[*PG549]WHO OWNS THE COPYRIGHT TO FACULTY-CREATED WEB SITES?: THE WORK-FOR-HIRE DOCTRINE’S APPLICABILITY TO INTERNET RESOURCES CREATED FOR DISTANCE LEARNING AND TRADITIONAL CLASSROOM COURSES
Abstract: The Internet has spawned an increased interest in distance education and in using technology to enhance traditional classroom courses. It has also created new markets for faculty-created works. This Article explores who owns these materials. The Article addresses the competing interests of faculty and universities. Educators are concerned about academic freedom and control of their work product. Universities are concerned about competition from their own faculty and the continued right to use faculty-created material in which they have invested considerable resources. Both sides are interested in who gets paid when others seek to use these materials. The Article suggests that courts recognize a teachers’ exception to the work-for-hire doctrine, vesting ownership in faculty-creators. It also offers proposals for written agreements which allocate rights between faculty and universities.
“We always thought our new competition was going to be ‘Microsoft University’ . . . . We were wrong. Our competition is our own faculty.”1 These were the words of “the president of an elite eastern university” as quoted in the lead paragraph of an article in the New York Times on the growing dispute between educators and universities over who owns the work product of faculty.2 Until recently, many educators [*PG550]probably had not considered this issue. Yet, as more faculty utilize the Internet and more institutions of higher education develop distance education programs, it is more important than ever that faculty and the institutions at which they work have clear ownership policies. Absent amendments to the existing Copyright Act or clear institutional guidelines, faculty and universities are left to find the answer within the current Copyright Act and the cases which interpret it. Unfortunately, these provide no clear answers. The outcome of this issue through litigation likely will turn on the specific facts before each court, thus providing limited precedential value, at least until a number of cases have wound their way through the courts.
This Article examines the use of information technology by educators and the status of copyright law as applied to faculty-created works. It explores the applicability of the work-for-hire doctrine to educators, as well as whether and when a teachers’ exception should apply. The assumption of this Article is that Congress will not act in this area. If it does, then the Article’s discussion of a teachers’ exception could provide a framework for such action. The Article also examines some existing institutional policies that purport to deal with these issues, and suggest how such guidelines should be drafted and implemented.
In a broad sense, information technology always has had a place in education. Overheads, reel-to-reel movies, sound recordings, and even blackboards, books, paper and pens are all types of information technology. When first introduced, the printed book was a revolutionary change in education and culture at large.3 Today, we take such [*PG551]tools for granted, not even thinking of these items as information tools. The past two decades, however, have seen an explosion in new or improved tools for delivering information to students. Perhaps the most prevalent information technology today is the Internet, but this is only one example of a revolution in information media. While cable television has been with us for decades, its use has spread remarkably in the past two decades. The space program has brought satellite transmissions. The late 1970s and early 1980s saw the advent of the video cassette recorder.4 These and other advances have been adopted rapidly by a public with an unquenchable thirst for information. It is only natural that educators would explore the use of these and other advances in information technology in a profession which is, after all, about delivering and interpreting information.5
The term “distance education” has been defined as “a form of education in which students are separated from their instructors by time and/or space.”6 In its Report on Copyright and Digital Distance Education (“the Report”), the U.S. Copyright Office limited its definition of “distance education” to “mediated instruction.”7 Mediated instruction was defined as “the delivery of instruction with a teacher active in determining pace and content, as opposed to unstructured learning from resource materials.”8 The Report noted: “An individual course may contain both classroom and distance education components. Some online courses require brief periods of on-campus instruction, [*PG552]for example, while many classroom courses use digital technology as a tool for directed research, delivery of resource materials, or communication between teachers and students.”9
Distance education is a concept that is more than 150 years old, originating in the correspondence courses of the nineteenth century.10 During the first half of the twentieth century, radio was the primary technology used for distance education.11 Television became the favored technology for distance education in the 1950s; this medium, along with video, is still widely used.12 Audio conferencing was introduced in the 1970s.13 The introduction of computer networks and multimedia technologies in the 1990s spurred the current interest in distance education.
The decade of the 1990s saw an explosion in information technology that will have profound effects on education in the new century. While the Internet has existed since the 1960s,14 in the 1990s it [*PG553]emerged from the exclusive domain of academic and government researchers and into wide-spread use by the public. Growth in the use of the Internet has occurred exponentially.15 Even before the World Wide Web burst upon the scene around 1994, educational use of the Internet was growing.16 At first, this use was largely limited to electronic mail—still probably the greatest use of the Internet.17 With the advent of the World Wide Web, the use of the Internet became easier and more attractive to a less technologically sophisticated audience. This created a dramatic acceleration in users18—a growth which is expected to continue into the early years of the twenty-first century.19
Faculty in a wide variety of disciplines responded by setting up Web pages and threaded discussion lists or news groups to enhance [*PG554]their courses.20 Some colleges and universities mandated at least some on-line material for all courses.21 Many other colleges and universities, while stopping short of mandating the use of technology in every course, took steps to encourage faculty to incorporate Web sites and other digital technologies into their courses.22 At the same time, a growing interest in distance education captured the imaginations of college administrators. The new technologies offered innovative ways to meet the educational needs of non-traditional students not able to relocate to a college and, thereby, boost enrollments.23 In addition, the Internet created a new publishing option—self-publishing electronically—for those wishing to make their research efforts available on the Internet.
