Legal Question in Technology Law in Pennsylvania

Copyright Rights - Licensing

Fact or Fiction: If a hirer pays an independent contractor to write a program, but fails to obtain ownership, the hirer automatically has a nonexclusive license to use the software as intended.

Assuming there is no joint authorship, what rights are included in this automatic license? Can the hirer license the software to others? Can the author insist on licensing fees if the hirer licenses it to others?

What if the developer knew that the software was being developed as a product in the beginning, but never signed over ownership simply because it never came up?

What happens if the hirer does license it to others, claims ownership, trademarks a name for it, and also claims that it contains their valuable trade secrets?

What remedies are there and what are the chances of success?

Asked on 4/14/04, 9:36 am

1 Answer from Attorneys

Edward Hoffman Law Offices of Edward A. Hoffman

Re: Copyright Rights - Licensing

Your question is a bit vague about the facts, but I'll do the best I can to answer it. Ordinarily a person or company who hires someone else to create any kind of intellectual property will own the rights to it, because it will be what the law calls a "work for hire".

If I write a computer program for you, you own the copyright *unless* we have agreed otherwise. This might be what you mean when you refer to "failing to obtain ownership."

If you have such an agreement with the programmer and it does not specifically says what rights you have, then you have the nonexclusive right to the one copy he wrote, or to as many copies as he reasonably should have expected you to need for your own purposes (e.g., if I write a teller program for a bank, I implicitly agree to let the bank use as many copies as it has tellers). The programmer would still be able to market the program to other customers.

If the programmer learned your trade secrets then you should have drawn up an agreement beforehand obligating him not to reveal the information. Depending upon the dpecifics, you may be able to prevent him from using that information; without more details I don't know what to say about your particular case.

If ownership "never came up" as you say, then the hiring party owns the rights and the programmer is out of luck. If they then market it and the programmer sues he should lose -- unless, of course, he can show that there was an agreement giving him rights in the finished product. Where there is no such agreement, the hiring party can obtain an injunction against him selling the software and can recover damages for any earnings he obtained from it and/or any business he lured away from the company that hired him. Depending upon the specific facts, he may also have to pay punitive damages.

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Answered on 4/14/04, 5:38 pm

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