CALL US: 206.533.3854
CALL US  206.533.3854

Does “Work for Hire” Cover Software Development?

Software work-for-hire?
courts say it’s probably yes;
not definitive

When a person or a company is being hired to create any kind of intellectual property protected by copyright – whether it’s content for a website, a graphic design for an ad, or a computer program – it’s common to see a clause in the contract describing the output as a “work-for-hire.”

This means the customer owns ALL the rights in the output from the moment the work is created.

Any copyrightable work created by employees of a company is considered “work-for-hire.” Not surprisingly, there have been a number of court cases debating the definition of “employee.” It’s not always as simple as the presence or absence of a designation of someone as an “employee.”

In contracts, the language “work-for-hire” is often used in situations where it might not technically apply. Software is one of those areas.

Work output from a contractor doesn’t automatically have “work-for-hire” status simply because the contracting parties say it does. There are very specific requirements for work to count as work-for-hire.

There are three requirements that must all be met for a work output to be considered work for hire: 1) it must be specially ordered or commissioned; 2) the parties must agree contractually that it is a work-for-hire; 3) it must be one of the following nine types of work:

  1. a contribution to a collective work
  2. part of a motion picture or other audiovisual work
  3. a translation
  4. a supplementary work
  5. a compilation
  6. an instructional text
  7. a test
  8. answer material for a test
  9. an atlas

Note that software is NOT listed as one of the nine categories.

A recent court case, Stanacard, LLC v. Rubard, LLC, adds to a growing body of non-precedential court rulings that find software eligible for work-for-hire status.

In the Stanacardcase, the judge reviewed the work the contractor did, and concluded

The system as a whole is properly deemed a compilation of computer programs. Alternatively, the source code for each program can be deemed a contribution to the “collective work” that is Stanacard’s system.

Therefore, the judge concluded that the work qualified as a work-for-hire as it fell into one or more of the nine categories.

Other courts that have looked at software have ruled in a similar fashion. However, the issue has not yet come to an appeals court that would issue a more authoritative and precedential ruling, and the finding of whether a particular piece of software is a work-for-hire could depend on the specific circumstances.

If you’re contracting for software development and want to have the additional protection offered by designating the output as a work-for-hire, we recommend also including an express assignment of rights as a backup

Related Articles

When is a patented product sold “within the United States”?

When is a product
“sold in the United States”?
It’s complicated.

Read More

Do AI content generators violate underlying IP rights?

IP owners sue
AI art generators.
What counts as “fair use”?

Read More

Patent Wars Come to Crypto

Veritaseum
Brings lawsuit against Circle
In patent dispute

Read More

Stay Informed

Sign up to receive Patent Poetry—a monthly roundup of key IP issues in our signature haiku format. Four articles (only 68 syllables); zero hassle.

SECTORS

HIGH
TECHNOLOGY

Artificial Intelligence

Blockchain & Cryptocurrency

Computer Technology & Software

Consumer Electronics

Electrical Devices

MECHANICAL
& PRODUCTS​

Cleantech

Mechanical Devices

Consumer & Retail Products

Hardware & Tools

Toys & Games

LIFE SCIENCES
& CHEMISTRY​

Biotechnology

Chemical Compounds

Digital Health

Healthcare Products

Pharmaceuticals

BRANDING
& CREATIVE​

Books & Publications

Brand Creation

Luxury Products

Photography & Video

Product Design