In a study conducted by the Department of Education in 1995, more than 70% of higher education institutions reported that they planned to start offering, or increasing, courses using online or other computer-based technologies in the next three years.24 The study reported technologies in use to include “e-mail among teachers and students, class chat rooms, links to resources on the World Wide Web, incorporation of preexisting content in the course of instruction, and the delivery of supplementary materials in electronic form.”25 Use of these technologies have resulted in fundamental changes in the nature of distance education. With the older technologies, communication between teacher and student was often one way, with limited interaction via telephone or mail. The new digital technologies provide more teacher-to-student and student-to-student interaction.26 Further, the new technologies permit both synchronous (or immediate re[*PG555]sponse) and asynchronous (or delayed response) elements to be a part of the same course.27 For example, “e-mail, threaded discussion and self-paced testing” can be used for asynchronous education while “chat rooms and streaming audio” can provide synchronous elements.28 The latter can even provide both synchronous and asynchronous elements, with the streaming audio being archived for later review.29
The use of distance education is found at all educational levels. It is, however, most prevalent in higher education.30 By 2002, it is estimated that 2.2 million college students—or 15% of all higher education students—will take distance courses.31 This will represent an increase from 710,000 or 5% of all such students in 1998.32 In 1998, 62% of all four-year colleges offered distance learning courses; by 2002, this will increase to 85%.33 One reason for this rate of growth is that distance education is seen as an important revenue source in the academic and professional education market, which is already a $100 billion a year industry.34 In addition, the federal government has aggressively promoted distance education. The Higher Education Amendments Act of 1998 provides for “financial aid for distance education students, authorizes funding for the development of distance education programs, and established a ‘Web-Based Education Commission’ to assess the educational software available for students.”35
One of the appeals of the Internet, at least to some, is that it represents a kind of cyber-frontier, where the civilizing influence of the [*PG556]law has not yet reached.36 Much of the educational use of the Internet to date proceeded without any serious consideration of the legal issues created by such use. Historically, the ownership of the materials prepared by educators for their courses has not been an issue37; this remained true as educators first began to use the Internet.38 Like the physical frontiers of the past, however, wherever technology leads, the law is sure to follow. In response to changing technology, many schools suddenly are rewriting their policies on how professors may use course material .39 Why this sudden interest? The answer is simple: money.40
While no reported case has addressed directly the copyright ownership of such materials, such cases are likely to emerge in the coming years.41 It is easy to imagine the scenarios in which ownership of materials would become an issue. For example, suppose a professor is placed in charge of creating a distance learning program in a particular subject. The professor creates a Web site, records video of lectures, creates a chat room and an electronic mail discussion list (the [*PG557]communications of which are archived for future use), and even develops examinations administrable on-line. The program is developed over several years and becomes quite popular. The professor is then offered the opportunity to manage a similar program at another college. The professor, naturally, would like to take her work product with her. The university where she developed the course may want to retain the material for its use. Certainly, the university would not want to see another institution offering a course developed using its resources, particularly if not compensated. While such concerns might exist even when the materials are all paper based, the time and expense to develop a program using modern information technology creates an even greater incentive for universities to claim ownership of the materials.42 It also is not difficult to imagine that a well-developed package of course materials might have a market for resale to other institutions. Naturally, the faculty member who created the materials and the university for which she works both are interested in at least a share of the potential profits.43 Another possibility is that an author of a treatise or casebook may want to use an article by another professor (or even herself) self-published on a university Web site. The author needs to obtain permission from the copyright owner in order to use the article but from whom should she get such permission—the author or the institution employing the author?
The above scenarios are hypothetical examples of how disputes might arise. We no longer, however, need hypothetical examples. In late 1999 and early 2000, the Wall Street Journal and the New York Times each reported on a dispute between Harvard Law School and one of its well-known faculty members, Professor Arthur Miller.44 Miller is one of the relatively few law professors whose name and face is known to the general public. As legal editor for ABC’s “Good Morning America” and host of “Miller’s Court,” a television program in which a panel of experts examines a wide variety of public policy issues,45 Miller has gained a celebrity unusual for an academic. In the summer of 1999, Miller entered into a contract with Concord University School of Law, which is one of the first on-line law schools in the United States. Under his contract with Concord, Miller gave eleven [*PG558]lectures for a civil procedure course, which were videotaped for later use by Concord’s students. When Harvard Law School learned of this arrangement, it objected, citing its policies that prohibit its faculty from teaching for another educational institution during the academic year without the dean’s permission.46
Miller has denied that he violated that policy. Since he never “meets, interacts, or exchanges e-mail with any of the Concord students,” Miller maintains that he is not “teaching.”47 Instead, he has compared the videotapes to “casebooks, textbooks, hornbooks, student aids, audio tapes, data collections, or other educational material.”48 As will be discussed below, many educators assume that they own the rights to such materials under a so-called teachers’ exception to the Copyright Act’s work-for-hire doctrine. When applicable, the work-for-hire doctrine vests copyright for a work in the employer, not the employee who created the work.49 There has been little litigation on whether and when a teachers’ exception to that doctrine applies.
Although Congress held hearings and passed legislation dealing with distance education,50 including its impact on intellectual property rights, it ignored the issues addressed in this Article. Given that Congress appears unlikely to act, educational institutions and their faculty must develop policies that clearly set out their respective rights and obligations as related to educational materials prepared for on-[*PG559]line use, rather than leaving the resolution of these very important issues to the uncertainty and expense of litigation.
