Paul Caron brought an interesting piece in yesterday’s Wall Street Journal to my attention: Candid Camera: Trove of Videos Vexes Wal-Mart. The story: about 30 years ago, Wal-Mart hired a small video production firm to record meetings of Wal-Mart’s executives, as well as speeches, shareholder meetings, sales presentations, and the like. The video recording outfit kept all its tapes, never overwriting them with new material. As a result, over the years the firm accumulated a massive library of video recordings documenting life inside Wal-Mart — including some footage of executives saying and doing things they surely later wished hadn’t been recorded.
Two years ago, the retail giant and the video recording firm parted ways. Now, to Wal-Mart’s understandable chagrin, the video firm has offered to open its archives — for a fee — to all sorts of people who take a rather dim view of Wal-Mart: plaintiffs’ lawyers, labor organizations, documentary filmmakers, and the like, many of whom have already paid substantial amounts for damning clips from the video firm’s archives.
From the article:
Wal-Mart isn’t pleased. “It’s difficult to understand how the company could now sell to third parties the material we paid it to produce on our behalf,” says a Wal-Mart spokeswoman. “Needless to say, we did not pay Flagler Productions to tape internal meetings with this aftermarket in mind.” She adds that the company is “reviewing our legal options.”
Let’s review those legal options along with them, shall we?
Under Section 201(b) of the Copyright Act, “In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.” So far, it sounds pretty good for Wal-Mart! If the videos were “works made for hire,” then Wal-Mart (the “person for whom the work was prepared”) owns the rights, unless the parties agreed otherwise in writing.
But that’s about the end of the good news for Wal-Mart. The exceedingly complicated definition of “work made for hire” in section 101 of the statute gives two alternatives, neither of which looks promising (emphasis mine):
A “work made for hire” is—
(1) a work prepared by an employee within the scope of his or her employment; or
(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.…
I think we can safely rule out option #1, works created by employees within the scope of their employment. The Supreme Court ruled in CCNV v. Reid, 490 U.S. 730 (1989), that in using the terms “employee” and “scope of employment,” Congress meant to incorporate “the conventional master-servant relationship as understood by common-law agency doctrine,” id. at 740. In a passage that has vexed copyright students ever since, the Court continued:
In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party’s right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; 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.
Id. at 751–52. Reid didn’t qualify as an “employee” under this standard because his relationship with CCNV was that of an independent contractor hired to do a particular job — he wasn’t put on CCNV’s payroll, didn’t receive employment benefits, and so forth. Without knowing more, I’d surmise that much the same was likely true of Wal-Mart’s relationship with the video recording firm. So Wal-Mart likely won’t be able to characterize the videos as works created by an employee within their scope of employment.
That leaves option #2, which converts some works created by non-employees (i.e., independent contractors) into “works made for hire.” There are two prerequisites here: (a) subject matter, and (b) written instrument. The videos probably pass the subject matter test; they’d likely be considered “audiovisual works” under the statute. What about the “written instrument” part of the test? Did Wal-Mart and the video recorder agree in writing that the videos would be works made for hire, owned by Wal-Mart? According to the WSJ story (emphasis mine):
The production company’s founder and former owner, Mike Flagler, says he was hired on a handshake in the 1970s …
Corporate records typically are closely controlled through legal contracts that restrict access and use. Mr. Flagler says he never signed a contract with Wal-Mart for the production or video work. Flagler Productions says that that arrangement left ownership and control of the films with it.
Flagler has a good point. Under cases like Effects Associates v. Cohen, 908 F.2d 555 (9th Cir. 1990), copyright in video footage ordinarily attaches in the first instance to the person who fixed it in a tangible medium. To divest Flagler’s company of the copyright in its footage, Wal-Mart needs to show that it was a “work made for hire” — which is going to be problematic either under option #1 (because the video firm wasn’t an “employee”) or option #2 (because the parties had no written agreement) of section 101′s “work made for hire” definition.
What’s left for Wal-Mart here? Perhaps they could try to show, as the plaintiff successfully did in Lindsay v. RMS Titanic, 52 U.S.P.Q.2d 1609 (S.D.N.Y. 1999), that a Wal-Mart exec was really directing the videography — that it was Wal-Mart, not Flagler’s company, that was really choosing camera angles and composing the shots. If Flagler’s camera operators are just mechanically implementing creative decisions that are actually being made by Wal-Mart itself, Wal-Mart would have a correspondingly stronger claim to authorship of the disputed footage. The Hail-Mary play would be a right of publicity claim grounded in the rights of Wal-Mart’s execs to control uses of their own likenesses, but with the possible exceptions of Sam and Hillary, most of the Wal-Martites (Wal-Marters? Wal-Martians?) shown in the videos are going to have trouble establishing their celebrity bona fides. According to the WSJ story:
In a Jan. 14 letter to Flagler, Marshall S. Ney, a lawyer for Wal-Mart, said the retailer has “claims to rights in the video library” and the film transcripts. Mr. Ney didn’t return calls for comment, and Wal-Mart’s spokeswoman declined to elaborate.