Over the years, I have had many clients ask me who owns the intellectual property rights to the creative works of their employees. This question has arisen in a variety of situations, ranging from design companies, to companies that are asking their employees to assist with company branding.
In JustMed, Inc. v. Byce (9th Cir. April 5 ,2010), the Ninth Circuit recently gave us some guidance on this issue. In issuing its decision, the court first noted that the federal Copyright Act provides that copyright ownership “vests initially in the author or authors of the work.” The court then noted, however, that an exception to this rule exists under the “works made for hire” doctrine, where the “employer or other person for whom the work was prepared is considered the author” and owns the copyright, unless there is a written agreement to the contrary.
The court also explained that a “work made fore hire” is a “work prepared by an employee within the scope of his or her employment. Therefore, works created by employees belong to the employer, but works created by an independent contractor remain with the original author.
In this case, the court ruled that the original author was an employee, and not an independent contractor. Interestingly, there were factors that supported a finding that the author was either an employee or independent contractor, and the deciding factor was that the employer was a “small start-up” company that conducted business more informally. Therefore, it was more difficult to decide whether the individual in question was an employee or independent contractor, and for the purposes of this particular case, it should not make the company more susceptible to losing control over products created within the company. Go figure.