The growth in distance education and the use of the Internet and other information technology for traditional courses has profound implications in the area of intellectual property law, particularly copyright. While a great deal of work already has been done, both by the United States Copyright Office and Congress, most of the focus has been related to the use of pre-existing materials in such courses. For example, the Report on Copyright and Distance Education concentrates on fair use, licensing and related issues as they pertain to pre-existing materials used in distance education.51 The report cites earlier efforts in this area, including the Conference on Fair Use’s (“CONFU”) proposed guidelines for distance education52 and the Digital Millennium Copyright Act of 1998 (“DMCA”)53. Section 403 of the DMCA required the Register of Copyrights to submit to Congress “recommendations on how to promote distance education through digital technologies . . . while maintaining an appropriate balance between the rights of copyright owners and the needs of users of copyrighted works.”54 This mandate, however, does not extend to addressing ownership issues with respect to materials created or adapted for distance education courses. As a result, faculty who create such materials and the institutions which use them must turn to existing copyright law. These laws, however, were written before the wide-spread use of the technologies spurring the disputes—the Internet and the World Wide Web.
Naturally, the issue of ownership of faculty-created digital materials has not gone unnoticed. Some faculty members, out of concern [*PG560]over this very issue, have refused to make digital material available for their courses.55 Colleges and universities are just beginning to address the issue, at least to the extent of planning to develop policies and guidelines.56 Harvard and other institutions are developing or revising policies related to the outside activities of its faculty as a way of addressing university concerns about faculty selling course materials to other institutions57 Developing such policies, however, can lead to difficult negotiations between educational institutions and their faculty.58 For example, faculty at Athabasca University, when confronted with a university policy change, threatened litigation.59
Both sides have legitimate concerns. Traditionally, it was presumed that educators owned the copyright to academic work they have authored or created.60 Academic freedom is cited as a primary reason for such an arrangement.61 Educational institutions, on the other hand, claim an interest in the work and point to the faculty’s [*PG561]use of their resources in its creation.62 Institutions also can assert that producing such work is part of the educators’ employment obligation. These institutions have legitimate concerns about losing the right to use materials, created with their resources, by a “salaried employee.” Even more troubling to such institutions is the prospect that the educator could sell the product to other institutions which, in turn, may use these materials to compete against them—the institution which incurred the cost to create the materials.63
The American Association of University Professors (“AAUP”) has prepared a Draft Statement on Copyright (“Draft Statement”) which advocates that faculty members should be the owners of “courseware” they develop for distance education programs.64 The AAUP notes that while some institutions have policies that proclaim their ownership of such materials, the Copyright Act of 1976 (hereinafter the “1976 Act”) requires a writing, signed by the author, to create a legally-binding transfer of the copyright.65 Of course, this requirement is only relevant if in fact the educator who creates the material is its owner. Current copyright law leaves in doubt the issue of who owns such works.66 Even if current law recognizes faculty-creators as owners, colleges and universities could argue that employment contracts, which incorporate by reference such policies and which are signed by the educator, satisfy the signed written transfer requirement of the 1976 Act.67 Further, as in Arthur Miller’s dispute with Harvard, universities may seek to prevent current faculty from selling their course materials to other [*PG562]institutions under outside employment restrictions contained in university policies or employment contracts.68
The Draft Statement recognizes three categories of projects in which a college or university “may fairly claim ownership of, or an interest in, copyright in works created by faculty (or staff) members.”69 Those three categories are “special works created in circumstances that may properly be regarded as ‘made for hire,’ negotiated contractual transfers, and ‘joint works’ as described in the Copyright Act.”70 As to the first of these, the Draft Statement recognizes an institution’s claim of ownership where the works were “created as a specific requirement of employment or as an assigned institutional duty.”71 Examples given in the Draft Statement include “reports prepared by a dean or by the chair or members of a faculty committee, or college promotional brochures prepared by a director of admissions.”72 Course examinations were specifically identified as materials that would be the exclusive property of the faculty member.73 As to the second category, contractual transfers, the Draft Statement identified as an example “a work prepared pursuant to a program of ‘sponsored research’ accompanied by a grant from a third party,” noting that in such circumstances that “a contract signed by the faculty member providing that copyright will be owned by the institution will be enforceable.”74 The Draft Statement continues:
Similarly, the college or university may reasonably request that the faculty member—when entering into an agreement granting the copyright or publishing rights to a third party—make efforts to reserve to the institution the right to use the work in its internally administered programs of teaching, research, and public service on a perpetual, royalty-free, nonexclusive basis.75
Finally, the Draft Statement provides: “In rare situations, . . . it may be proper to treat a work as a product of the joint authorship of the fac[*PG563]ulty member and his or her institution, so that both have a shared interest in the copyright.”76
The Draft Statement expresses principles upon which a rational allocation of copyright could be based. Its first category proposes a logical analysis for whether a particular work created by an educator should be deemed a work-for-hire. It is not at all clear, however, that this is in fact the current state of the law.77 As to the second category, there appears to be no legal basis for the implication that, absent special circumstances, a signed writing purporting to transfer copyright from an educator to an institution at which she worked would not be enforceable. There is no language in the 1976 Act, or in case law interpreting it, that indicates an educator lacks the capacity to transfer copyright of her work product to the institution that employed her.
