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Simple English definitions for legal terms

instance and expense test

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A quick definition of instance and expense test:

The instance-and-expense test is a way for courts to decide who owns the rights to a product. If someone makes something while working for someone else, the owner of the company usually owns the rights to it. But if someone is hired to make something and uses their own resources, they might own the rights instead. The test looks at whether the company told the person what to make and paid for it, or if the person made it on their own and got paid later. If the company wins the test, they own the product unless there's a different agreement.

A more thorough explanation:

The instance-and-expense test is a legal standard used by courts to determine whether a product was a work made for hire. This means that the ownership rights of the work are determined by who paid for it and who had control over its creation. If a work is deemed made for hire, the hiring party owns the rights associated with the work, including intellectual property ownership.

The instance-and-expense test has two parts:

  • Instance: This refers to the extent to which the hiring party provided the reason for, participated in, or had the authority to supervise the creation of the work. If the hiring party provided the creative direction or had the authority to supervise the work, it is more likely to be deemed a work made for hire. If the creator created the work on their own initiative, it is less likely to be deemed a work made for hire.
  • Expense: This refers to the use of the hiring party's resources to create the work. If the hiring party paid for the work with a lump sum, it is more likely to be deemed a work made for hire. If the creator is compensated through royalties or a profit-sharing system, it is less likely to be deemed a work made for hire.

If the hiring party satisfies the instance and expense test, they will be deemed the owner of the work, unless there is evidence of an agreement to the contrary.

An example of the instance-and-expense test is a company hiring a graphic designer to create a logo. If the company provides the designer with specific instructions on what they want the logo to look like and has the authority to supervise the designer's work, this satisfies the instance prong of the test. If the company pays the designer a lump sum for the work, this satisfies the expense prong of the test. Therefore, the logo would be deemed a work made for hire, and the company would own the rights to the logo.

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MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
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