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How does "work-for-hire" work? What makes it different from purchasing copyrights?

While I’ve been using Fiverr for more than a year now (and have been doing some freelance illustration work for quite some time now), I’m still a bit confused about “work-for-hire”. I’ve searched it, and learnt the definition, though is it any different from purchasing a work’s copyright?

In short, would it cost more than the regular price of your work, or perhaps nearly the same price as a work with purchased copyright? Or would it just cost the same as the regular price of your work, basically obtaining copyright without paying extra charges?

A buyer messaged me months ago that he would like to have the copyright to the image(s) he’d be ordering. After I had told him that he would need to purchase the copyright, he mentioned that it was intended as a work-for-hire. I didn’t how it works before (and up to now I still don’t), so I decided to decline the offer to avoid some issues.

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This is a very complex issue.

I am currently in discussions with a past client and lawyers are involved.

It is true that by operating on Fiverr we are bound by Fiverr’s ToS and Fiverr clearly states all projects here are under the “work-for-hire” act of the copyright law.

At the same time, copyright is offered in bundles.

There are

  1. rights to display work
  2. rights to reproduce work
  3. rights to make adaptations (derivative works).

Not sure where we stand on those, as I am now in discussion with a past client who claims they now own the source files I created.

(they decided they shouldn’t have to hire me for future updates)

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It really is complex as some search results I’ve seen even stated that some lawyers are confused about work-for-hire.

That sounds like a lot of hassle though. I read the ToS again, and what you said is true, though Fiverr also states that the buyers are granted all the rights, unless clearly stated otherwise on the Seller’s Gig page/description. Meaning, not all delivered works here in Fiverr are necessarily under work-for-hire.

In your case, if your Gig description clearly states that buyers would need to purchase the complete ownership to the source files (or state that the source files you created remains in your ownership) for example, then your client has no say about it at all. Your client can’t claim ownership to the source files you created, since from the beginning the client should have read the Gig description and know what you offer.

That’s the thing:

Under work for hire, it is true. The client has full right to the delivered work.

Delivered work.

I advertise delivering an mp4 file. Not the source file.

It is open to interpretation if a case were to go to court.

So I think I need to add an explicit disclaimer on all of my gigs.

I see. It’s kind of weird that the client ask for the source file, even to the point of claiming the ownership to it, when in fact you’re not advertising nor offering the source files.

But yes, it’s highly encouraged that you add a disclaimer on all of your gigs. Some sneaky buyers can take advantage of loopholes, and sadly Fiverr is in favor of buyers most of the time, whether they’re right or wrong. I hope everything goes smoothly, otherwise it will be a loss.

This is a delicate situation.

The client messaged me asking for the source files.

When I quoted them on what it costs to get them, and why I need to charge extra, all they did was send me a link to Fiverr’s ToS, with a message that encouraged me to read the specific “work-under-hire” paragraph. So this tells me two things:

-they don’t want to keep paying me as they feel there’s no value added
-they have either done that before or have iron clad contracts for all freelancer hires

They definitely know what work-for-hire means.

So yeah, buyers will always try to get what they want, and will interpret ToS as they see fit.

I’m waiting to hear from their legal team, which is going to be a completely different interpretation I am sure.

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Okay, this is very interesting. I think the real question is who owns the completed job. Fiverr, the buyer or the seller.

So my interpretation of TOS was: if you added in your description or as an extra to your gig “copyrights” and if person didn’t buy copyrights when placing an order then you own the rights (for the part in tos that says “if stated otherwise on sellers gig)

If it wasn’t there and added only upon discussion after work was delivered then the work was delivered under “work for hire term

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That’s not up to debate: by delivering you are immediately and automatically transferring all ownership to the buyer.

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Well that’s what baffles me:

Fiverr is forcing all sellers to abide by the work for hire act and at the same time it allows us to distinguish between transferable rights by encouraging us (certain categories anyway) to add gig extras for commercial rights, broadcast rights etc.

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That business about getting the legal team involved sounds in my layman’s opinion like it’s an attempt to intimidate you into compliance. I think the TOS are clear on this matter also.

I looked at your first two gigs and didn’t see an option to get commercial or copyright extras. I would assume, if I were buying your gig, that they were included?

In that case, there shouldn’t be any real need for "buying copyright’ then.

If I were you, I’d just avoid working with this buyer. However, to answer the point in question, if you deliver by uploading a file and sending it via the Fiverr delivery system, you are not classed as working for hire.

I offer writing. Where I am based (and in most other tax jurisdictions, I am obliged to pay VAT on any document I physically or electronically deliver to a client. This is because I am creating and delivering something of value.

Conversely, if I offered to work with buyers onsite and typed an article directly onto their website rather than delivering a file, I would not be obliged to pay VAT on that order. This is because I am not delivering a physical item, I am providing a service and essentially “working for hire.”

Throw that at your buyer and see how they like it :wink:. (Don’t really.)

As for how this applies in practice to Fiverr TOS, the last time I looked, Fiverr does say that all work belongs to buyers on delivery. However, TOS also states that some sellers may charge commercial rights extras for some services.

While your buyer may decide to blow smoke through their ears and argue they don’t need to pay for commercial rights, it is likely that they would not pursue this matter in court (given your prices).

If I were you, I would simply avoid working with this buyer, as you don’t really know what they are trying to maneuver you into by acting the way they are. My guess would be that even if they do purchase necessary rights, they may come back later insisting that they now own the rights to the overall illustration style you have used in their project. As such, they may ask you for a refund (because you are obviously still offering similar style drawings to other buyers), or they may even insist that you stop offering your service altogether.

Refuse to work with them, cancel if they do order, and block them. That’s what I would do.

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^^^^ That’s sensible advice. No need to work with problem buyers like this.

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They might think they know what work for hire means. However, this does not mean you have to deliver source files unless you explicitly say you do in your gig.

Whenever I get asked for source files, I simply say no, followed by something like:

"I do not provide source files (nor say I do in my gig), as I have my own video style which is made possible by using several propriety and opensource Linux media applications, As a result, even if I were to deliver source files, you would not be able to make use of these without first investing in several different software applications."

Your buyers don’t know what your creative process is. In this case, they can’t really expect you to deliver source files, unless you explicitly say you do.

Of course, this can’t help your current situation.

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My response was fairly similar and I offered a buyout option at 50% the original value.

That’s the current market rate.

That’s when they promptly directed me to Fiverr’s ToS.

I also explained work for hire means I relinquish all rights to the delivered work and since I was hired to make an mp4, we are done. That’s when they started mentioning their legal team.

(I of course mentioned contacting my lawyer to double check that I am not misinterpreting the law well before that message)

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Wow that’s impressive communications on your part frank. This is interesting. You seem to be totally on top of this.

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Thank you for noticing.

I am always trying to catch every little detail for two reasons:

A) being 100% transparent and forward when communicating with a client is a must, as it helps move things along, promotes trust and leaves no room for misunderstandings. (It’s always best to proactively explain things -me stating why there’s a buyout fee- vs being asked after just dropping a price on the table)

B) I have had a few teaching moments back when I was a level 2 seller that made me appreciate having things on the record more.

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I wish every seller on fiverr understood this.

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Sadly, new sellers just wanna sell and don’t read through the ToS.

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