Generally, copyright initially vests in the author of the copyrightable work.78 Specifically, the 1976 Act grants copyright protection for “original works of authorship fixed in any tangible medium of expression.”79 Often the creator of a work and its “author” are the [*PG564]same.80 This is not, however, always the case; section 201(b) of the 1976 Act provides that a “work for hire” is the property of the employer of the creator of the work, not of the creator.81 Put another way, the employer, not the creator, is the work’s “author” for purposes of copyright. The copyright statute defines a work-for-hire as “a work prepared by an employee within the scope of his or her employment.”82
Copyright law is founded in article 1 of the Constitution of the United States: “The Congress shall have Power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”83 Congress acted quickly in exercising this power, enacting the first copyright statute in 1790.84 Even before any statutory or common law work-for-hire doctrine existed, employers were claiming ownership of the works of their employees. The famous 19th century photographer, Mathew B. Brady, claimed credit for any photographs created by any operator (as photographers were then known) working for him, even when the operator made the images after work hours and used his own equipment.85 The work-for-hire doctrine first appears in the law of the late nineteenth and early twentieth centuries. The doctrine was introduced not by Congress, but by [*PG565]the courts.86 Interestingly, the first case to address this doctrine, Colliery Engineer Co. v. United Correspondence Schools Co., involved the use of a compilation prepared by an educator for the use of his employer.87 The court in Colliery found that his contract of employment required the educator, Ewald, “while a salaried employe [sic] of complainant, inter alia, to compile, prepare, and revise the instruction and question papers.”88 From these facts, the court concluded that “the literary product of such work became the property of the complainant [i.e., the employer], which it was entitled to copyright, and which, when copyrighted, [the employee] would have no more right than any stranger to copy or reproduce.”89 In Bleistein v. Donaldson Lithographing Co., the Supreme Court cited the opinion in Colliery in finding that “designs belonged to [an employer], they [sic] having been produced by persons employed and paid by the [employer] in their establishment to make those very things.”90 This finding gave the employer standing to sue for infringement.91
Shortly after the Bleistein decision, Congress enacted the Copyright Act of 1909 (“1909 Act”), in which the work-for-hire doctrine was first codified.92 The 1909 Act defined “author” to include “an employer in the case of a work for hire.”93 In An Academic’s Copyright: Publish and Perish, Leonard D. DuBoff asserts that “the congressional committee that drafted the 1909 Act was concerned primarily with materials for composite or encyclopedic works created by a number of salaried employees for a large publication by an employer publisher.”94 A study prepared by the Copyright Office, which was cited by DuBoff, states:
It seems that the committee’s major concern in this situation is [sic] not its only concern–was with cases where a [*PG566]number of authors contributed to a single work. It is almost as if the committees were unaware that the provisions concerning works made for hire had been added the bills they were reporting.
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The committee report on this final bill indicates a likelihood that the legislators regard a “work for hire” as a species of “composite or encyclopedic work,” and did not realize the breadth of the exception they were creating.95
Be that as it may, the work-for-hire doctrine created in Colliery and adopted by the Supreme Court in Bleistein now was made a part of the Copyright Act itself. If Congress intended it to apply only to composite works, nothing in the language enacted indicated such a limitation. Based on this language, the courts crafted a rule that makes the employer the author of works created by salaried employees in the regular course of their employment.96
In 1976, Congress passed major revisions to copyright law. The 1976 Act included more detailed definitions and provisions related to the work-for-hire doctrine. Specifically, the 1976 Act defines a work-for-hire as “a work prepared by an employee within the scope of his or her employment.”97 Additionally, section 201 provides, inter alia:
In the case of a work for hire, the employer or other persons for whom the work was prepared is considered the author for purposes of this title, and unless the parties have ex[*PG567]pressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.98
The 1976 Act did not define the terms “employee” and “employer” as used in the act. This led to a split among federal circuit courts of appeal as to the meaning of those terms and, hence, the application of the work-for-hire doctrine. One line of cases (representing the views of the Second, Fourth, and Seventh Circuits) focused on the hiring party’s control of the product that was the subject of the copyright dispute.99 The Ninth Circuit utilized a multifactor formal, salaried employee test.100 The Fifth Circuit applied agency law to determine whether the creator of a work was an employee as used in the 1976 Act.101
In 1989, the United States Supreme Court accepted certiorari in Community for Creative Non-Violence v. Reid in order to resolve this conflict among the Courts of Appeal.102 In Reid, an organization dedicated to eliminating homelessness entered into an oral agreement with a sculptor to produce a statue dramatizing the plight of the homeless for display at a Christmas pageant.103 The sculptor provided sketches to the organization of his proposed sculpture, a modern Nativity scene depicting a homeless black family huddled on a streetside steam grate.104 The parties disputed the purpose of the sketches; the sculptor asserted that they were to be used for fund raising while a member and trustee of the organization claimed that the sketches also were offered for his approval.105 In any event, the sculptor did make modifications based on input from the organization.106 The parties, however, did not discuss copyright ownership.107 When a dispute arose between the parties as to taking the sculpture on tour, the sculptor, who had possession of the work at the time, refused to return it [*PG568]and filed a certificate of copyright registration.108 A trustee of the organization filed a competing certificate of copyright registration on behalf of the organization and commenced a civil action seeking return of the sculpture and a determination of copyright ownership.109 The district court declared that the sculpture was a “work made for hire” under Section 101 of the Copyright Act and found that the organization’s trustee (on behalf of the organization) was the exclusive owner of the work’s copyright.110 The Court of Appeals for the District of Columbia Circuit reversed and remanded, holding that the sculpture was not work-for-hire and that the sculptor was the copyright owner.111
