>A highly recommended practice is to institute a clause which covers a variety of scenarios of assignment of the copyright for all work produced.
This is what I've done for years with my Service Agreement. IP transfer officially occurs on full payment, and rights are assigned to Client if Product would not be considered a work made for hire under applicable law. Though if I'm not paid, I send a written warning after N past due. If still don't get paid N days past said notice, I reserve the right to equitable relief, send a cease to desist, and if I still don't get paid I can go to court and get an injunction to stop Client from using it. There is some language that clearly provides a grace period to the Client to use it while awaiting invoices, etc.
IP transfer is the most leverage you have as a freelance software consultant. It's the one thing you should have clearly defined in a Services Agreement, and you shouldn't waffle on.
There are at least four US District court decisions that stand for the proposition that software qualifies as a work for hire as either a "contribution to a collective work" or a "compilation": iXL Inc. v. Adoutlet (N.D. Ill. March 29, 2001); Logicom Inclusive, Inc. v. W.P. Stewart & Co. (S.D.N.Y. August 9, 2004); Siniouguine v. Mediachase Ltd. (C.D. Cal. June 11, 2012); and Stanacard, LLC v. Rubard, LLC (S.D.N.Y. February 3, 2016). So far no appellate court has ruled on the issue AFAIK.
My impression is that Cooley tends to be more company-favorable. Those docs are to help a startup get to the point where they can afford to hire Cooley.
I'd be curious to see any standard service agreements that people are allowed to share. Those I have seen are pretty weak - no mention of change request procedures for cases where customers could try to 'annex' IP, for instance.
My old law partner liked to harp on this point as well, and it is a valid one. However, as a matter of practice most well-drafted work-for-hire agreements also contain a backup assignment clause something like "to the extent the work is not a work-for-hire, I hereby assign the copyright". "Work-for-hire" is one of the many misnomers you find in commercial contracts, along with "intellectual property".
"... If you hire a photographer to take pictures for your wedding, you own the copies of the pictures that you get, but the photographer still owns the copyright and has the legal monopoly on making more copies of those pictures. Surprise! Same applies to code."
Ok, wait. I am somewhat confused by this article. It is from my (non-lawyer) understanding that intellectual property ownership generally default to the creator. This happens even in "independent contractor" type of relationships, from my understanding. In the case of an employee/employer relationship, on the other hand, IP generally lies on the employer.
So if it's a work-for-hire relationship, IP automatically goes to the potential employer?
That is correct. When I was a photojournalist, I avoided work for hire when possible because it resulted in all of my outakes belonging to the publication. I did do work for hire when I did inconsequential stuff like specialized industrial shoots, but all my news stuff was explicitly not work for hire. The result was I retained rights for my outtakes (which at the end of the 1990s resulted in significant stock income from NBA, the 1996 presidential campaign and other big value news and celebrity stuff.) I actually paid for most of my university with just stock residuals.
My general agreement with Reuters was I got paid a day rate plus expenses and they had the rights to the specific images I delivered. (For a typical NBA game, I might ship at most two images for the night.) Just for clarity, since Reuters is a fast-moving wire service, they don't want fifty images, it was left to the photographer to ship only a 'best' image so as not to clog the picture desk in DC with a massive stream of noise (imagine 20 NBA games in one night with 100 images each -- it makes editing on deadline a massive task, so the photographers were expected to only deliver what was actually needed.)
Things might have changed a bit; my last Reuters assignment was in 2002.
So, at least in photography, work for hire can be very expensive due to effectively having zero IP at the end of the job.
Though I'm not a lawyer, I have direct experience with this having successfully sued a client over IP related issues.
Under California law all IP produced by an employee during their employment, that is within the domain of the employer's work product and regardless of where that work was produced, is by default owned by the employer. All IP produced by a independent contractor is owned by the independent contractor, you pay for their time not for their work product.
'Work for hire' clauses are used to simply and effectively move an independent contractor into the same category as employee with respects to the IP they produce. It does not do the same with respect to the independent contractor's compensation, or rights as employees.
