It is not what you think.
Next to “fair use,” “work for hire” is probably the most misunderstood concept in copyright law. Under 17 U.S.C. 101, a “work made for hire” is:
a) A work prepared by an employee within the scope employment; or
b) A work (if the parties expressly agree in a written instrument signed by them that the work should be considered a work made for hire) specially ordered or commissioned for use as:
a contribution to a collective work,
a part of a motion picture or other audiovisual work,
a supplementary work (forewords, afterwards, editorial notes etc.),
an instructional text for use in systematic instructional activities,
an answer material for a test, or
You can’t put a square peg into a round hole.
As you can see, there are very few things that can even become works made for hire. The most important aspect of the statute is that no matter how much both parties want it, and no matter how perfectly you draft your contract, you simply cannot make something a work for hire unless it falls within one of these categories. Many lawyers, and even many copyright lawyers still do not understand this concept.
Is your website a work for hire?
Not unless your employees developed it. If you look closely at the statute, you will note that “website design” is conspicuously absent from the list of items eligible for the “work made for hire” classification. Therefore, while a company owns software development and website design produced by its employees, it does not own such materials produced by an independent contractor. Even if you and your website developer agree that your website design is a work for hire, it is not.
So what did I pay all that money for?
A license. You paid for a license, the scope of which is defined by the actions and intentions of the parties as evidenced by the surrounding evidence. The good news is that the implied license granted you by the website developer will probably allow you to do everything you want to do on your website. The bad news is that a court might find that the implied license does not extend to other media such as books, presentations, marketing materials, etc. The worst news is that the website developer still owns the copyright and can probably license the exact same material to a competitor for a fraction of what you paid. This often occurs in custom home design.
So what can I do?
The most important thing is to contact a copyright attorney before you enter into a contract with a developer. A copyright attorney will help you obtain a copyright assignment, which will eliminate most of the problems noted above. The key is to negotiate the assignment up front. Since an assignment is what most website developers contemplate anyway, if you negotiate up front, you can often obtain an assignment for no extra cost. If you wait until after the project is completed and the developer paid, the developer has no incentive to negotiate. At this point, if you want an assignment of copyright, you have to pay whatever the developer wants.
Remember, it is very important you not to rely on “work for hire” language in a contract to transfer ownership of any copyrighted material your company outsources to an independent contractor. You must obtain a written assignment of the copyright in the commissioned work from the independent contractor. Finally, negotiating such an assignment beforehand is much much cheaper than trying to stuff the genie back in the bottle.