In affirming the Court of Appeals’ judgment, the Supreme Court examined the legislative history of the 1976 Act as it related to the work for hire provisions112 and noted that “[i]n the past, when Congress has used the term ‘employee’ without defining it, we have concluded that Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.”113 The Court, relying “on the general common law of agency, rather than on the law of any particular [s]tate,”114 offered a multi-factor test to determine whether a hired party is an employee:the hiring party’s right to control the manner and means by which the product is accomplished . . . . [;] the skill required; the source of 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 to the hired party; 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; the provision of employee benefits; and the tax treatment of the hired party.115
The Court noted that no one factor was determinative.116
Several cases have applied and elaborated on the Reid test. In Ay
[*PG569]mes v. Bonelli,117 the Court of Appeals for the Second Circuit reversed a finding that Aymes, the creator of a software program, was not the employee of Bonelli.118 In so doing, the Court of Appeals criticized the lower court for giving each of the Reid factors equal weight and merely adding up the factors for each side in determining that Aymes was an employee.119 Instead, the appellate court found that some factors of the Reid test would have no applicability in some cases, while others would “be significant in virtually every situation.”120 It identified these latter factors as the following: “(1) the hiring party’s right to control the manner and means of creation; (2) the skill required; (3) the provision of employee benefits; (4) the tax treatment of the hired party; and (5) whether the hiring party has the right to assign additional projects to the hired party.”121 Further, the court found that these factors would not only “almost always be relevant,” but concluded that they “should be given more weight in the analysis, because they will usually be highly probative of the true nature of the employment relationship.”122 The Aymes court cited six other decisions which had adopted this weighted approach.123 Using this weighted analysis, the appellate court concluded that Aymes was not an employee of Bonelli.124
Applying the factors outlined by the Reid Court, most faculty are, without serious question, employees of the institutions at which they work. Starting the analysis with the five factors identified in Aymes as virtually always significant and deserving the most weight, the first factor—the hiring party’s right to control the manner and means of creation125—appears to favor a finding that a faculty member is not an [*PG570]employee. Few universities seek to control the content, or even the subject matter of a faculty-created scholarly work. Likewise, universities seldom provide detailed requirements (beyond a general requirement to cover the subject matter) with respect to the content and presentation of courses. Faculty members, however, are required to teach, conduct significant research and publish findings in order to obtain tenure. In addition, this factor could favor a finding that the faculty member is an employee in circumstances where the university assigns the faculty member a specific project—such as the preparation of a distance learning course, material for such a course or, as seen in the cases of UCLA and Florida Gulf Coast University, Internet-based materials for classroom-based courses.126
The second of these factors—the skill required127—also seems, at least at first glance, to favor a finding that faculty are not employees, for faculty members are highly educated and accomplished scholars. This factor, however, may encompass more than the skill needed to create the content of the materials; it also may look at the skills needed to publish those materials electronically. While many faculty members have developed a great deal of skill in this area, others depend on their school’s information technology personnel or librarians to convert their intellectual output into Internet-published works. The third factor—provision of employee benefits128—definitely favors finding faculty members to be employees. Most universities provide employee benefits in the form of health care insurance, retirement, tuition waivers or reductions and a number of other benefits. Similarly, the tax treatment of faculty 129 in most cases favors finding faculty to be employees. Universities typically perform tax managing services such as withholding federal and state income taxes and withholding the faculty member’s portion and paying the employer’s share of F.I.C.A. taxes.
An analysis of the final factor—the hiring party’s right to assign additional projects to the hired party130—produces mixed results when applied to faculty members. Again, the university usually does not assign specific research topics, but it may assign the courses taught and, as at UCLA and Florida Gulf Coast University, require the creation of Internet-based materials for the course, or require a pro[*PG571]fessor to create materials for a distance learning course she is teaching.131
The Aymes formulation also requires determining which of the remaining Reid factors apply to the particular case and the evaluation of those factors.132 One remaining factor that may influence finding a faculty member an employee is the instrumentalities and tools used in creating the product.133 Most faculty placing work on a Web site use their institution’s: libraries and on-line services to conduct research in preparing the work; computers and software to conduct research and to create the work; space on a server to store the work; Internet connection to make the material available to the world; and, depending on skill level, the assistance of other institutional employees throughout the process of making the material available to its intended audience. Were a faculty member to use her own personal computer and software to research and create the material and acquire and pay for “publication” space from a commercial Internet service provider (“ISP”), then this factor would support a finding that she is not an employee.
Usually, the location of the work factor134 also would favor a finding that the faculty member was an employee. Much, if not most, of the effort in creating the work typically is done at the university. Additionally, the work in many cases is stored and made available on the university’s server. Even if a large portion of the work is done at home, this does not lead to a conclusion that the creator of the work is not an employee, as will be discussed below.135 Applying this factor to educators, however, presents some difficulties since their “product” is created over an extended period, incorporating the totality of their experiences. For example, when, as in Arthur Miller’s case, an educator uses previously prepared lecture material for an educational institution other than the one at which he is a faculty member, the evaluation will be very fact specific. If the educator has taught the same courses at several institutions over many years, it is likely that while the material was prepared in the course of employment, it probably was prepared and refined while working for different employers. Educators are not likely to leave behind the material they prepared for a course at one institution when they take a position at a different insti[*PG572]tution.136 Further, an educator may incorporate concepts and expressions in her course materials which she developed as a consultant or through other outside activities. Nonetheless, in many cases, a court could find that materials were prepared in the scope of the educator’s employment at the university at which he or she is a faculty member.
