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant."

That means the right cannot be waived, sold, or contracted away. A grant reciting that the author waives termination is void as to that recital.

Section 203: grants made on or after 1 January 1978

Who may terminate. The author, or if the author is dead, the statutory successors: the surviving spouse (or spouse and children/grandchildren by the statutory shares), or, absent those, the author's executor, administrator, personal representative, or trustee. § 203(a)(2). Where a work had multiple authors, termination requires a majority of the authors who executed the grant.

What can be terminated. Any exclusive or nonexclusive grant of a transfer or license executed by the author on or after 1 January 1978, other than by will.

What cannot. Works made for hire. This is the single most important limitation, and it is why the work-for-hire question is litigated so fiercely in the music and publishing industries: a work made for hire has no termination right at all.

When. The five-year window opens at the end of thirty-five years from execution of the grant. If the grant covers the right of publication, the window opens at the earlier of thirty-five years from publication or forty years from execution. § 203(a)(3).

Notice. Written notice must be served on the grantee not less than two and not more than ten years before the effective date, and a copy must be recorded in the Copyright Office before the effective date. § 203(a)(4). Form and content are prescribed by regulation, 37 C.F.R. § 201.10, and errors are a common reason terminations fail.

Section 304(c) and 304(d): pre-1978 grants

For grants executed before 1 January 1978 covering the renewal term of a work still under copyright, § 304(c) permits termination during a five-year window beginning at the end of fifty-six years from the date copyright was originally secured, or 1 January 1978, whichever is later.

Section 304(d) adds a second bite for grants where the § 304(c) window expired without being exercised, opening a five-year window at the end of seventy-five years from the date copyright was originally secured.

These provisions matter enormously for catalogs from the 1960s and 1970s, and they are the source of much of the litigation over classic sound recordings and comic book characters.

The derivative works exception

The most litigated feature of termination. Section 203(b)(1) provides:

A derivative work prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination, but this privilege does not extend to the preparation after the termination of other derivative works based upon the copyrighted work covered by the terminated grant.

So a film made under a terminated grant may keep being exploited. A sequel may not be made.

Mills Music, Inc. v. Snyder, 469 U.S. 153 (1985), addressed who gets the money from derivative works after termination. The song "Who's Sorry Now" had been licensed by a publisher to hundreds of record companies. After the heirs terminated, the Court held 5-4 that the publisher remained entitled to its share of royalties from the pre-termination derivative works (the recordings), because those were "prepared under authority of the grant" and the terms of the grant continued to govern. The dissent argued the exception should protect only the derivative work's own author. Mills Music remains controversial and is limited to its facts by many commentators, but it is the law.

Compare Stewart v. Abend, 495 U.S. 207 (1990), which arose under the old renewal regime and held that when an author died before the renewal term vested, the assignee of the renewal expectancy could not continue to exploit a derivative work (the film Rear Window) without the successor's consent. The two cases are reconciled by their different statutory frameworks, and together they explain why film and music companies pay close attention to termination calendars.

Practical implications

For authors and heirs:

  • Calendar the window. It is narrow, and the notice must be served two to ten years before the effective date. Missing it forfeits the right entirely under § 203.
  • Get the notice right. Regulatory formalities are strictly applied.
  • Understand that terminating recaptures the United States rights only. Foreign grants are unaffected.
  • Terminating does not automatically make the work more valuable; it makes you the seller again.

For grantees and acquirers:

  • Build a termination calendar for every acquired catalog, keyed to grant execution dates.
  • Diligence the work-for-hire status of every significant work, because that determines whether a termination right exists at all.
  • Model the derivative works exception: what can you keep exploiting, and what can you no longer create?
  • Negotiate for re-grants. A post-termination author may be willing to re-license, and the negotiation is far easier before the notice is served than after.
  • Do not rely on a contractual waiver. It is void.

Part V: Special ownership situations

United States Government works are not subject to copyright protection, § 105, though the Government may hold copyrights transferred to it. Works by government contractors are not covered by the bar, so a contractor-created report is protectable unless the contract says otherwise. State and local government works are protectable, subject to the government edicts doctrine, which places statutes, regulations, and judicial opinions in the public domain, and which the Supreme Court extended to annotations produced by a legislature's agent in Georgia v. Public.Resource.Org, Inc., 590 U.S. 255 (2020).

Sound recordings have two layers: the musical composition and the recording of a performance. They are separately owned and separately licensed, which is why clearing a song requires two clearances. Pre-1972 recordings were governed by state law until the Music Modernization Act brought them into a federal scheme with defined terms. See Understanding Copyright Registration for a Song and Music Licensing in the Streaming Era.

Architectural works created on or after 1 December 1990 are protected as their own subject matter, and § 120 permits photographing a building visible from a public place and permits the owner to alter or destroy it without the architect's consent.

Academic works raise the "teacher exception" question. Universities' policies commonly disclaim ownership of scholarly articles while claiming ownership of software, courseware, and sponsored-research output. Whether the exception survived the 1976 Act is unsettled; the operative document is the institution's IP policy, which is usually incorporated into the employment relationship.

AI-generated material cannot be authored by a machine. The Copyright Office requires applicants to disclaim material generated by artificial intelligence and to describe the human contribution, and it has registered works containing AI-generated elements only where a human contributed protectable expression through selection, arrangement, or modification. The human authorship requirement has been upheld on judicial review. Practically, a work produced substantially by prompting is at risk of having little or no protectable expression, which affects both registration and enforcement. See AI-Generated Inventions: Who Owns What the Machine Creates.

