Hi-Tech Video Productions, Inc. v. Capital Cities/abc, Inc.
1995 WL 405867, 58 F.3d 1093 (1995)
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Rule of Law:
For a work to be considered a 'work made for hire' under 17 U.S.C. § 101(1), the creators must be employees, not independent contractors, as determined by the multi-factor common law of agency test. Factors such as the provision of benefits, tax treatment, and the level of skill required can outweigh the hiring party's right to control the creative process.
Facts:
- Hi-Tech Video Productions, Inc. ('Hi-Tech'), owned by Stan Akey, decided to independently produce a travel video about Mackinac Island.
- Akey hired freelance subcontractors to assist: Ted Cline for aerial videography, Steve Cook for scriptwriting, and Michael Mueller for principal videography.
- Cline supplied his own specially equipped airplane for the aerial shots, and Mueller used his own computer to create the video's graphics.
- Hi-Tech did not provide any of the freelancers with employment benefits or withhold payroll taxes from their compensation.
- Akey testified that he considered the assistants to be 'freelance people' and 'independent contractors.'
- In May 1990, Hi-Tech released the completed work, 'Mackinac Island: The Mackinac Video.'
- Producers for ABC's 'Good Morning America' (GMA) needed footage for a segment on Mackinac Island.
- A GMA associate producer obtained a copy of Hi-Tech's video from the local Chamber of Commerce and incorporated scenes from it into a background piece that aired on national television on June 8, 1990.
Procedural Posture:
- Hi-Tech Video Productions, Inc. sued Capital Cities/ABC, Inc. in the U.S. District Court for the Western District of Michigan for copyright infringement.
- Following a bench trial, the district court denied ABC’s motion to dismiss, finding Hi-Tech's copyright to be valid.
- The district court then entered judgment in favor of Hi-Tech, rejecting ABC's fair use defense and finding the infringement to be willful.
- The district court awarded Hi-Tech treble damages, attorney’s fees, and costs.
- The district court denied ABC's subsequent motion for a new trial or reconsideration of the judgment.
- ABC, as appellant, appealed the district court's judgment to the U.S. Court of Appeals for the Sixth Circuit. Hi-Tech is the appellee.
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Issue:
Does a video produced with the help of freelance subcontractors—who supplied some of their own equipment, were not provided benefits, and did not have taxes withheld—qualify as a 'work made for hire' under 17 U.S.C. § 101(1), thus granting the hiring company a valid copyright?
Opinions:
Majority - Batchelder, J.
No. The video does not qualify as a 'work made for hire' because the freelance creators were independent contractors, not employees, rendering the copyright registered by Hi-Tech invalid. Applying the common law of agency test from Community for Creative Non-Violence v. Reid, the court determined that several factors strongly indicate independent contractor status. Although Hi-Tech's owner, Stan Akey, exerted creative control over the project, this single factor is not dispositive. The court gave significant weight to other factors: the assistants were highly skilled professionals; they supplied some of their own essential equipment; Hi-Tech did not provide employee benefits or withhold payroll taxes; and Akey himself referred to them as independent contractors. These factors, particularly the economic ones, outweighed Akey's control and compelled the conclusion that the assistants were not employees under the Copyright Act. Because the creators were independent contractors and no written work-for-hire agreement existed under § 101(2), Hi-Tech could not validly register the copyright as a 'work made for hire'.
Dissenting - Jones, J.
Yes. The video should qualify as a 'work made for hire,' and Hi-Tech's copyright should be considered valid. The dissent argues that the majority misweighed the Reid factors. It contends that Stan Akey, as an employee of Hi-Tech, performed the vast majority of the creative work himself through editing, sequencing, and packaging the final product. The dissent emphasizes that Akey maintained full control over the final product, supplied the cameras, controlled the hiring, and that video production was Hi-Tech's regular business. These factors, in the dissent's view, are sufficient to establish that the video was a work prepared by an employee within the scope of employment, making the copyright valid under § 101(1).
Analysis:
This decision significantly clarifies the application of the 'work made for hire' doctrine after CCNV v. Reid, particularly in creative industries that rely on freelancers. The court's analysis establishes that objective economic factors, such as tax treatment and the provision of benefits, are powerful indicators of employment status that can override the hiring party's direct creative control. This precedent serves as a critical warning to businesses that they cannot assume copyright ownership of works created by independent contractors without a written agreement explicitly designating the work as one 'made for hire'. The ruling solidifies the principle that the Reid factors must be weighed for their significance in each case, not merely tallied, thereby protecting the default rule that copyright ownership vests initially in the author.
