With Halloween around the corner, it’s scary movie season. Every year, various publications post what they claim is the definitive list of All-Time Scariest Movies. Go ahead, google it.

But in 2021, the Science of Scare Project took a more scientific approach. The Project measured heart rate elevation in 250 volunteers while watching 40 scary movies, and the scariest – measured by increased beats per minute – was a low budget 56-minute thriller you might not expect. The full rankings, with beats per minute spike chart, can be found here.

The movie industry got a different scare last month. Usually, we’re looking for ways to preserve independent contractor status. But in this case, a script writer’s independent contractor status may allow him to take back the copyright to the script, since 35 years have passed since its publication.

In a case called Horror Inc. v. Miller (yes, really), the Second Circuit Court of Appeals ruled that Victor Miller, who wrote the script for Friday the 13th, could legally reclaim copyright on the original screen play. After 40 years, he can take it back!

This surprising outcome is no surprise to those who know the intricacies of the U.S. Copyright Act. The Act says that authors who executed a license or granted a copyright transfer after January 1, 1978, can terminate the license or grant 35 years after the original transaction. The author has five years to provide notice of termination, and Miller provided that notice in 2016, 36 years after the 1980 film was released.

Horror, Inc., which owns the rights to Friday the 13th, argued that the script was a “work made for hire” and that Miller was acting as an employee under federal labor law when he wrote the script. Miller was a member of the Writer’s Guild of America, and the film’s rights holder had registered the screenplay as a work made for hire.

But the Second Circuit Court of Appeals ruled that the test for “employee” under federal labor law is different than the test under U.S. Copyright law. Federal labor law tries define employment broadly, in a way to protect workers and their right to organize. In contrast, U.S. Copyright law applies a narrower interpretation, designed to protect authors. Even if Miller was an employee under labor law, that didn’t make him an employee under copyright law.

The Court looked at five factors for determining whether the screenplay was a “work made for hire,” and the Court ruled that the test was not met. Miller was not an employee under the U.S. Copyright Act, even if he was an employee under federal labor law.

It is here that I strongly disagree with the Court’s analysis. The test for employment status under federal labor law is fundamentally the same as the test under the Copyright Act. Both tests seek to apply the common law of agency, and both are Right to Control Tests. The Court’s attempt to distinguish between the tests falls flat, in my mind, and it appears to me as if the Court made up its mind first and then tried to fit the desired result into a legal framework that would justify the outcome. If Miller was an employee using the common law agency (Right to Control) test that applies to federal labor law, he should have been an employee under the common law agency test that applies to copyright law. (Fun fact: Miller signed a document called “Employment Agreement,” but the Court was not swayed.)

Since Miller wrote the screenplay as an independent contractor under the Copyright Act, the Act grants him the right to cancel the transfer after 35 years, and he properly served notice of his intent to do so. Horror, Inc. is going to lose the copyright to the film.

Copyright termination cases are starting to pop up more frequently, posing a real threat to rights holders in the film and comic book industries.

When engaging a writer, businesses need to weigh the benefits of retaining an independent contractor with the risks. For commercials or social media posts with short-term value, retention as an independent contractor is likely the best path.

But with movies or other assets that are likely to have value for 35 years or more, retention as an independent contractor leaves open the risk that the writer can reclaim the copyright after 35 years. Buyer beware.

The scariest horror movies have plot twists and unexpected scares. For many rights holders, the idea that a script writer could reclaim copyright after 35 years is the kind of scare they could do without. Heart rates among movie rights holders are increasing with this decision.

Content creators need to know what they’re getting into and need to understand the long-term risks.

© 2021 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.