Community property and marital interests. A few states have treated a copyright acquired during marriage as community property, which can complicate both transfers and termination succession. Address it in the estate plan rather than discovering it in probate. See Wills, Trusts, and Estate Planning Basics.

Bankruptcy. A copyright is property of the estate under 11 U.S.C. § 541, and a licensee of a bankrupt licensor has the protections discussed in Intellectual Property Licenses in Bankruptcy.

A worked example

Rill Audio, Inc. (fictional) is acquiring Lantern Sound, a fifteen-year-old sample library business. Diligence surfaces four ownership problems.

Problem 1: the founder's early recordings. The founder recorded the first 200 samples in 2011, before Lantern Sound was incorporated in 2013. There is no assignment from the founder to the company.

Analysis. The founder personally owns those copyrights. The company has an implied nonexclusive license at best. Fix before closing: a signed assignment from the founder, with consideration recited, plus recordation. This is cheap now and expensive later.

Problem 2: a contractor-built plugin. A freelance developer wrote the plugin in 2017 under a two-page agreement stating the work "is a work made for hire."

Analysis. Software is not among the nine categories, and the developer was not an employee. The clause fails and the developer owns the code. There is no fallback assignment. Fix: obtain an assignment now. Expect to pay, and expect the developer's leverage to be proportional to how badly Rill needs the plugin.

Problem 3: a co-written sample pack. Two sound designers collaborated on a 2019 pack. One signed an assignment; the other did not.

Analysis. If they are joint authors, the non-signing designer co-owns the whole pack and may license it to anyone, subject to accounting. Lantern Sound cannot grant Rill an exclusive right. Fix: obtain the second assignment, or price the risk. Test joint authorship under the governing circuit's standard before conceding it.

Problem 4: a 1988 grant. Lantern Sound licensed a composer's catalog in 1988 under an exclusive grant.

Analysis. Executed after 1978, so § 203 applies. The thirty-five-year window opened in 2023. If the composer served a timely notice, the grant may already be terminated or terminating. Fix: search Copyright Office records for recorded termination notices, obtain representations, and model what the derivative works exception preserves. If no notice was served and the window has passed for that grant, the right is gone under § 203, but check every other grant in the catalog individually because each has its own date.

The pattern. Every one of these was created by an omission that cost nothing to prevent and now costs real money and real leverage. That is the recurring shape of copyright ownership problems.

Diligence checklist

  • Inventory every material work and identify its author by name.
  • For each author, determine employee versus contractor status under Reid.
  • For each contractor, locate a signed agreement with a present assignment (not only a work-for-hire recital).
  • Check founder-created works predating incorporation.
  • Identify collaborations that could support a joint authorship claim.
  • Confirm registration accuracy as to author, claimant, and work-for-hire status.
  • Search Copyright Office recorded documents for prior assignments, security interests, and termination notices.
  • Build a termination calendar for every grant executed by an individual author.
  • Confirm no acquired work is subject to an unresolved open source obligation.
  • Record the acquisition assignment promptly.

Frequently asked questions

We paid for it. Don't we own it? No. Payment buys the deliverable, not the copyright, unless the creator was your employee acting within the scope of employment or you have a signed assignment. This is the single most common misunderstanding in the field.

Does "work made for hire" language in our contract fix it? Only if the work falls within one of the nine enumerated categories and the parties signed an express agreement. For software, logos, most photographs, and most designs, it does not. Always include a fallback assignment.

Can a joint author stop me from using the work? No. Each joint author may use and nonexclusively license the whole work, subject to accounting. That is why joint ownership is a poor substitute for an assignment.

Do I need a writing for a license? For an exclusive license, yes, § 204(a). For a nonexclusive license, no, and one may be implied from conduct. But get it in writing anyway; the scope fight is the expensive part.

Should we record our assignment? Yes for anything material. Recordation gives constructive notice and priority under § 205, and it is inexpensive.

Can an author really take back rights after thirty-five years? Yes, under § 203, if the work was not a work made for hire, if the grant was executed by the author, and if notice is served and recorded within the statutory windows. The right cannot be waived.

We bought a catalog. How exposed are we? It depends entirely on grant dates and work-for-hire status. Build the calendar, get representations and indemnities, and consider holdbacks for works with imminent windows.

Does termination affect our existing products? Derivative works prepared under authority of the grant before termination may continue to be utilized on the grant's terms, § 203(b)(1), but you may not create new derivative works afterward. Model both sides carefully.

What about foreign rights? Termination recaptures United States rights only. Foreign grants continue, which is why post-termination catalogs are often split by territory.

We are a small company without a lawyer. What is the one thing to do? Put a present assignment clause in every contractor agreement and never pay a final invoice until it is signed. That one habit prevents most of the problems in this article.

Closing thought

Copyright ownership is unusual among property regimes in that the default allocation is almost never what the parties assume. The money flows one way and the property stays where it started, silently, until someone runs diligence or the relationship sours.

The corrective is boring and effective. Ask who made it. Get a signed present assignment from everyone who is not an employee. Record the significant ones. Keep a calendar for grants that can be terminated. And never let a "work made for hire" recital stand alone in a contract for software, design, or photography, because in those categories the phrase is decoration.

Authors, for their part, should know that the statute reserved them a power their contracts cannot take away, and that the power expires if they do not calendar it.

Related articles

This article is provided for general informational purposes and does not constitute legal advice. Ownership, joint authorship, and termination outcomes depend on specific facts, dates, and jurisdiction. Consult qualified copyright counsel about any particular work or transaction.