JustMed, Inc. v. Byce is a copyright case decided by the Ninth Circuit Court of Appeals. It involved the question of who owned the copyright to software code created by Michael Byce – Micheal or JustMed, Inc.? The general rule of copyright law is that the creator of a work owns the copyrights to the work. Michael was the creator of the software code in dispute so he claimed he owned the copyrights to the code, which he took with him when he parted ways with JustMed.
There are two exceptions to the general rule of copyright ownership:
- The work is created by an employee who created the work within the scope of the employee’s employment. When this occurs, the employer is the owner of the copyrights for the work. For example if Disney hires Bart Simpson to draw images for a new cartoon movie, Disney owns the copyrights to the works that Bart creates for his job.
- The work is created under a contract called a “work for hire” agreement in which the creator of the work agrees in the document signed by the creator that the other party to the agreement owns all copyrights to the works created pursuant to the work for hire agreement. This is a contract that everybody should use when hiring somebody to take pictures, write copy, design websites, create images or write software.
In JustMed, Michael claimed he was an independent contractor and therefor the owner of the copyrights to the softwared. JustMed argued that Michael created the code as an employee of JustMed within the scope of his employment and therefor it was the owner of the copyrights. The Court found that JustMed was the owner of the copyright even though it did not dot the “i”s and cross the “t”s with respect to properly documenting the employer / employee relationship. The Court said:
“As a small start-up company, JustMed conducted its business more informally than an established enterprise might. This fact can make it more difficult to decide whether a hired party is an employee or an independent contractor, but it should not make the company more susceptible to losing control over software integral to its product.”
Reading between the lines it appears to me that the employer won because when it looked at the big picture it found that the employer was a software development company, Michael’s sole task was writing software code for the company and the employer paid him for the services. The Court found that Michael created code within the scope of his employment and therefor JustMed owned the copyrights to the code Michael created.
The employer could have avoided the lawsuit and the problems with the coder if it had required the coder to sign a work for hire agreement. If you are hiring somebody to create copyrightable work and need a work for hire agreement or an employment agreement that contains copyright language the protects your ownership of the copyrights, call me at 602-906-4953, ext. 1. I prepare these types of agreements.
See the Court’s opinion.
One problem with using a “work for hire agreement” with an independent contractor in the State of California, is that could mean that the worker is your statutory employee under California Labor Code Section 3351.5(c). It is quoted below.
Any person while engaged by contract for the creation of a specially ordered or commissioned work of authorship in which the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire, as defined in Section 101 of Title 17 of the United State Code, and the ordering of commissioning party ownership of all the right comprised in the copyright in the work shall be an employee of the service recipient.