The duration of the relationship factor137 also supports finding that the faculty member is an employee. Both faculty and universities, absent a visitorship or fellowship arrangement, anticipate an on-going relationship of many years, not limited by the time needed to complete any particular copyrightable work. As most full-time faculty receive a salary, the method of payment factor138 also favors a finding that the faculty member is an employee. The hired party’s role in hiring and paying assistants139 generally favors a finding that faculty are employees, assuming that the university, not faculty, pay research assistants. Depending on the nature of the work, which will be explored more fully below, the work created may be part of the regular business of the hiring party.140 Universities are in the business of educating students, which includes the creation of courses and materials used in those courses. This is true whether the course is classroom-based or part of a distance learning program. Additionally, institutions of higher education are in the business of producing and publishing scholarly research. Although the final factor—whether the hiring party is in business141—at first may seem to favor a finding that a faculty member is not an employee, since most educators do not think of themselves as working in a business, a non-profit entity is considered to be “in business” for purposes of determining whether or not the creator was an employee under the work-for-hire provisions of the 1976 Act.142 That faculty are employees of the institutions at which they work seems beyond reasonable dispute.143
Establishing that faculty are employees is only the first step in deciding if the work-for-hire doctrine applies.144 The second step is determining whether a specific work was prepared in the scope of the educator’s employment.145 Courts have developed a three-part test based on the Restatement (Second) of Agency for determining whether or not an employee acted within the scope of her employment when preparing a copyrightable work. Those factors, all of which must be shown to establish that the employee was acting within the scope of her employment, are: (1) whether the work is of the type that the employee is employed to perform; (2) whether the work occurs substantially within authorized work hours; and (3) whether its purpose, at least in part, is to serve the employer.146
In Miller v. CP Chemicals, Inc., the federal district court addressed the scope of employment issue.147 The case involved an employee who created computer programs which his employer continued to use after his termination. Miller was initially employed by CP Chemicals as a technician in its quality control laboratory, but was soon promoted to a senior laboratory chemist and ultimately to laboratory supervisor.148 While working as a senior laboratory chemist, Miller requested that CP Chemicals purchase spreadsheet software; Miller intended to use the software to store analytical data regarding CP Chemicals’ customer product specifications.149 After being promoted to laboratory supervisor, Miller organized the laboratory’s records to meet federal environmental and work safety regulations and completed computerization of all the laboratory’s analytical data.150 He also wrote a computer program to compute complex mathematical calculations previously done manually, simplifying his duties and decreasing the chance of error.151 Miller’s supervisors then asked him to do the same for other products, which he did.152 Miller, who was an hourly employee, did most of this work at home and on his own time, receiving no addi[*PG574]tional compensation.153 Miller was terminated from his job in June 1991. Thereafter, he demanded that CP either return to him the programs he had written or pay a license fee for their continued use. CP refused both demands.154
Although the district court found that Miller failed to register a copyright to the programs and thus had no valid claim for infringement, it nonetheless analyzed Miller’s claim in light of the work-for-hire doctrine.155 The court noted Miller’s contention “that the computer programs were a result of his own initiative and that they were written and tested at his home on his personal computer.”156 The court turned to the comments to section 229 of the Restatement, which provided: “(1) Conduct of a servant is within the scope of employment if, but only if: (a) it is of the kind he is employed to perform; (b) it occurs substantially within the authorized time and space limits; [and] (c) it is actuated, at least in part, by a purpose to serve the master.”157 The court further noted that the Restatement provided that “acts incidental to authorized acts may be within the scope of employment”158 but that “[t]o be incidental, . . . [the act] must be one which is subordinate to or pertinent to an act which the servant is employed to perform [and ] . . . must be within the ultimate objective of the principal and an act which is not unlikely that such a servant might do.”159 Analyzing the three factors from the Restatement, the court found that Miller had acted in the scope of his employment when he developed the software in question.160 First, the court found that while Miller “was not hired primarily for the development of computer programs, . . . he was responsible for the organization and updating of the laboratory”161 and that “the development of the computer programs was at least incidental to his job responsibilities because it was ‘within the ultimate objective of the principal and an act which is not unlikely that such a servant might do.”162 Second, the court found [*PG575]that while Miller did much, if not all, of the development on his home computer, it “was performed during the time period in which he was employed by CP.”163 Finally, the court found that the development of the software “was actuated, at least in part, by a purpose to serve the master.”164 As a result of these findings, the court held that the development of the software was within the scope of Miller’s employment.165
In perhaps a more analogous case, Marshall v. Miles Laboratories, Inc., the federal district court held that an article written by an employee was done within the scope of his employment and the employer owned the copyright.166 The employee argued that he had written the article at home, was not specifically instructed to write the article and received no additional compensation.167 The employer responded that the research for the article was done at work, while at work the employee discussed the article with one of the employer’s scientists, this scientist was co-author of the article and the employee received reimbursements from his employer for the costs of presenting the article at a symposium.168 The court noted further that the employee’s job description included the development, summarization and reporting of “information about advances in technology to” the employer, in concluding that the employer owned the copyright.169
Given the Miller and Marshall cases, it is hard to imagine that a court would find that faculty-created scholarly articles, books and teaching materials are not prepared within the scope of employment. Faculty are employed to create scholarly works and to teach courses, which of necessity requires the preparation of course materials.170 Most faculty probably work on their scholarship and course preparation both at the office and at home. Even if a faculty member prepared all of the material at home, the Miller case still would support a finding that it was prepared in the scope of employment. Finally, since [*PG576]universities encourage, and even require, scholarship and teaching assignments, it unquestionably is difficult for a faculty member to assert successfully that the work was not actuated, at least in part, by a purpose to serve the university.