Generally the 'work for hire' clause itself is entirely inflexible, it is other areas of the agreement that must be addressed to protect payment. Hollywood, for example, is run almost entirely under work for hire agreements and could not function without it.
Different rights behave differently. Work-for-hire doctrine pertains to copyright only. An employee who produces "work-for-hire" never owns the copyrights to his creative work. Whereas with patentable inventions, all inventors must be named on any application for an invention, and any inventor who has not assigned her rights in writing will generally retain them, even if she was an employee of the applicant.
Has anyone seen any clauses within an independent contractor agreement, which would allow the retention of certain pieces of the finished work? For instance, I write a class/component/plugin/etc. that I want to use in several projects to increase productivity. Is there a standard way to carve out and retain those pieces of code?
I don't know if there is a standard way to do it, bit that's the arrangement we have with almost all our clients. There are clauses about basically not taking IP, just reusable code for our own purposes. Clients with existing codebases are harder to sell but new projects almost never mind. You can tell the client this significantly benefits them because then they might also get "free" code from our other clients. It's like a microcosm of open source.
While it may not fall under the precise definitions, I like to think that the source code I produce is both a translation (from an abstract concept language into a machine-executable/-readable language) AND an instructional text (for the machine to parse and execute).
From the perspective of a machine, that makes a surprising amount of sense.
DRY (Don't Repeat Yourself) is one of the prime commandments of software development.
The problem I see with transferring IP/copyright on a 'work for hire' basis, is that certainly in my case
a substantial portion of the codebase is often code that is being reused for good reason.
Losing control of that code now effectively prevents the same code from being reused this elsewhere without getting into further messy contractual details.
Personally I refuse to do work for hire - instead the client gets unrestricted right to use code as desired but does not own copyright.
Sure, but even then if contributed code is part of a collective work, the copyright act still requires a work for hire agreement.
Section 101 says:
A “work made for hire” is—
(1) a work prepared by an employee within the scope of his or her employment; or
(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.
Yeah, that is indeed the legal definition in the US of a work-for-hire.
As is pointed out though, for non-employees (contractors) there's an enumerated list of categories that that can be applied to. Writing software isn't in there. Although software and a web site designs might be considered an audiovisual work in some cases. Games and multimedia software are clearly audiovisual works. Accounting software, maybe not. Backend scripts, probably not.
The second clause of the definition should probably be updated by Congress to reflect modern realities. However, as it has not been updated, an explicit copyright transfer is needed, or some form of licensing agreement. A lot of specialists for hire will insist on a license instead of an outright copyright transfers because they sure are not going to give away their core work permanently to one party, short of a buy out. With either a copyright transfer or licensing contract it doesn't need to be a work for hire, that issue is irrelevant, the contract is written to cover what you actually need.
It's literally in the same sentence you're quoting:
> Per 17 USC 101, the deliverables must fall within one of nine limited categories of works.
Though I'll grant you that 17 USC 101 might not be blatantly obvious, a quick Google search will reveal https://www.law.cornell.edu/uscode/text/17/101 as a source for further information.
Your point is valid. Mea culpa. What isn't obvious to me is that the produced work is only protected by copyright, not trade secret property. But my
wonder is immaterial to the practical issue as most code is copyrighted; and any arguments I would make about trade secrets or patents would be easily refutable without a long debate. Apologies and mea culpa.
This is what I've done for years with my Service Agreement. IP transfer officially occurs on full payment, and rights are assigned to Client if Product would not be considered a work made for hire under applicable law. Though if I'm not paid, I send a written warning after N past due. If still don't get paid N days past said notice, I reserve the right to equitable relief, send a cease to desist, and if I still don't get paid I can go to court and get an injunction to stop Client from using it. There is some language that clearly provides a grace period to the Client to use it while awaiting invoices, etc.
IP transfer is the most leverage you have as a freelance software consultant. It's the one thing you should have clearly defined in a Services Agreement, and you shouldn't waffle on.