Monday, February 04, 2008

Retroactive work for hire agreements

Run of the mill cases sometimes illustrate common problems. Gladwell Government Services, Inc. v. County of Marin, 2008 WL 268268
(9th Cir. January 28, 2008) presents two: an after the fact work for hire agreement, and a transfer that is (allegedly) vague about whether it transfers copyright or ownership of physical objects. All circuits permit after the fact transfers, so what’s the different? Both involve independent contractors. One – and perhaps the only – explanation is that since copyright vests automatically upon creation if there is no agreement at the time of creation, the author is the author, a status that cannot be altered later. But if the parties agree at the time and just don't sign at the dotted line why should it matter? Of course, if the creator disputes he or she had agreed to work for hire status that's a different fact setting, one where presumably there was no signed agreement. I am referring to cases where there is an after the fact signed work for hire agreement. There are other fact settings too pointing the other way, say one where the commissioning party later, perhaps years later, insists that a work be for hire when the parties had not so agreed at the time, and the commissioned party, under the gun in order to get a new job, agrees under duress. Maybe its best just to have a clear rule: signed at the time of (or before) creation, or no work for hire.

In Gladwell, the work for hire agreement was entered into after the fact. But there was also a belt-and-suspenders transfer. That agreement read: ““[a]ll reports, information, data, work product, findings, and conclusions furnished to or collected, prepared, assembled, and/or made by [Gladwell's agents] under this Agreement (“Work Product”) shall be the property of [Marin].”

The posture of the case is important, a motion to dismiss by defendant, my former home County of Marin, California, to dismiss for failure to state a claim. The district court granted the motion, the Ninth Circuit reversed in yet another unpublished opinion:

The central claim raised on appeal is that Gladwell had authored and obtained copyright protection in certain material (“Pre-Existing Materials”) that pre-dated the Marin contract that resulted in the creation of the retention schedules (“Marin Schedules”). The Copyright Act provides that copyright ownership “vests initially in the author or authors of the work.” 17 U.S.C. § 201(a). However, if the work is made “for hire,” “the employer or other person for whom the work was prepared is considered the author ... and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.” 17 U.S.C. § 201(b). Section 101 of the Copyright Act defines a “work made for hire” as “a work specially ordered or commissioned ... if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire....” 17 U.S.C. § 101(2). The plain language of the statute indicates that a work-for-hire agreement cannot apply to works that are already in existence. Works “specially ordered or commissioned” can only be made after the execution of an express agreement between the parties. See Playboy Enters., Inc. v. Dumas, 53 F.3d 549, 558-59 (2d Cir .1995); Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410, 412-13 (7th Cir.1992) (“The writing must precede the creation of the property” to qualify as a work-for-hire agreement). Accordingly, Marin could not acquire copyright ownership in Gladwell's Pre-Existing Materials through a work-for-hire agreement. Additionally, the agreement did not transfer Gladwell's copyright interest in the Pre-Existing Materials to Marin. The agreement provides that “[a]ll reports, information, data, work product, findings, and conclusions furnished to or collected, prepared, assembled, and/or made by [Gladwell's agents] under this Agreement (“Work Product”) shall be the property of [Marin].” This language by itself cannot operate to effect a copyright transfer as a matter of law. See 17 U.S.C. § 204(a) (requiring that a transfer of copyright ownership must be made in a signed writing); Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 557 (9th Cir.1990). Transfer of a copyright interest must be made expressly. Id. (“The rule is really quite simple: If the copyright holder agrees to transfer ownership to another party, that party must get the copyright holder to sign a piece of paper saying so.”).


Fred von Lohmann said...

Isn't this just the product of poor drafting? Wouldn't this have easily been dealt with by straightforward "assignment" language?

Most belt and suspenders clauses say (1) it's a work for hire; (2) if it's not, you hereby assign the copyright to us; (3) and if that doesn't work, you hereby give us a perpetual paid-up license.

I've always wondered whether #2 works -- a promise to assign, in advance of creation, if work for hire fails.

Anonymous said...

Situation: You create software as a self-employed independent contractor and later become an employee of the company using that software and you continue to update the same software for the company.

The company claims copyright and ownership of the software but without any permission or consent from you.

Does the law uphold the ownership and copyright of the software for you or the company in that case?

Anonymous said...

To anonymous:

You would own the copyright in the original software, and the company would own the updates. However, without the underlying software, the updates are useless. The software with the updates is considered a "derivative work" of the original software and you have the right to make derivative works of your original software.

Anonymous said...

Regarding the above case in the comments....

So, for (a simple) example, if one writes code as an independent contractor that...

1)Accesses a database and returns a list of employees.

2)Orders that list by name.

And then as an employee writes additional code that....

3)Prints the ordered employee list to a printer.

...then one owns the copyright for the code that performs 1 and 2 and the hiring company owns the copyright only to the code that prints the list (3) without 1 and 2?

Also, for the same case, what if, as an employee, one transfers the code written as an independent contractor to a software creation tool that belongs to the employer, does updates to the code on that tool, and then compiles the original code and the updates together into one program using that tool owned by the employer.

In your opinion, does that give the employer any right to the code created orignally by the independent contractor as an independent contractor? Does the employer have full copyright to all the code that was compiled to make that one program?

Are there any previous rulings you know of that address these particulars?