The Virtual Lawyer - A Trap For the Unwary - Work For Hire Agreements

by David Crocker

Published 1997-11-01    Printer-friendly version

Most of us sail blithely through life, blissfully unaware of all of the things that can trip us up. Given fate or the simple law of averages, most of us will stub our toes from time to time but never fall completely flat. God loves the hapless, I suppose. If you are in the software or design business, however, you cannot afford to be hapless, because the law of averages simply will not (and cannot) protect you. Like a disciplined athlete, you must be deliberate in all of your actions. I am therefore continually amazed that designers and developers are completely hapless when it comes to the ownership of the work they create. I refer, of course, to the whole subject of "works for hire." You will recall that copyright protects "original works of authorship." Keep in mind that when we discuss "works for hire" we are zeroing in on a simple yet profound question: "Who is the author?" Now, just what is a "work for hire?"

Yup, It's a Copyright Thing

A work for hire is a work (be it artistic, literary, dramatic, or musical) created by one person for another. A classic example would be a wealthy patron who commissions an artist to create a painting of the patron's wife. Now, it's obvious that the physical work itself (the canvas and paint) would belong to the patron, but that does not mean that the patron owns the right to reproduce or publicly display the work. Whether the wealthy patron owns those copyright essentials is where authorship comes in. Under the Copyright Act, the wealthy patron would be the "author" if, and only if, the commission qualifies as a work for hire.

Employees and Contractors

The Copyright Act defines works for hire in terms of "employees" and everyone else who is not an employee. In the case of an employee, everything that the employee creates for the employer "within the scope of his or her employment" belongs to the employer. In such cases, the employer is, for copyright purposes, the author. For all you software development companies employing legions of worker bees coding all day long, this means that the company will own the copyright to the code. For copyright purposes, you should assume that the word "employee" has its usual meaning, that is, someone who is on the payroll and works eight-to-whenever for the regular paycheck. This is the easy part of the definition.

In the software or design business, however, not everyone is an employee. Sometimes, as in the case of the wealthy patron, individuals are "commissioned" to create a particular work. In the software industry, it is not uncommon for a company to subcontract the actual coding of a particular software package or module to one or more individuals. Now, these individuals are not employees; they keep their own hours, use their own equipment and facilities and are not paid a regular wage. In short, they are "independent contractors" as we have always understood the term.

The Dreaded Pitfall

Most companies that contract out development or design work automatically assume they own the code or design. This is the point where usually careful and deliberate people fall into the abyss. Remember: under the Copyright Act, the contractor/programmer is the "author" unless (1)there is an express written agreement signed by the parties that the work shall be considered a work for hire, and (2) the work falls into one of nine distinct categories. These categories are (1) motion pictures, (2)other audiovisual works, (3)translations, (4)supplementary works, (5)compilations, (6)instructional texts, (7)tests, (8)answer sheets for tests and (9)atlases.

Now, how the Congress of the United States came up with the preceding disjointed list is quite beyond me. What this means to you is that even with an "express written agreement" by the parties concerning the "commissioned" work, unless the work falls into one of these categories, there is no work for hire and the creator of the work is the author and owns the copyright.

So What's a Mother to Do?

If you are a software developer and you subcontract all or some of the company's work to an outsider, always assume that the product to be produced will not qualify as a work for hire. This means that you must get the commissioned developer to assign his or her work to you or your company. Only by an absolute assignment of all rights in a piece of code or a design will you assure that you or your company holds the copyright in the contractor's creation.

Avoiding the Ugly Surprise

Imagine your nausea when you realize that you do not hold the copyright to that piece of code or design that you contracted out. As a deliberate and careful developer, you should know at all times who owns the copyright to any piece of work marketed by your firm. Since software doesn't naturally "fit" into the commissioned work categories, you should always assume that an assignment is in order.

Printer-friendly version

Copyright © 1999-2008 by CoveComm Inc. All Rights Reserved. Reproduction in any form without the express written consent of CoveComm Inc., except as described in the subscription agreement, is prohibited.

Clarion Magazine ISSN 1718-9942