Although courts likely will find faculty to be employees of educational institutions and their scholarship and course materials to be prepared in the scope of employment, some writers nonetheless proclaim that an overriding “teachers’ exception” exists to the work-for-hire doctrine, vesting authorship in the teacher-employee rather than her employer.171 Other writers have denied that such an exception exists.172
In Hays v. Sony Corp. of America, Judge Posner discussed the teacher exception.173 In Hays, high school teachers brought a copyright infringement action against a corporation that modified a word processor manual, prepared by the teachers at the request of their school.174 The court stated:
Until 1976, the statutory term “work made for hire” was not defined, and some courts had adopted a “teacher exception” whereby academic writing was presumed not to be work made for hire. [Citations omitted.] The authority for this conclusion was in fact scanty, . . . but it was scanty not because the merit of the exception was doubted, but because, on the contrary, virtually no one questioned that the academic author was entitled to copyright his writings. Although college and university teachers do academic writing as part of their employment responsibilities and use their employer’s paper, copier, secretarial staff, and (often) computer facilities in that writing, the universal assumption and practice was that (in the absence of an explicit agreement as [*PG577]to who had the right to copyright) the right to copyright such writing belonged to the teacher rather than to the college or university.175
The court then sets forth the reasons for such an exception, including the lack of university supervision of faculty in the preparation of scholarly writings.176 Asserting these reasons for a teachers’ exception “are as forceful today as they ever were,”177 the court noted:
Nevertheless it is widely believed that the 1976 Act abolished the teacher exception [citations omitted] – though, if so, probably inadvertently . . . . To a literalist of statutory interpretation, the conclusion that the Act abolished the exception may seem inescapable . . . . But considering the havoc that such a conclusion would wreak in the settled practices of academic institutions, the lack of fit between the policy of the work-for-hire doctrine and the conditions of academic production, and the absence of any indication that Congress meant to abolish the teacher exception, we might, if forced to decide the issue, conclude that the exception has survived.178
Judge Posner’s conclusions, however, are dictum and have no binding, precedential value.179 Nonetheless, this opinion is often cited by advocates of the existence for a teachers’ exception to the work-for-hire doctrine.
[*PG578] There is nothing in the 1976 Act to support a teachers’ exception.180 Further, there is no controlling case authority to support such an exception. One must look, however, at the policy behind the work-for-hire doctrine and its effects if applied to educators to determine if a teachers’ exception is warranted. The possible applications of the work-for-hire doctrine to the work of educators are many, but there are three primary categories of work related to the Internet likely to produce disputes: scholarly work (for example, articles, monographs and books); course materials prepared for traditional classroom teaching which are later adapted for distance learning or other on-line publication; and course materials specifically prepared for integration into a distance learning program.
Absent agreements or policies to the contrary, scholarly work generally has been presumed to be owned by the educator, not the institution at which he or she works. There are good policy reasons for this. First, the same policy that underlies tenure—academic freedom—supports faculty ownership of their intellectual work product. If universities owned the copyright to articles, monographs and books written by their faculty, they could suppress unpopular or controversial views of their faculty. Faculty writings often have instigated or propelled changes in the law and societal attitudes. Controversial scientific opinions later have been accepted in the general scientific community. Universities may be tempted to suppress views expressed by their faculty which seem out-of-step with the views of alumni, prospective students and their parents, and financial contributors. They also may feel pressure to suppress novel or controversial ideas that they expect to be rejected by the general academic community.
Second, faculty long have looked to royalties from textbooks, casebooks and monographs for additional income. In general, educators accept lower pay to remain part of the academy when opportunities in the private sector beckon. The prospect of outside sources of [*PG579]income helps some educators support that decision. Since economic value for scholarly work is directly linked to the reputation of the academic in their field, depriving educators of the fruit of their labor may compel scholars to leave the academy. As a result, the next generation of scholars would not receive the benefit of learning from the most talented and respected thinkers in their field.
Since institutions of higher education never have received revenue from such work in the past, applying a teachers’ exception to such materials published in electronic format does not deprive the university of income on which it now relies. Nor does allowing educators to retain copyright to these materials create potential competition for the universities at which they work. That some such materials have enhanced value due to the advent of the Internet and other high tech media does not change these facts. Thus, a teachers’ exception to the work-for-hire doctrine should be applied to all such works.
Course materials are a different matter. If faculty own this material, they can sell it to their employers’ competitors.181 There are, nonetheless, good reasons to apply a teachers’ exception to course materials. Faculty develop more than expertise while working at a university; they develop lecture notes, syllabi, teaching methods, examination and other evaluation material for the courses they teach. Traditionally, when they relocate, faculty take their course materials with them.182 If the universities where they develop course materials own those materials, educators would have no more right to the material they developed than would anyone else.183 Without university permission, they would be denied the ability to recreate their courses at other institutions. This would have the effect of providing a powerful disincentive to faculty movement. Yet this very movement is important to the dynamic nature of the educational system. In addition, faculty may use portions of their course materials when conducting presentations at seminars and conferences with colleagues in their field. This use is also important in developing effective teaching methods throughout the institution, and the academic community as a whole.
[*PG580] Universities could argue that it is one thing for faculty to take their course materials when they move to another institution or to use small portions in presentations, but it is quite another for them to videotape lectures and provide examination materials to a competitor—whether on-line or bricks-and-mortar—while still employed by the university at which these materials were created. This position has some merit. A rule certainly could be fashioned that made faculty owners of such works for some purposes but not for others. Such a rule, however, would be cumbersome. Each new use of these materials would create the potential for litigation. It also would result in different treatment of these materials than has actually been the practice in the past. That such material now has much greater value is no reason to change the way ownership of course material is determined. While universities may have waived any rights to course materials in the past—because they believed that it was not worth the cost, both financially and in terms of faculty relations, to assert such rights—the fact remains that until recently there has been no serious effort to prohibit faculty’s outside use of course materials. The universities’ legitimate concerns in this area, as in any of the examples discussed, are addressed better through written agreements that modify the rules in ways that meet the specific interests of all parties.
