When working with independent contractors, particularly when outsourcing software development, it's important to establish who owns what. Otherwise, you could end up in a situation where you don't own the code you paid for.
Under the Copyright Act of 1976, the author of a work is the owner of the copyright unless the work is a work for hire. A work for hire is defined under 17 U.S.C. § 101 as (1) a work prepared by an employee within the scope of his or her employment, or (2) a work that is specially ordered or commissioned and falls into one of nine specifically-defined categories of works. These categories are as follows: (i) Contribution to a collective work, (ii) Part of a motion picture or other audiovisual work, (iii) Translation, (iv) Supplementary work, (v) Compilation, (vi) Instructional text, (vii) Test, (viii) Answer material for a test, and (ix) Atlas. Most importantly, the parties involved in the work-for-hire transaction must also expressly agree in a written instrument signed by both of them that the work shall be considered a work made for hire.
If you work with an independent contractor and not an employee, definition (1) above does not apply.
If a work was not created as a result of a situation described in Definition (1) or (2), then it is not considered a work made for hire, and the person who does the hiring does not own the work. Instead, the work is owned by the person who created it. The only way that a hiring party can own the work in such a case is if the copyright in the work is transferred to that party by the owner. Ideally, it is best to consult an attorney prior to retaining the independent contractor to ensure that, if needed, any proposed contract would transfer ownership of the copyright to the commissioning party.
If you've already gone through the process without fulfilling (1) or (2) above, there's still hope. If you contributed your labors to the code, a valid argument might be made that this is a joint work. A joint work is defined as one that is prepared by two or more authors with the intention by such authors that their contributions be merged into inseparable or interdependent parts of a unitary whole. 17 U.S.C. § 101. In a joint work, each contributor automatically acquires an undivided ownership in the entire work.
However, a person who merely describes to an author what the commissioned work should do or look like is not a joint author for purposes of the Copyright Act. To be an author one must supply more than mere direction or ideas: one must "translate an idea into a fixed, tangible expression entitled to copyright protection." S.O.S., Inc. v. Payday, Inc., 886 F.2d1081, 1087, 12 U.S.P.Q.2d (BNA) 1241 (9th Cir. 1989). See also Ashton-Tate Corp. v. Ross, 916 F.2d 516, 16 U.S.P.Q.2d (BNA) 1541 (9th Cir. 1990), where the court held that a person who merely gives a programmer a list of computer interface commands that he wants included in the program being written is not a joint owner in the copyright of the work. To become a joint owner of a copyright, one's contribution to the work must itself be copyrightable.
As they say, an ounce of prevention is worth a pound of cure. In protecting your intellectual property, there are a number of important questions like the above to ask yourself. If you know the answers, you will be better prepared in case there's a conflict between you and the people you work with.
Allen M. Lee Mr. Lee’s practice focuses on business, corporate and intellectual property matters, including the creation, protection and exploitation of intellectual property assets. He counsels clients on business formation, general corporate matters, trademark, copyright, trade secret, patent, licensing, internet and domain name issues, among other things. For more information contact: Allen M. Lee, a Professional Law Corporation, Tel: (650) 254-0758, Fax: (650) 967-1851, Email: firstname.lastname@example.org, Internet: www.allenmlee.com.