Work for Hire Has Various Interpretations

There is one exception to the general rule of copyright vesting in an author’s work. It’s called “work for hire.”

In a nutshell the concept of work for hire is meant to let a company train, share ideas and educate the people they employ without the underlying fear that they are creating their own future competition. Generally speaking, this is an exception to the general rule of copyright where it vests in the author of a work.

Let’s take a closer look at this doctrine. A company employer is assumed to own copyright on any work created by their workers during the scope of their job. Along with this assumption is the fact that businesses will usually also lay claim to ownership of work produced by independent contractors (if they commissioned the work); if both parties agree in writing the work was work for hire, and that the work itself fits in one of nine categories enumerated in federal law.

As you may expect, the language in the statute leaves the door fairly wide open for vigorous arguments. Let’s look at an example. What if you had a tech support person working for you during the day that went home at night and created software applications? Is that person now working outside the scope of their job at your company? What if the person used skills or ideas learned at your workplace? While you might have thought to put scenarios like this in a work for hire document, the vital question is whether or not “you” will own the work.

There is no right or wrong answer to those questions because an answer is dependent on the facts of each case individually. This is why it is critically important to speak to a Los Angeles business litigation attorney with expertise in this area to outline what you would need to protect your company.

Now, here comes the fly in the ointment – startup tech companies who need their software developed for them and they hire out work as they need it done and when they can afford it. The fly in the ointment is that computer code isn’t really in any one of the nine federal work for hire categories, which puts a crimp in what the company is supposed to do. Put another way, this means the company almost has to hope the programmer’s ethics are superior, and that they won’t use what they’re working on to start their own firm.

The good news is that a recent court decision, JustMed, Inc. v. Byce offered this area of the business world a bit of elasticity when dealing with work for hire issues. The court held that a software developer was an employee and that meant any code developed belonged to the company that hired the developer.

This is an interesting case for another reason as well. The court came to this verdict by almost flying in the face of considerations that would usually lead courts to classify a relationship as being that of an independent contractor. Those factors included: the parties never having a written employment agreement; the business didn’t withhold taxes, provide benefits or a W-2; the company didn’t offer much in the way of direction for the job; the contractor used their own equipment and worked remotely.

The bottom line here is that this area may yet be open to further interpretations as new cases develop for consideration. In the meantime, each case is based on and dealt with on its own merits virtually guaranteeing different results every time. When in doubt about the work for hire doctrine, talk to a Los Angeles business litigation attorney. It could save you some grief later.

To learn more about David Alden Erikson, Attorney at Law, visit Mr. Erikson specializes in Los Angeles fashion law, internet law, business litigation, trademark and copyright law.

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