Materials integrated into a university’s distance learning program are a substantially different matter. In such cases, the universities have expended substantial resources, including the cost of converting the educator’s intellectual content into the formats required by the distance education technology. An educator’s subsequent claim of ownership deprives the university not only of the benefits of its expenditures, but could disrupt the entire distance learning program. While this problem also may exist with traditional classroom courses, the time and expense involved in integrating the content into a useful format for a distance learning program increases the university’s interest. Further, students who enroll in such programs expecting to take courses in a particular sequence face unnecessarily the risk that these plans could be interrupted by a single educator. This, however, does not support vesting exclusive rights to the intellectual content in the university, only that they have a perpetual, non-exclusive license to use of the videotapes, computer files or other media comprising the distance learning program. This license also should permit the institution to revise and update course materials for its distance learning programs. The educator who created the course materials should have the right to demand credit for its creation or, alternatively, that her name be removed as the creator. This would allow the creator to [*PG581]receive credit for her intellectual contribution to the course while at the same time permitting her to disassociate herself from it should the material become out-of-date or be revised in a manner unacceptable to the creator. Competition which may arise from other institutions wanting to use the course materials should be resolved through written contracts between educators and the universities for whom the distance education material is prepared or adapted. If a faculty member wishes to waive or limit her right to future use of such material as part of her bargain with a university, she may do so, but the default rule need not provide such a restrictive arrangement.
Perhaps a case will eventually settle whether a “teachers’ exception” exists to the work-for-hire doctrine. While the above discussion presents a reasoned outline for a “teachers’ exception,” it would be risky to both educators and institutions to rely on such an exception at this time. Even if the issue ultimately is resolved in the courts, unnecessary litigation costs and delays will be incurred by all parties to the dispute. This uncertainty has and will continue to inhibit some faculty who might otherwise create innovative Internet-based materials.184 Potential third-party purchasers of licenses or of the copyright itself would be prudent to steer clear of a work whose ownership is uncertain. Such third-parties would certainly factor that uncertainty into any fees paid if less than all potential copyright owners agreed to the license or transfer. Further, protracted negotiations between rival claimants to a copyrightable work could lead a potential licensee or transferee to find a comparable work elsewhere rather than wait for the rivals to resolve their dispute. There is no evidence that Congress will act to clarify the law in this area. For all these reasons, educators and universities should have policies that clearly spell out the respective rights of the parties so as to avoid litigation and lost opportunities for profit from educator-created works.
There are no one-size fits all agreements. The parties can and should be creative in structuring ownership and licensing arrangements, tailoring the agreements to meet the specific needs of the parties involved.185 For example, the parties may agree to joint ownership [*PG582]using cross-licensing arrangements. This provides incentives for both educators and universities to develop materials since each is assured of its continued use of the materials. Additionally, an educator may be willing to forgo the right to make future use of certain materials, should she leave the institution, in exchange for additional compensation. An institution may be willing to limit the time it is allowed to use the material. How the faculty and institution divide any proceeds from sales of integrated distance learning course packages also could be negotiated.
Many examples of such agreements are available.186 Agreements range from one page documents, that set forth general principles for deciding ownership and licensing issues,187 to lengthy, detailed policies that define a variety of types of faculty works, the circumstances under which the works were created, and provide for different ownership and licensing arrangements depending on these factors.188 In order to minimize potential disputes, perhaps the latter approach is the wisest.189 Ambiguity invites disputes and litigation. Policies, guidelines and other agreements naturally will vary from institution to institution and even within institutions. The important issue is not the precise terms, but that such policies and agreements are created, are [*PG583]clear and deal with all foreseeable types of work. They should not be limited to existing media, but should be written in a manner preserving the agreement’s application to later development. When this is not the case, they will need to be revised. An approach that relies on policies and guidelines incorporated by reference in employment contracts, while perhaps enforceable, is less desirable than one in which each faculty member signs the writing that actually contains the terms of the agreement. This is the approach taken by Indiana University’s Copyright Management Center, which created a sample “Agreement for the Production of Distance Education Course Materials.”190 It is much more likely that faculty members will realize what rights they keep and what rights they assigns to others when they sign an agreement than when the policies are set forth in a faculty handbook or other lengthy document containing unrelated policies and guidelines.
The advent of the Internet did not create the legal issues surrounding faculty-created works, but only created greater incentives—due to the enhanced value of the work—to litigate over ownership. Perhaps the reason that people have accepted the notion of a teachers’ exception to the work-for-hire doctrine is that educational institutions appear to lack sufficient incentive to challenge such an exception. This perception is likely to change as colleges and universities scramble to develop and implement distance education programs and faculty continue to develop polished Internet-based content for their traditional courses. In order to encourage the fullest possible development of on-line educational resources for the American public, Congress should amend the 1976 Act to set forth clearly the respective rights and obligations of educators and educational institutions as to educator-created material. Uncertainty can only inhibit faculty [*PG584]from developing content which they would otherwise create. Absent Congressional action, courts should recognize a teachers’ exception to the work-for-hire doctrine. Recognition and development of a teachers’ exception by the courts is likely to come slowly and unpredictably if at all. Educators should own their works of scholarship and course preparation, with licensing provided to institutions in circumstances where such works have been integrated into distance learning programs. If this arrangement does not meet the needs of particular faculty and universities, tailored arrangements can be reached by written agreement. Rather than relying on an uncertain outcome, educators and educational institutions should negotiate written agreements that meet the needs of all the parties with an interest in copyright and licensing of the intellectual work product.