When I say software and intellectual property, chances are you first think -patent protection- but if you’re sourcing out your software development to employees or independent contractors, dealing with copyright ownership on the front end is crucial. And just because something is patentable, doesn’t mean it can’t find protection under copyright law.[1] The literal elements of computer programs – source and object codes – are deemed “literary works” and subject to copyright protection, limited to exclude any functional or utilitarian aspect of the work (note some non-literal aspects of a program, like screen display, may be protectable as an audiovisual work, but that’s outside the scope of this article).

Rare Hit to Google

Take Google’s litigation with Oracle America as an example: Oracle developed a programming interface that allows software developers to write programs that run on several different types of computer hardware without rewriting the code every time it’s applied to a new device. As you can imagine, Google found this pretty useful since they run Android on just about any handset that will take it; and they copied it, verbatim. Oracle sued basing its argument on patent and copyright law. The patent claim was shot down (for reasons outside the scope of this article), but those devious copyright rights came in handy. Oracle claimed copyright protection for anything that was a creative expression separate from the underlying function of the code, and the court ultimately concluded that the declaring code and structure, sequence and organization of the API packages were entitled to copyright protection.[2]

Bad news for Google.

But why are we talking about Oracle AM v. Google, you ask? Well, unlike patent law, copyright rights vest in the creator the moment the copyrightable content is fixed in a tangible medium. Read between the lines. If you’re looking to hire a software developer, and you don’t contractually hammer out the conditions on the front end, you’re setting yourself up for a costly headache.

Is the developer you’re hiring an employee or independent contractor?

If your coders are employees and you want to own all copyrightable content created within the scope of their employment, you can probably get away with a simple “Work made for hire” clause in the employee’s contract. Simple enough. Things get thorny when your scenario involves a coder / independent contractor, though. The U.S. Copyright Act requires that: (1) deliverables be specially ordered or commissioned; (2) the independent contractor must have executed a written contract stating that the deliverables are a work made for hire; and (3) the deliverables must come within one of nine categories: a contribution to a collective work; a part of a motion picture or other audiovisual work; a translation; a supplementary work; a compilation; an instructional text; or an atlas.

You’re thinking, wait, software and other tech deliverables don’t fit under any of the nine categories listed; you’re exactly correct. And as we discussed earlier, if your independent contractor is writing and customizing your software, they own the copyright. If you want to flip this scenario around, you must also include words of assignment in your contract.

 Here’s an example of some of the type of language you could include:

Assignor hereby assigns to Assignee, its legal representatives, successors, and assigns, the publishing rights in the above manuscript, including the right to procure the copyright thereon and the right to secure all renewals, reissues, and extensions of any such copyright in the United States and in any foreign country.

Note that in some states like California, the inclusion of a work made for hire clause in an independent contractor contract is penalized. This means that you as the hirer will be forced to cover the independent contractor under your worker’s compensation insurance – not exactly the plan when hiring independent contractors. Also note that if your independent contractor sues you claiming that they are actually an employee, the inclusion of a work made for hire clause, under some circumstances, can be used as evidence that a contractor is, in fact, an employee.

This article is by no means suggesting a do-it-yourself approach to protecting software IP. As with everything in the fascinating world of law, the analysis depends on the specific facts and jurisdiction. Talking with a lawyer about your situation is generally the best bet.

[1] See Mazer v. Stein, 347 U.S. 201, 217 (1954)

[2] Oracle Am., Inc. v. Google Inc.750 F.3d 1339, 1347110 U.S.P.Q.2d 1985, 19882014 BL 129893, 2 (Fed. Cir. 2014)

—————————————————————

Michael is the senior corporate and intellectual property counsel in RVL®’s Chattanooga office. His practice areas include copyright and trademark protection, licensing and litigation, complex business transactions, corporate compliance, e-commerce, government contracts, fundraising, securities, and alternative corporate structures including gig economy and benefit companies.

The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

About Kevin Christopher

Kevin Christopher

Kevin is founder and principal of Rockridge®. Kevin’s practice areas include corporate, patent and trademark law. He is an entrepreneur, NIH RADx faculty member and Small Business Innovation Research (SBIR) reviewer. He mentors impactful and innovative founders through First Flight Venture Center, Oak Ridge National Lab Innovation Crossroads, and Tsai Center for Innovative Thinking at Yale. Kevin has been recognized as a SuperLawyer by Thomson Reuters and Top Business Leader by Conscious Company Magazine. Read more about Kevin, connect with him, and Calendly him.

RVL recommended reading by Kevin:

Plainspeak IP: IP Fundamentalist of Fundamentals

Plainspeak IP: Social Media Influencers

Grading Georgia’s Public Benefit Corporation Law

Improving Your Trademark EQ: How to Choose a RAD Trademark

What is a Patent? Why do I Need One? How can I Get One? What’s it Gonna Cost Me?

Common Mistakes Made by Entrepreneurs

SECsy for the Sharks: Tips on Creating and Delivering Startup Pitches that Meet Federal Regulatory Requirements

About RVL®

Rockridge Venture Law® was launched in 2017 to become the preeminent intellectual property and technology firm across the Appalachian Innovation Corridor. We now have offices in Chattanooga, Durham, and Nashville, and represent clients and interests globally. Our services include all aspects of intellectual property, litigation, M&A, privacy, technology transactions, and ventures.

In 2018 and 2019, we were recognized as B Corp Best for the World for our commitment to triple bottom line business practices. Rockridge® is also certified by 1% for the Planet for its nonprofit partnerships advancing stewardship and sustainability. RVL’s nonprofit partners in 2020 include Green|Spaces, Living Lands and Waters, Mustard Seed Ranch, and the NC State Lulu Games Social and Environmental Impact Competition. We value transparency and proudly publish our yearly impact reports.

Our pioneering environmental and social impact programs attract top-notch legal talent and assure our clients of missional alignment with their corporate values. Rockridge uniquely addresses two modern profit drivers: innovation (uptake and development), and corporate social responsibility. We’re Building Today’s Company for Tomorrow’s Economy® by leading clients through the dizzying array of information controls, by helping them to develop and monetize proprietary assets, and by enabling their impactful products, programs, and principles.

Learn about global impact and innovation leaders at Rockridge I-Suite®.

See case studies on how we’ve helped transformative companies at Rockridge Case Studies.

Kevin Christopher

Author Kevin Christopher

More posts by Kevin Christopher

CHATTANOOGA
735 Broad Street, STE 1001
Chattanooga, TN 37402
(423) 800-8855

COOKEVILLE
116 Locust Ave, STE E
Cookeville, TN 38501
(931) 650-4055

DURHAM
300 Morris St. Floor 7
Durham, NC 27701
(919) 808-1777

MEMPHIS
(901) 701-8500

NASHVILLE 
41 Peabody St.
Nashville, TN 37210
(629) 401-4200

 

RVL® is a business, intellectual property, and technology firm, building today’s companies for tomorrow’s economy.