Who Really Owns My Company’s Software, or How Does the Work for Hire Exception to the Copyright Act of 1976 Effect Computer Software?
The Copyright Act of 1976 gives the author of a copyrightable work protection through Federal law. Generally, this means that the creator of the work enjoys intellectual property rights, including legal protection from infringement – meaning, protection against having someone else copy the work. However, there is a “work for hire” exception. This doctrine applies either (a) when employees create works within the scope of their employment, or (b) where someone (we’ll call this person the “employer” for the purpose of this post) specially commissions a certain type of work from an independent contractor by written agreement. In either circumstance, the employer, not the actual creator, will end up owning the copyright.
An example of (a) is a software programmer, a salaried employee, who writes code for her employer. The code would be owned by the employer.
What would initially appear to be an example of (b) is a software programmer, an independent contractor, who agrees, in writing, to write code for the “employer.” Who owns the code?
9 Enumerated Categories
The issue here is that computer programmers and software creators, acting as independent contractors, often do not fall under the work for hire exception. Within the Copyright Act, there are only nine categories under which the work for hire provision applies to outside contractors:
2.) contributions to motion pictures or other audiovisual works;
3.) collective work contributions (for example, a magazine article);
6.) instructional texts;
8.) answer materials for a test; and
9.) supplemental works, such as a preface to a book.
Given that computer programs and source code do not fall in any of these categories*, a contract between a programmer and a business that includes the words “work for hire” is not sufficient to ensure that the business ends up owning the copyright. The generally accepted solution to this issue is to include an assignment clause. These clauses generally state that the work is to be considered a work for hire, but if that fails, the contractor agrees to assign, and does assign, all rights to the work to the employer. This belts and suspenders approach is helpful to ensure that both parties know who owns what once the deliverables have been completed.
The Bottom Line
Ambiguity is deadly in business contracts, but sometimes, as in the software as a work for hire situation, even apparently clear language (“Attention world: both parties agree that this code is a work for hire!”) isn’t enough to give a contract the legal effect both parties intended it to have. Do not assume that just because the language in your contract is clear to you and to the party you’re contracting with, it will hold up in court.
* Unless they do – for example, computer code which is part of a motion picture or audiovisual work, or code which is part of a collective work.